Solar Investment
In the current world climate it can be hard being an investor. With financial markets in meltdown and the huge boom in property in slowdown, investors are wondering where the best place is to not only secure their money, but also to grow it too.
There is one particular investment that promises much right now; renewable solar energy. In particular the Solar market which captures UV light (known as photovoltaic) as opposed to direct sunlight has seen huge growth in the last 3-5 years. An easy example of this technology is the strip on your calculator, which uses UV light to power up. So just why are investors excited by this sector?
Firstly, solar has never been popular because it has been too expensive to produce compared to the price of oil. Russell Hasan from Altenews.com, in his “research report on Solar investment: the Dawn of Solar Power”, states that the breakeven point with Oil is around the $50 a barrel level, which means in today’s marketplace Solar is now becoming a really viable option. Governments historically have been slow to subsidise, but a number of markets are now starting to grow dramatically.
Feed-in tariff law
Before Solar started becoming more competitive, a number of developed nations took the lead in providing subsidies for the solar industry. The 3 global market leaders are Japan, Germany and the US, with Germany in particular bringing in a law in 2004 which interested investors greatly. The Act states that any excess renewable energy that is produced must be bought back by the utilities at a set rate per Kilowatt. Solar gets a preferential rate of 47-57c/Kilowatt compared with any other source, such as wind, depending on the type of installation. As a result, it means that the owner of the solar energy generating system can create an income stream whilst also helping the environment. Similar laws are in place in other EU countries such as France, Spain, Italy and Greece.
Solar is a growth industry
For information on all asset management contact Nigel Walter chairman of Connaught Asset Management.
