<a href="http://www.gmagazine.com.au/blogs/leon#">The Business of Green</a>

The Business of Green

Money matters in the green world, by Leon Gettler.

Renewable energy investment trends

solar panels

Credit: (CC) Larry D. Moore

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One investment sector that’s always been primed for growth has been renewables. Regardless of the economic crisis, global warming will increase the amount of money that will pour into this sector.

As US commentator Thomas Friedman recently pointed out.

Mother Nature doesn’t do bailouts.

I am strongly of the belief that energy is going to be the mother of all markets. The latest figures, reported here show that clean tech investment has dropped 48 per cent since last year.

But there are interesting trends behind that headline. First, there are reports that almost $US400 billion ($A578 billion) of roughly $US2.6 trillion ($A3.8 trillion) in economic stimulus allocations announced so far by G20 nations have been earmarked for clean technologies such as renewable energy, improved electrical grids and cleaner cars.

Secondly, venture capitalists are now fine tuning their investments in renewables, turning away from wind energy and instead putting their money into solar energy, biofuels, advanced batteries and electric vehicles.

Why the change? Because they are investing in sectors that are already being backed by governments which will in turn, ensure they get good returns.

With the G20 reaffirming its "commitment to address the threat of irreversible climate change, based on the principle of common but differentiated responsibilities, and to reach agreement at the UN Climate Change conference in Copenhagen in December 2009", we can expect government investment to continue.

Which in turn tells where the venture capitalists will be investing.

That points to where the investment opportunities might lie for those wanting to put their money behind renewable energy. The RiskMetrics group identifies some winners and losers.

According to RiskMetrics, renewables will be the fastest-growing new energy source, particularly when there will be a global market price for fossil fuels’ carbon emissions.

Nuclear might also do ok although it’s hard to see why too many investors would put their money into something with high capital costs and problems of proliferation, waste disposal and local community opposition. And the big loser will be coal.

Do you think the renewables sector is good for investment? What opportunities do you see? And which sector will be the biggest winner?