When it comes to making investments, many people are looking to make an impact on the world they live in. Impact investing is becoming a popular way to do this, and renewable energy investments in the UK are particularly attractive.
What exactly is impact investing? Impact investments are investments that generate a positive social or environmental impact alongside a financial return. The goal is to create a sustainable world where businesses, non-governmental organisations and individuals can work together to solve the world’s most pressing problems. With the UK creating ambitious renewable energy targets, the potential returns on such investments are significant.
The UK has launched an Energy Vision, with the aim of achieving net zero emissions by 2050. The government has set a target to generate 30% of its electricity from renewables by 2020 - a target that was met in 2017. To continue reducing emissions and meeting renewable energy targets, there is growing demand for investments in renewable energy projects.
The UK is an ideal market for impact investing. It has a long history of strong investment returns; stable and regulated legal frameworks; relatively low-cost financing; and a large pool of highly-skilled and experienced financial services professionals. As a result, it has become one of the most attractive markets for renewable energy investments.
The renewable energy sector has enjoyed strong growth in the UK in recent years, and there are many options for investors seeking to make both financial and environmental returns. Solar energy, wind energy, bio-energy and wave energy are all viable investments in the UK.
Solar energy is the most popular form of renewable energy in the UK. Solar panels can be installed on both residential and commercial properties and generate electricity from the sun’s rays. Solar energy has the benefit of being clean, inexpensive and reliable. It is also relatively easy to install and requires minimal maintenance. The UK has the highest capacity of solar PV in Europe, and further growth is projected.
Wind energy, the second largest source of renewable energy production in the UK, is another attractive option for investors. The UK has over 8GW of wind energy capacity, with considerable investment in offshore wind farms. Investors in wind energy can benefit from stable cash flows and long-term contracts with electricity suppliers.
Bio-energy, a renewable energy source derived from biomass, is another growing sector in the UK. Bio-energy is produced by burning biomass such as wood, crop waste and biogas. Bio-energy is seen as a viable option to replace fossil fuels and reduce emissions. It is also cost-effective and efficient, and has the potential to create jobs and drive economic growth.
Wave energy, the most nascent form of renewable energy in the UK, is an emerging investment opportunity. Wave energy devices capture the energy of ocean waves, converting them into electricity. It has the potential to be cost-competitive with other forms of renewable energy, and there are many investors looking to back wave energy projects in the UK.
Impact investing is becoming increasingly popular in the UK and is an attractive option for investors seeking both financial returns and positive environmental outcomes. Renewable energy is at the forefront of this movement, and there are a range of opportunities for investors across the sector. The government’s commitment to reducing emissions is driving further investment in renewable energy, and there are plenty of options for impact investors looking to make a difference.