Australians who choose to invest in domestic renewable energy are being warned of its stagnant returns, and instead are advised to look to Europe for profitable investments.
Lagging behind global renewable energy initiatives, Australia is likely to fail to achieve its emissions reduction commitments. According to a study by Bloomberg New Energy Finance, Australia’s “20 percent by 2020” renewable energy target is unlikely to produce substantial returns for investors.
“(The) uncertainty around the carbon issue in Australia means that any investments in local renewable energy are still exposed to various market risks. On the other hand, renewable energy investment in Europe is proving to be a more safe, high-return investment in a long-term fixed asset,” Polaris Energy Strategic Advisor Samuel Wilson said.
According to Eurostat, the statistical office of the European Union, share of renewable in the EU27 energy supply almost doubled between 1999 and 2009 – increasing from 5 percent to 9 percent.
As Europe leads the world in green strategies and adoption, Italy has been attracting attention due to its 17 to 20 percent annual returns on renewable energy investments.
With the Italian government agreeing to bind carbon reduction targets by using a Feed-in Tarrif (FIT) for solar, it guarantees the next 20 years the increase of renewable energy in the country.
“Australians interested in sustainable investment, both from an environmental and market perspective, need to compare the markets to find out where their returns would be most favourable,” says Wilson.
