Alternative Outlook

Wealthy investors should increase their exposure to renewable energy to get uncorrelated inflation-beatings returns, a survey of investment advisers has shown.

The industry poll from Future Capital Partners showed that 67 per cent of advisers believe high-net worth investors should allocate a greater part of their portfolios to renewable energy for the long-term, while 56 per cent said they should do so for the short-term.

Looking at the individual types of renewable energy investment, IFAs were most familiar solar and wind energy, and least familiar with biomass. Solar energy was also rated as most favourable of all renewable investments.

However, Piers Denne, head of sales and marketing for Future Capital Partners, said the renewable energy industry needed to do more to make advisers aware of the benefits of investing in the sector.

He also said investors needed to look beyond solar and wind power to less glamorous options, such as biomass, and not rely solely on tax incentives when investing.

He said: “The solar energy sector is one of the most high profile. However, it has suffered setbacks as a result of the cut to feed-in-tariffs, which highlights the need for the market to look for alternatives in lesser-known renewable energy sectors.”

Ray Boucher, principal for Lancashire-based Platinum Financial Services, specialising in socially responsible investing, said: “People who invest in renewables should do so to get a return, but also to support sustainability and that must be a part of the reason for investing.

“Biomass is one of the areas you would certainly put money into. However, many IFAs don’t understand the sector because there is not a lot written about it and the science behind it.”