Growing demand for renewable energy from consumers will fuel institutional investment, says new research
New research reveals that 38 per cent of consumers claim to have renewable energy tariffs for their homes, and just over half (51 per cent) expect to choose these the next time they change tariff.
The findings are from Alpha Real Capital (Alpha), a specialist real assets investment manager, and Cornwall Insight, the provider of research, analysis, consulting and training to businesses and stakeholders in the British, Irish and Australian energy markets.
When asked why they choose renewable energy tariffs, the research found 80 per cent said it is because it is better for the environment, but 46 per cent believe they can get a better deal.
When it comes to the cost of renewable energy, 26 per cent of respondents are prepared to pay more, of those over 70 per cent would pay a premium of 5 per cent or more.
As an investment manager actively deploying long term capital on behalf of institutions who support responsible investing and the transition to net zero, these findings are interesting to Alpha, because growing consumer demand should lead to investors looking to increase their exposure to this asset class.
Recent research from Alpha revealed that over the next five years, 68 per cent of UK pension fund investors expect allocations to renewable energy to increase.
Ben Hall, Group Consulting Partner at Cornwall Insight, says: “With climate change now at the forefront of consumers’ minds, renewable energy tariffs are becoming an increasingly popular choice for customers. Whilst this research mainly focused on residential consumers, it’s also clear from our experience the net zero agenda is increasing demand for renewable energy from corporates and large businesses too.
“This growing demand will undoubtedly send an important signal to the investment community, boosting the build-out of renewable technologies that will help the UK meet its 2050 net zero goals.”
Will Morgan, Head of Renewables at Alpha Real Capital, says: “Growing demand from consumers for renewable energy underpins renewable energy markets and will lead to more investment opportunity.”
Alpha has completed over 50 transactions and invested or committed more than GBP600 million into UK renewable energy, providing secure long-term cash flows to investors.
Alpha’s renewables business invests in a wide range of UK renewable energy infrastructure including wind, solar, hydro, and other low carbon energy resources. Alpha’s renewables portfolio generates over 340 GWh of clean energy - enough to power over 110,000 homes, an annual CO2 offset equivalent to planting almost 50 million trees.
Phillip Rose, Alpha CEO, says: “Alpha has been a major investor in renewable energy infrastructure and along with our commitment to investing in social infrastructure, health care and education, forms a key pillar of our sustainable investment strategy.”