Solar energy is looking more appealing than ever to institutional investors as a result of declining production costs, advances in technology, and a global push for a transition to clean energy. According to Bloomberg, by the year 2040, solar energy will be responsible for 29% of the world’s total electric capacity. The renewable energy sector, which includes solar and wind power, is the one that attracts the greatest amount of investment in relation to the current worldwide energy transformation. According to Bloomberg’s estimates, the amount of money invested in renewable energy infrastructure reached a new high of $366 billion in 2021. This was out of a total of $755 billion invested globally in energy transition-related projects, such as those with a greater emphasis on carbon reduction. According to the figures, this $366 billion represents an increase of 27% from 2020 and 186% from 2011.
According to Jon Pliner, senior director, investments and head of portfolio management U.S. at Willis Towers Watson PLC in New York, “the concept of the climate transition and transitioning to more renewable energy sources is an important concern for institutional investors.” According to the data provided by P&I, WTW had a worldwide institutional AUA of $4.7 trillion as of June 30, an increase of 30.6% when compared to June 30, 2021. According to Rosheen McGuckian, CEO of renewable energy specialist NTR PLC in Dublin, “solar offers geographic diversification, low technology risk, and availability for institutional investors in renewable energy.” Institutional investors in renewable energy typically prefer to invest in a mix of technologies. Investments in the energy transition are a collaborative effort between NTR and Legal & General Investment Management Ltd. “They really value the fact that it is reliable and sustainable over the long run. We break up the stages of the lifecycle in a variety of ways. This allows them to achieve the desired level of combined yield, “Ms. McGuckian remarked.