Jim Mellon, the financier who predicted the current world financial crisis two years before it happened has given his weighty support to solar energy as both a means of replacing fossil fuels and of creating healthy yields for investors. In a recent rich list compiled by The Times newspaper, they made special mention of entrepreneurs who have branched out in to renewable investment. Among these, Jim Mellon features highly because of his reputation as a man with a track record of forecasting market trends twinned with a portfolio of shrewd investments.

Mellon, based in the Isle of Man and with a net worth of around £500m is established as one of the largest employers on the island and although some of his assets have come under pressure from the international financial crisis, he continues to look towards renewables as the future.

Jim Mellon was quoted in The Times as saying,

“Solar is genuinely clean, it ticks all sorts of zeitgeist boxes. Within five years, solar power will be as cheap as oil and gas without the subsidy,” adding that, “It will be bigger than the internet in five years”

Mellon backed up his words last summer by investing in a mining company called Emerging Metals which focuses on metals used in the manufacture of the latest photovoltaic technology. It is believed that in 2010, with the introduction of the feed-in tariff in the UK, there will be a boom in solar investment as the government will guarantee premium rates for megawatts generated by small solar and other renewable producers. Leading entrepreneurs on the rich list have already made this connection and are starting to back renewables before they boom.

According to a recent survey conducted by the Center for Alternative Technology (CAT), the majority of British households would consider adopting photovoltaic technology with 90 per cent saying that they would consider and 23 per cent saying that they would definitely adopt the technology in their homes. From the 750 homes which were surveyed, the results show a shift in general public opinion towards the practical application of renewable technology, especially if it is something which proves to be financially viable in the long term.

The long term financial viability of all small-scale renewable projects hinges largely on the upcoming Feed-in tariff, likely to be introduced in 2010. The principle of the tariff is to offset the expense of producing power by non-fossil fuel means and provide incentives to those wishing to invest in renewable plant such as photovoltaic technology. The fixed rate for megawatts fed-in to the national grid by small scale renewable power producers is paid for by existing power companies who are obliged by the government to buy the renewable megawatts, the cost of which is spread across the consumers.

The survey noted that this high potential take up of PV technology would be dependent on the feed-in tariff paying 50p per unit of energy supplied in to the grid. In Germany, this exact system of tariffs has been used successfully to make Germany one of the worlds leaders both in terms of PV technology adoption and public awareness of greener energy production.

CAT spokesman, Mark Watson commented,

“Photovoltaic systems are one of the easiest renewable energy technologies to integrate in towns and cities and as the survey results show, they are generally liked by the general public.”

In a bid to find a solution to the energy crisis facing their country, Pakistani delegates have met in the UK as part of an alternative energy drive which has been necessitated by a fear of dependence on fossil fuels. During their visit to the UK, the Pakistani group toured various successful renewable energy projects around the country and consulted specialists in order to find possible viable alternatives to fossil fuels which have proved not only dirty, but also expensive and precarious in the region.

Arif Allauddin, Chief Executive of Alternative Energy Development Board who led the delegation on the four day visit highlighted both the need for investment and a need for foreign specialist help in developing a successful Pakistani renewable energy program. After visiting a wind farm near Glasgow, Allauddin asserted that for Pakistan, wind energy represents the best alternative to fossil fuels and that the Pakistani government has already set aside large swathes of land for the construction of turbines between Karachi and Hyderabad.

The Pakistani Alternative Energy Development Board has been keen to highlight the fact that renewable investment in their country offers very attractive returns, using the current example of a Turkish company apparently already generating power wind power in Thatta. The UK government, having already passed the Energy Bill in November of last year, has provisions that will consolidate and help attract further investment in renewables in this country. The proposed feed-in tariff, set to be introduced in 2010 will entice investors by guaranteeing a fixed rate for energy fed in to the national grid from green sources. The Pakistani delegation claims that their government is taking similar measures in order to attract UK investors in to their renewable market.

Having already been impressed by some of the renewable operations currently producing power in the UK, Allauddin made clear the fact that Pakistan will, sometime in the near future have to start generating a far greater percentage of its megawatts from renewable sources if it is to protect itself from any future fossil fuel crises.

The renewable energy industry has warned that the renewable energy sector risks failing in its infancy if the proposed closure of the micro-renewables fund, worth £50m goes ahead. The possible loss of funds along with the news that feed-in tariffs will not be introduced until 2010 has concerned some members of the industry who have lobbied the government for essential funds, crucial to the development and investment in small, renewable installations.

Ed Milliband, Secretary of the newly formed Department of Energy and Climate Change announced that all funding for low carbon public sector buildings will be withdrawn from June 2009. The scheme, called the Low Carbon Buildings Program (LCBP) has, until now paid up to half of all costs incurred in the installation of micro-renewable facilities in public sector buildings and has been absolutely essential for covering the inevitable cost of installing renewable energy plant.

Philip Wolfe, Director of REA criticised the government proposal stating, “The government rightly talks about a green jobs revolution, but these initiatives will be strangled at birth if the companies that deliver them have no market in the meantime.”

Lobbyists are arguing that the government should continue the funding program at least until the introduction of feed-in tariffs in order that the industry, in particular manufacturers of heating units do not collapse. The proposed feed-in tariff will help renewable investors by guaranteeing a fixed, premium rate for power fed-into the national grid. The premium rate paid for the green megawatts will be paid for by existing power companies and will offset the expense of generating power by renewable means. In places such as California, Germany and Australia this scheme has been extremely successful as a way of attracting investment.

The importance of the LCBP and the vitality it provides to the industry was highlighted by Ray Noble, ex UK head of BP Solar, “Before, there was about £8-10m worth of funding per year. The LCBP nearly tripled the amount.”