Fund manager Pascal Schuler of Swisscanto, the Swiss banking joint venture has asserted his belief that renewable stock will offer the best return for investors in the post financial crisis climate, certainly when compared against fossil fuel investments. Speaking specifically about the Swisscanto Fund Green Invest Equity, Schuler commented that portfolios based on traditional fossil fuel energy such as natural gas, coal and petro-chemicals would prove to be unsustainable within the next 20 years.

Schuler believes that the combination of fossil fuel degradation along with the global move towards renewable energy in light of international carbon reduction treaties will give green stocks a sustainability which will be robust against market fluctuations.

“Water, solar and wind energy are areas where we invest in the long-term, as there is an over-average growth potential when financing kicks off again. Banks will prefer them when they start lending,” commented Schuler who sees green stocks as a healthy, high yield option.

Investors will be attracted to renewable sectors in countries where there is comprehensive legislation in place to protect investment and ensure a long-term viability for capital injected into new, renewable technology. Many governments have introduced feed-in tariffs as a way of attracting investment by offering long-term contracts to renewable investors with a fixed, premium rate guaranteed for any megawatts fed-in to the national grid. Certainly in Germany, this particular system of tariffs has been an extremely successful way of offsetting the cost of generating electricity by renewable means rather than by traditional fossil fuel methods. Many inside the industry will be hoping for a similar system to be introduced in the UK in 2010 but until then Germany has proved to be a hotbed of green technology especially in regards to photovoltaic (PV) technology.

The Swisscanto green fund, worth around $205 million has already taken an interest in German renewable stock and is looking to build its portfolio in the German PV sector. The fund has plans to invest in German renewable sector companies SolarWorld, SMA and Wacker Chemie and will certainly look elsewhere once other countries have strong legislation in place to kick-start the renewable energy industry.

Schuler finished by saying, “We will continue to invest in this segment but focus on companies which have a strong balance sheet and are able to survive this crisis.”

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.

In a bid to differentiate itself from it’s neighbours and other OPEC states, Sheik Mohammed bin Zayed Al Nayhan, Crown Prince of Abu Dhabi has asserted that at least 7% of its energy production will come from photovoltaic sources by 2020.

Having already vaunted itself as a possible headquarter location for the planned International Renewable Energy Agency (IRENA), the Arab state is looking towards a solar future believing that once its fossil fuel resources are expended, viable alternatives will be essential. Currently, Abu Dhabi has around 8% of all global oil reserves and relies heavily on this resource as its major export. Unlike some of its neighbouring states, Abu Dhabi is looking to diversify both its economy and means of energy production as a means of protecting itself against the eventuality of exhausting their current oil reserves.

A spokesman for the Middle-Eastern state was quoted as saying,

“Many [Opec members] see renewables as a threat but the crown prince sees them as an opportunity. He [The Crown Prince] knows that the oil will eventually run out and he wants to ensure there is something left for future generations”.

The move towards solar energy in Abu Dhabi is being led by a private company, Masdar. Masdar hopes to build a completely carbon neutral city in Abu Dhabi using not only solar but also geothermal and wind power. The Masdar group is also making great strides to develop relationships with the west having already invested in British Energy company E.On and achieving the patronage of Prince Charles.

Financial consultants Ernst & Young have rated the UK as the fifth most popular country to invest in as a result of the Energy Bill which was passed in November according to their Renewable energy country attractiveness indices.

Britain’s rise to joint fifth with Spain has been attributed to recent legislation which specifically sets out provisions for the introduction of Feed-in tariffs by 2010. Feed-in tariffs are fundamental to investors as they guarantee a premium fixed rate for energy fed back into the national grid by small, renewable energy producers.

Also, acting as an important stimulus for investors is the falling value of Pound Sterling which is predicted to reach parity with the Euro in the new year.UK renewable projects increasingly expensive as imported technologies from Europe continue to rise as a result of the exchange rate.

“The falling value of the pound is making

“The declining price of oil is compounding the problem by reducing project revenues as wholesale energy prices fall, resulting in many projects becoming uneconomical. It is unlikely that falling commodity prices such as steel and copper will compensate enough” predicts Head of renewable energy at Ernst & Young, Jonathan Johns.

The recent Renewable energy country attractiveness indices saw Germany reach first position as a target for investors and is now seen as the leading light in terms of viable renewable energy innovations.