Dutch asset manager NN Investment Partners suggested in its latest note that high tech suppliers in the onshore wind and solar photovoltaic power sectors are likely to provide the best clean energy returns to investors.
NN IP’s lead impact investing portfolio manager Huub van der Riet said the development of onshore wind and solar PV technologies is speeding up and that they are “poised for exponential growth over the next three decades.”
According to van der Riet, they will benefit from growing policy support for a transition to cleaner energy worldwide to address the threat of climate change.
NN IP’s fund manager pointed out that high quality companies in these sectors can drive double-digit returns on investment.
“Other forms of clean technologies such as geothermal, biomass and carbon capture, which involves collecting CO2 emitted by fossil fuel generation and storing it underground, are either too limited in their scope because of resource availability or are prohibitively expensive,” he assessed.
“However, while onshore wind and solar PV may offer the best possible investment avenues, investing in companies that are part of the global value chain of clean energy technologies requires careful consideration of a number of factors.
“Investors need to understand the evolution of technologies, their cost competitiveness, the need for regulatory support and the technical challenges related to transmission and geographic suitability, to name just a few,” van der Riet added.