Renewable energy could be the way forward for investors

Investors expect more floats of renewable energy companies this year, Ernst & Young has said.

40% of investors expect new money to be raised through initial public offerings (IPOs) by renewable companies in 2008 to be on par or higher than that raised in 2007.

'Although the credit squeeze has reduced the amount of liquidity in the market available to investors, the results of the poll suggest that renewable projects will continue to attract healthy levels of investment' said Ben Warren, director in Ernst & Young's renewable energy team.

The results did highlight that investors believe the EU would not exceed or even reach its target of reducing carbon emissions by 20% by 2020 according to 53% of respondents.

Warren said: 'This suggests that more needs to be done to support and incentivise the industry across Europe in the short term, to help EU member states achieve the mandatory 2020 targets'.

In the US renewable companies can take advantage of the production tax credit, which is currently under consultation to be extended, and is designed to incentivise renewable energy companies with favourable tax breaks.

'If investors believe not enough is being done to improve the market for renewable energy then they will be less likely to invest and support projects there' said Warren.

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