Background to The Scheme

The Demand for Renewable Energy

Renewable energy, and in particular solar energy, is the most effective response to three global problems; the ever-increasing demand for energy, the catastrophic environmental impact of oil, coal, gas, and nuclear energy, and the need for energy security – ending the fuel monopoly of a handful of resource-rich countries and companies.

The Kyoto Protocol

The case for governmental support is overwhelming. Since signing up to the Kyoto Protocol, governments are pursuing renewable energy not just for environmental concerns. They are bound by international treaty to reduce emissions.

Already Germany has announced that it will decommission its 17 nuclear power plants which generate one-quarter of the country’s electricity by 2022 and the UK has announced its intention to tie itself to legally binding agreements to increase its commitment to renewables to over 30% of overall consumption by 2025. There are now 59 countries world wide that have adopted the Feed in Tariff system.

Sovereign Secure Feed in Tariffs (F.I.T.)

Perhaps the most effective policy response has been the widespread introduction of Sovereign Secure Feed-In Tariffs. Feed-in Tariffs pay renewable energy producers a set rate for each unit of electricity fed into the national grid at a fixed price for a minimum term, usually 20 years, and backed by EU legislation. Effectively, it’s a price premium designed to attract investment into renewable energy sources and to reward efficient energy production.

This ensures that renewable energy can be profitable now, even while production costs exceed those of fossil fuels.

Currently over 119 countries have a renewable energy policy with 59 of these
having implemented Feed-in Tariffs. Instead of subsidising the construction costs of
renewable energy production facilities, Feed-in Tariffs reward the output of energy
itself through a high government guaranteed income streams, guaranteed income
streams and guaranteed demand so that efficient producers can achieve an attractive
financial result. Best of all the costs of these premium prices paid to the producers of
green energy are paid for via a levy on all electricity consumers. As they are not paid
for from government budgets they have proved immune to the bailouts in Ireland,
Portugal and Greece.

Bail-out Resistant

Solar energy, supported by robust governmental policy, has so far proved incredibly resistant to the financial upheaval felt in almost every other sector.

The MSCI World is a stock market index of 1,500 ‘world’ stocks. It is maintained by MSCI Inc., formally Morgan Stanley Capital International, and is often used as a common benchmark for ‘world’ or ‘global’ stock funds.

MSCI World average return 2002-2011 = 3.7% p.a.
Solar 21 consistent return to investors = 7.5% p.a.

WARNING: These figures are estimates only. They are not a reliable guide to future performance of your investment

Future Growth

With rising fossil fuel prices and ever-improving efficiencies in solar technology,
solar energy could reach Grid Parity as early as 2015 in some countries, when the cost
of solar energy will no longer be more expensive than oil, coal or gas. This tipping
point is expected to lead to enormous growth in the demand for solar, and a huge
reduction in our reliance on traditional sources.