A bright future for solar power

Fidelity Investments is the world’s biggest investment manager. It has more than $1tn in its custody, and its hard-nosed managers scour the world to exploit the best profit opportunities. It believes in the efficiency of free markets. Pinko-lefty Guardian types are thin on the ground.

Yet the organisation recently sent five of its top money managers to a solar-power conference in Spain, not because it wants to tackle climate change, but because it believes solar power will be a money-spinning industry of the future. Fidelity is investing heavily in hi-tech solar- and wind-power companies, where German, Danish and Spanish players lead the world.
Colin Stone, manager of its top-performing European Opportunities fund, includes companies such as Denmark’s Vestas and Germany’s Q-Cells in his portfolio. He believes that we’ve only started to scratch the surface of a massive new growth industry. “We have a high degree of confidence that solar will hit grid parity by 2011 in Spain.” In other words, green power will soon be the same price or even cheaper than dirty power. It’s a fabulous prospect.

But thank the Germans rather than the Spanish, and thank old-fashioned state intervention rather than free market economics. As Stone acknowledges, “the application of early government spending has helped to jump-start this industry. Without the subsidies, the whole industry would be many years behind in reaching grid parity”.

Guardian