Theory and practice of valuation approaches in renewable energy investments: a survey among investment professionals
by Christian Hürlimann; Jasim Al-Ali; Dolores S. Bengoa
World Review of Entrepreneurship, Management and Sustainable Development (WREMSD), Vol. 15, No. 5, 2019

Abstract: This paper reports the results of a survey among Swiss and German investors in renewable energy (RE) - a challenging undertaking due to the restricted data access for those typically non-trade assets. The research's focus is placed on capital budgeting techniques, risk assessment, risk mitigation, cost of capital approaches, and risk-adjustment processes. The results are both reassuring and surprising. The majority of organisations still employ well-established discounted cash flow based techniques while other approaches propagated in finance theory, such as the certainty equivalent method, are seldom applied. A surprising number of organisations still use their firm's risk within discount rates in RE valuations instead of project risk. Beside of taking systematic risk into account in line with the capital asset pricing model, various diversifiable unsystematic risk components are considered in RE valuation. We also find clear evidence about materialised risk influencing personal risk preferences and some evidence about cultural differences in valuation.

Online publication date: Mon, 11-Nov-2019

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the World Review of Entrepreneurship, Management and Sustainable Development (WREMSD):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email