David Taylor reported this story on Wednesday, April 8, 2015 18:25:05

MARK COLVIN: A global renewable energy report says the world spent a record $US 270 billion on clean energy technology last year. In contrast, investors say Australia's clean energy market isn't growing at all.



Independent experts claim the nation is missing out on lucrative investments because of policy gridlock on the issue.



David Taylor reports.



DAVID TAYLOR: The clean energy market is attracting big dollars, and the market's only getting bigger.



Nathan Lim is a portfolio manager at Australian Ethical Investment. His fund specifically targets renewable energy investments.



NATHAN LIM: So basically, the way we look at it is that you switch from coal to gas, and then from gas, you ultimately make the transition to renewables once battery storage becomes more available and more affordable.



DAVID TAYLOR: As an investor, as an investment manager, portfolio manager, are you looking for the best returns for your fund and for your clients, or are you actively looking to push investors away from polluting industries into cleaner, more renewable sectors?



NATHAN LIM: It's not that black and white for us. What we try to achieve, and we have achieved at Australian Ethical, is to basically promote or pursue both avenues in the sense that not only do these investments need to stack up from economic case, but they also need to be consistent with our charter.



DAVID TAYLOR: The problem for investors like Nathan Lim is that the clean energy market in Australia is still relatively small.



That's something the Carbon Market Institute wants to change. Peter Castellas is the chief executive.



PETER CASTELLAS: Investing in low carbon technologies and innovations is going to be important for both the development of the carbon markets and the renewable energy industry.



DAVID TAYLOR: The renewable energy target, or RET, is a legislated Australian Government scheme with the goal of sourcing 20 per cent of electricity from renewables by 2020.



But fund managers say investors haven't been confidently throwing their money behind the industry because of Government policy uncertainty.



NATHAN LIM: It's not so much that the exact math of the target needs to be debated, it's the fact that we've had such a protracted debate is what is scaring investments, both domestically and from foreign investors as well.



DAVID TAYLOR: The Carbon Market Institute's Peter Castellas agrees more needs to be done to boost investment in clean energy.



PETER CASTELLAS: The renewable energy sector has seen significant growth over the years in Australia and globally. It is a viable market that we are in competition for attracting investment dollars in Australia compared to other jurisdictions.



DAVID TAYLOR: Are we behind the eight-ball, though, in terms of attracting overseas investments?



PETER CASTELLAS: A stable policy environment and a long-term, clear market signal is always going to be helpful to attract investors to manage their risk.



DAVID TAYLOR: Portfolio manager Nathan Lim says an obvious place to start for Australia is storing and using solar energy.



NATHAN LIM: This country has got one of the strongest solar resources in the world, and it is not being utilised. And we think that is a tremendous waste. We, as a nation, should really try to tap into this source that, when it is available, we should be using it.



MARK COLVIN: Fund manager Nathan Lim ending David Taylor's report.