In the U.S., with rising energy demand and 1% of existing power facilities scheduled to be retired annually, "that is a massive amount of new investment every year. There's fundamental demand," Mr. Boyce said.
"Investors are moving into the (solar) space," particularly as skepticism about high production costs fades, he said. He sees solar and wind as equally important in the renewable equation, but in the U.S., the infrastructure to transmit them "is the No. 1 issue facing renewables," particularly for wind, which "is extremely location specific," Mr. Boyce said.
Connecting power grids is a key challenge for solar energy, along with battery storage, said Ms. McGuckian of NTR. Still, with the EU "now saying we have to accelerate renewables, the fastest will be solar and wind," she said.
"When it comes to Europe, solar is core and central to the whole EU energy policy. It is one of the most cost-effective means of adding any energy option. The planning permission delays are much reduced. It's much quicker to build solar than any other" renewable source, although all suffer supply chain issues, she said.
NTR recently launched a European clean power fund in Europe classified under Article 9, the strictest designation under the EU's Sustainable Finance Disclosure Regulation. Its investors "really like Article 9 because they can actually touch the asset. There is no opportunity for greenwashing," Ms. McGuckian said. "In Europe, that is as important as the yields." For that reason, NTR and LGIM are focusing efforts on capital from Europe and Asia.
By contrast, she said, U.S. investors focus on yields, period, while Canadian pension funds " tend to go direct or co-invest."
That is true for the Canada Pension Plan Investment Board, Toronto, which manages the C$529 billion ($386.4 billion) assets of the Canada Pension Plan. One of its numerous renewable energy holdings is Cordelio Power LP, a renewable power producer managing over 1,000 MW of renewable generation assets across North America, including solar, wind and storage projects.
In the U.S., the $443.2 billion California Public Employees' Retirement System, Sacramento, has a 25% stake in Desert Sunlight Investment Holdings LLC, owner of two major solar photovoltaic power generation facilities near Palm Springs that sell to California power utilities under long-term contracts.
Rajesh Gathala, CEO of European solar developer and independent power producer AMPYR Solar Europe in Basel, Switzerland, expects to see more pension funds going into direct solar investments, typically through real assets portfolios.
"This asset class is becoming more and more recognized by the pension players as a stable, long-term asset class. These are contracted returns over the long term," Mr. Gathala said. As competition for solar investments increases, it is attracting "pension funds that typically would have stayed away," Mr. Gathala said.