Small streams, diverse sources: Who invests in renewable energy in Finland during the financial downturn?

This article addresses the investment gap in renewable energy sources identified by several authors. Examining the case of a country, Finland, which introduced policy measures to diversify its renewable energy portfolio, we analyse the development of investments in renewable heat and power in response to new policy measures and contextual factors during the downturn period 2009-2013. We investigate investor heterogeneity, i.e., the diversity of logics employed by different types of RES investors. In spite of a severe financial recession, we find an emergence of new sources of investment. Among these new investor types, we find diversity in investment drivers and available options. These include investors mobilized by the feed-in-tariff to seek profitable targets and investors such as real estate owners investing in heat pumps for their own use and benefiting from low interest rates. We find that the diversification of investors supports the diversification in RES sources, and brings in new investors undeterred by the financial downturn. Our findings imply that policy-makers should recognize that the responses to distinct incentives and pressures vary by investor types. This also means that a mix of policies is required to maximize the contribution of different sectors to filling the renewable energy investment gap.