The reason it is possible to arrive at such a big and precise number is that 658 million is the number of dollars a big fund manager has just written off the value of its stake in a renewable energy business.

While it may seem impolite to applaud a hefty loss by anyone there is very real sense of justice being served in the decision of IFM Investors to acknowledge that its holding in a company called Pacific Hydro is worth a lot less today than it was last year.

Blame for the $658 million write-down on a business that is exposed to solar, wind and geothermal projects, as well as hydroelectricity, has been attributed to a number of factors including proposed changes by the Australian government to the country’s renewable energy target.

But, as far as The Hog can see, blaming a possible change to a government energy target is a smokescreen because the real issue is that without government assistance, including generous tax breaks and even direct taxpayer-funded grants, many renewable energy projects do not have a sustainable business case.

According to what has been reported so far, half of the $658 million write-down was a result of the possible changes to the RET, which leaves open the question of what was the reason for the other half of the write-down – a rather substantial $329 million.

But before we even get to that question there are four other important issues bubbling away in the loss booked by IFM Investors from its exposure to Pacific Hydro. They are:

• Whether other investors in renewable energy projects will be encouraged by the IFM decision to write down the value of their exposure to the renewable energy sector
• What is the business case supporting an investment in renewable energy if there is no taxpayer-funded assistance
• Whether the authors of recent reports that attacked the business case of the coal industry will reconsider their claims in the light of the IFM renewables loss; and
• Whether members of the superannuation funds that own IFM Investors are aware of what has just happened to the value of their retirement savings.

In reverse order, because The Hog reckons that last point is the most important, it is deeply significant that the IFM loss really does mean a hefty loss for millions of ordinary working Australians who have, perhaps unknowingly, had their savings exposed to the weak business case of renewable energy.

Because it is owned by 30 superannuation funds, which collectively have five million members, IFM is a powerful investor in both stock exchange listed companies and unlisted businesses such as Pacific Hydro.

Financial performance has become a key plank in the claims of anti-coal activists who have authored a number of recent reports critical of the future profit potential of coal mining.

What the IFM decision to write off $658 million in a single investment does is raise the question of which sector really is the better long-term financial performer, coal or renewable energy.

That question can only be answered honestly after the elimination of taxpayer-funded support for renewable energy, an emerging trend as most governments in the western world drift closer to a debt-laden financial crisis, which will force them to stop funding pet political projects.

Of the other issues that should be considered in the wake of the IFM loss there is obviously no chance that the authors of critical coal reports will reconsider their views because they really are on a crusade driven by a religious fervour where facts are secondary to belief.

But the point which most interests The Hog is the question of whether a precedent has been set by the IFM write-down and whether other investors in renewable energy projects with an uncertain financial future (for whatever reason) will consider booking similar write-downs.

There is no guarantee that this will happen but what IFM has done is prise open a crack in the financial claims of people critical of coal mining because it can now be clearly seen that some renewable energy projects are built on a weak business case.

In time, even ordinary members of superannuation funds should start to see that it is their money that is being written off on poor investment decisions.