Solar Investing 101

Why does investing in solar make sense for you?

Solar energy is no longer the future, it is here today. The last several years have seen solar energy mature from a frontier technology to a cost effective solution for customers. As a result, installations of solar have skyrocketed, along with the investment needed to keep up. We provide you an opportunity to take part in this historic growth.

We provide investors with direct access to investment ready clean energy assets that ensure predictable cash flows and returns. The business model for most clean energy projects include a project owner who installs solar panels, for instance, on a customer’s property. They then sell the electricity produced by that project to either the property owner or another third party.

Solar is a growing market

  • According to data from the U.S. Energy Information Administration (“EIA”), in 2016, ~4.08 trillion kilowatthours (kWh) of electricity were generated at utility-scale facilities in the United States.
  • The EIA estimates that U.S. large-scale solar total PV capacity was approximately 22 gigawatts (GW) at the end of 2016 and forecasts that by the end of 2018 that such capacity is projected to rise to approximately 32 GW.
  • According to EIA, approximately 70-80 gigawatts of new wind and solar photovoltaic capacity is expected to be added from 2018 to 2022, requiring $100-$150 billion of capital to build and develop.
  • Goldman Sachs Research estimates that more than 200 gigawatts of renewable energy projects will be installed between 2017 and 2030, requiring $360 billion of capital expenditures.
  • The 14-year opportunity for renewable energy equates to a $26 billion annual capital spending opportunity split between wind, utility scale solar and distributed generation solar
  • 26GW of solar installed in the next two years: the same amount that has been installed in the entire history of the industry
  • $7.4 Trillion in clean energy investment by 2040
  • 40% of energy from clean energy by 2030

PV Deployment Forecast (MWdc) per Year

U.S. Solar Market Forecast

Source: SEIA.org

How does solar investing work?

Solar projects have two revenue generating attributes: power and, depending on the state, renewable energy credits (SRECS). The project owner will enter into long-term contracts to sell the power. The project owner will also typically (but not always) enter a long-term SREC contract. This creates two reliable and ongoing revenue streams.

Traditionally, expenses are relatively predictable, including annual rent, maintenance, insurance and property taxes; infrequent equipment upgrades are also expected; investors are effectively buying the predicted cash flow.

Investments that are offered through CleanCapital are operating, cash flowing assets well-suited for long term investors.

What makes a solar asset ready for investment?

Stable, Long Term Cash Flows. We purchase seasoned clean energy assets generating long-term contractual cash flows. The revenue is generated by selling the power from the solar projects through contracted Power Purchase Agreements (PPAs). The PPAs typically have a minimum 15 – 20 year duration with an investment-grade quality creditworthy offtaker (examples include Fortune 100’s logistical facilities, universities, hospitals). Each portfolio can have a diversity of cash flows from projects that are diversified by geography, off-take counterparty and size of asset.

Our team conducts a thorough due diligence on every project and works with an experienced team to manage operating clean energy projects for investors. We make it easy and attractive for you to invest – no committed capital, attractive returns, and low fees. Our low fees mean better returns for you!

Still have questions? Head over to our resources center for more information.