Nothing is certain but death and taxes. But most of us are confident that the sun will keep shining. In light of that (pun intended!), we thought we’d take a look at some of the reasons solar projects are relatively safe investments — whether you’re looking to put solar on your home or invest in a solar project elsewhere.
1. The sun will keep shining
Let’s face it: if the sun stops shining, we’ll have bigger problems than the safety of our investments. But all signs point to the sun shining for another 5 billion years. Most of us expect to recoup our investment before then.
And not only will the sun keep shining: It currently shines enough rays on the United States every day to more than power us for 10 years. If countries like Germany can make great use of this resource, imagine what we can do in the United States, where we have a lot more sun. The sky’s the limit!
2. Solar is a proven and reliable technology
Solar panels have been around for a long time now and have proven their reliability. So when you put your money in solar, you’re not investing in the latest shiny object.
Some solar systems installed in the 1970s have lasted far beyond their warranties and are still producing. And while it’s not a new technology, improvements in recent years have made new systems even more reliable.
Solar is a relatively simple technology, with few moving parts. Solar panels are durable and require little maintenance. They’re easy to install. This all adds up to a low risk when it comes to solar technology.
3. Solar comes with standards and protections
In case you’re still worried about your solar system or your investment in a solar project, manufacturers typically offer 25-year warranties for the equipment, minimum production guarantees, and insurance to protect against events like fires or hurricanes.
As more people look to solar as an investment opportunity, more safeguards are being put in place. In a prominent example of this, a number of leading businesses and research groups like DuPont, Standard and Poors, and the Rocky Mountain Institute recently founded the industry consortium truSolar. Their goal is to standardize the risk evaluation process for solar projects.
4. Solar projects are tangible
Investing in a solar project is not the same as investing in a company’s stock. When you invest in a business, you can’t know how successful it will be. And the stock market is so mysterious and volatile that a company’s announcement of solid earnings can be met with a tumble in their stock price.
When you invest in a solar project, in contrast, you’re buying into a tangible asset. And it’s an asset that depends on a proven technology using the rays that we know will keep shining on it. That means the asset is likely to produce revenue right away, and to keep producing it.
So if you put solar on your own roof, you can be confident that it will produce power for you. And if you invest in a solar project elsewhere, you can know that your investment is backed by a tangible, revenue-producing asset.
5. Solar saves money
Maybe you’re convinced by now that it makes sense to invest in a solar project. But if you need one more reason, we have a good one for you.
Say you invest in a project backed by a revenue-producing solar asset. How do you know the counterparties to your investment will hold up their end of the deal? Like we said, nothing’s sure but death and taxes. However, the likelihood of the counterparties defaulting is low. Why? Well, they’re already paying their power bills (or they wouldn’t qualify for solar). The solar system will lower their bills, making them even less likely to default. So solar not only lowers their bills — it lowers your risk.
With the price of solar continuing to fall and the costs of fossil fuels rising, solar is poised to become a better investment all the time. It’s already outperforming the S&P 500 in 13 states, and major investors are taking note. And now, the chance to invest in solar is becoming available to the rest of us.