Top Ten Reasons to Invest in Solar

1. Government Incentives. Governments have, so far, been the major drivers of the solar industry and their intervention is increasing year on year. The 3 global market leaders are Japan, Germany and the US, with Germany in particular bringing in a law in 2004 that has since captured the attention of investors. The Act states that any excess renewable energy that is produced must be bought back by the utilities at a set rate per Kilowatt. Solar gets a preferential rate of 47-57c/Kilowatt compared with any other source, such as wind, depending on the type of installation. As a result, it means that the owner of the solar energy generating system can create an income stream whilst also helping the environment. Similar laws are in place in other EU countries such as France, Spain, Italy and Greece.

2. Secure. In an age where investors are looking for security of their funds as much as growth rates, solar investments can be an extremely secure way to invest your money. In Germany, solar investments come with a 20 year government contract to buy back the excess you produce, and schemes along similar lines are popping up in France, Italy, Greece, Spain to name a few. Your installation can be registered independently of the property at the local land registry so if the property changes hands, the panelling system on the roof does not.

3. A Growth Market. Shifts in energy demand are a major driver for the solar market as a whole; increasing demand for alternatives to oil, coal, natural gas, and other fossil fuels have the potential to cause a paradigm shift for the renewable energy industry. The Solar Energy industry is one of the best performing industries of today. According to Solar Buzz, a solar research group:

• Demand for solar has grown at 30% annually for the last 15 years.

• Solar PV installations rose by approx. 62% in 2007 compared to the previous year.

• Solar prices have fallen 4% on average annually over the last 15 years.

4. Oil Prices Rising. Oil prices have reached a record high, and are still increasing and so it is becoming more and more difficult to find oil and coal reserves, and so driving energy prices up further. A large part of the world oil supply can be found in politically turbulent countries (with OPEC having dominant control over world oil supply and prices) many countries a looking towards energy alternatives in order to break dependence.

5. Everyone is going Green. Through government and media attention, we are constantly being made more and more conscious and aware of our own ‘carbon footprint’. Alternative energy is currently a ‘hot topic’ in the media, and so capturing the attention of homeowners, investors and companies all over the country and the world. With such positive support for the industry of renewable energies, it is now becoming a very sought after and viable part of living.

6. A New Way. Historically, shares and property have been the main investment vehicles available, and right now it seems that these routes to profit are not working. With a lack of equity in the marketplace and the subsequent rise in commodity prices, the financial markets have become an even more volatile place to invest money. Investors will be hearing much more about solar energy as an investment vehicle in the coming months and years. It is becoming cheaper to produce and has an attractive income stream, is government and bank backed, which means it is secure, and it will provide investors with the peace of mind that they are contributing to the global need for energy independence from oil and long term security.

7. Technology. Technological advancement in solar power is coming at a rapid fire pace. Innovation has focused thus far on incremental improvements to the crystalline silicon manufacturing process for the typical PV cell. The advancement of string-ribbon technology and thin-film technology, two new manufacturing processes designed to drastically reduce the silicon required to make PV cells, could dramatically decrease the cost of new PV cells.

8. Immediate Income. One of the great bonuses to Solar investing is the investor can generate income pretty much straight away. In the case that rooftop space is being sourced from them, a typical installation and finance approval period is in the region of 12 to16 weeks, which is a sharp contrast to an off-plan property purchase often taking as long as 2 to 3 years.. Therefore, provided that rooftop space is available, a return on investment begins very quickly and reassures investors as to their decision.

9. High Level of Financing. Because these investments are so secure, as discussed below, banks are prepared to lend to a high level, particularly in Germany. Anywhere in the region of 85%-90% LTV is being offered, which, when compared to the average 50% LTV on property, makes interesting reading.

10. High Yielding. One of the main reasons investors have started looking at solar are due to the high yields on offer. It is difficult to predict from each installation how much income can be generated but banks who lend to buyers are generally looking for a minimum 8-10% yield before approval. Depending on the amount of sunlight, conservatively projected gross yields in the region of 10-15% are easily achievable.