COVID-19 has become synonymous with gloom. This morbid episode will have far reaching impacts on the mindsets of everyone – especially investors! The fragility of traditional investment avenues has been exposed beyond doubt, and amidst the chaos, Energy Assets, especially SOLAR, has emerged as one of the most stable bets for sustained returns!
Energize your portfolio in ‘Dark Times’!
|Investment Avenue / Instrument||Current Scenario & Understanding|
|Stock Market & Mutual Funds||High risk & volatility | Low business activity | Erratic returns | Sentiment driven | Liquidity bubble|
|Debt Funds||Stable but low return|
|Gold & Precious Metals||Highly volatile | High short-term return | Unstable|
|Government Bonds||Stable but low return|
|Real Estate||Attractive purchase rates but poor rental markets | Uncertain recovery period|
|Bank Deposits||Low rate of return | Scams & Bankruptcies of prominent names in banking sector|
|Unsecured Debt||High risk & High return | Risk enhanced due to low business activity|
|Energy Assets||LOW RISK | GUARANTEED STABLE RETURNS | NO EXTERNAL INFLUENCE | NOT SENTIMENT DRIVEN|
So, what makes Energy Asset Investment a Safe Bet?
Energy Asset returns is dependent on one thing alone, the Sun! Unless the Earth stops rotating, you can be sure that Solar generation will happen, everywhere every single day of the year. More importantly, even during Lockdowns! When you invest in Energy Assets, you can be sure that your investment will be generating a return of up to 25% annually without any surprises.
Electricity generated by the solar asset can be used by industries and businesses in addition to the electricity they take from the grid. The idea is to first consume the full solar generated electricity and then rely on standard means for the remaining portion. If Solar generation is in excess of consumption, then it can be transferred back to the grid and monetised. Either way, it will continue to generate returns on your investment.
The Age of Automation!
The energy sector is poised to cater to a huge increase in the ‘demand for power’ in the near future. The Pandemic has compelled companies to rethink their labour-intensive approach and consider a more automated strategy. ‘Social distancing’, ‘work-from-home’ and other facets of the ‘new normal’ have increased our dependency on technology and machines like never before. Even industries like manufacturing, healthcare, hospitality, banking etc are all looking at ways to cut down on manpower and maximize their investments in automated processes. Such a sudden tectonic shift in business processes will have a significant impact on global power demand.
The price per unit of electricity will naturally increase as the demand increases due to limited infrastructure. In such a scenario, an investment in renewable energy assets will yield more than just assured returns.
How to Invest in Solar & what’s the ROI?
There are primarily two ways to invest in solar energy:
- Leasing it as an offtake to a known credible entity
When one choses ‘Self Consumption’ the yield is obviously higher. If you have an existing business that has sizable power consumption (a manufacturing or processing unit or even a factory shed or a warehouse), a solar generation system can cut down your power spends significantly. As explained earlier, at the times of inactivity, the unutilised power can also be monetised. The Return on Investment (ROI) for such units can work out to 25% at the prevailing power rates. This equation can only improve in the long run.
‘Leasing it as an offtake to a known credible entity’ is also a viable option that has gained much popularity of late. In such a system, the investor or a group of investors identify a suitable known business that they feel has such a set up (as mentioned above). The Solar Asset is setup with required metering to calculate the exact consumption. The ‘known’ party then pays the investor for solar power that they off take at a rate far lower than the grid tariff. Standard industry agreements are generally accepted here.
- The entity using the electricity, gives up unutilised space (factory rooftops / sheds etc), for setting up the solar asset.
- The entity pays the investor at an agreed rate for the solar power units consumed as per meter readings.
- The investor enjoys a return in the range of 15% annually.
Benefits of Investing in Energy Assets!
- Investing in energy assets such as Solar is subject to several tax exemptions, holidays and incentives by the Government.
- Fluctuations in Geographical Solar Radiation Count are rare and negligible, hence long-term forecasting of Solar generation is accurate and dependable.
- Apt for big-ticket investors scouting for a guaranteed long-term return.
- Loans specifically for Solar Asset creation are also available at a discounted rate as per Government norms.
- Solar generation systems are durable in nature and Solar cells have a warranty of more than 20 years.
- Solar generation systems need very basic maintenance.
- Power generation happens throughout the year – even in overcast conditions.
- These investments are treated as a capital expense that is subject to depreciation.
- Solar energy contributes significantly towards earning Carbon Credits. This is essential for manufacturing and heavy industries.
Nimbus – Without a shadow of doubt!
2020 has been a year to forget. The cloud of uncertainty has cast a shadow on so many economic fundamentals that we always took for granted. Amidst such volatility, Solar is definitely a frontrunner for discerning and cautious investors.
Nimbus Solar Solutions has been working tirelessly to innovate customised arrangements and products that suit the risk appetite of the most cautious of Investors in such difficult times. To know more on how you can invest in energy assets:
Call / WhatsApp: +918420988929