COVID-19 has become synonymous with gloom. This morbid episode will have far-reaching impacts on the mindset of investors! The fragility of traditional investment avenues has been exposed beyond doubt, and amidst the chaos, Energy Assets, especially solar energy, have 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 the 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 Solar Energy Asset Investment a Safe Bet?
Solar Energy is dependent on one thing alone, the Sun! Unless the Earth stops rotating, you can be sure that solar generation will happen everywhere every day of the year. More importantly, even during Lockdowns! When you invest in Solar Energy, you can be sure that your investment will generate a return of up to 25% annually without any surprises.
Electricity produced by solar energy can be used by industries and businesses in addition to the electricity they take from the grid. The idea is first to consume the full solar-generated electricity and then rely on standard means for the remaining portion. If solar generation is in excess of demand, 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 solar 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 significantly impact 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 Energy & what’s the ROI?
There are primarily two ways to invest in solar energy:
- Self-Consumption
- Leasing it as an offtake to a known credible entity
When one chooses‘ Self Consumption’, the yield is obviously higher. A solar energy generation system can cut down your power spending significantly if you have an existing business with sizable power consumption (a manufacturing or processing unit or even a factory shed or a warehouse). As explained earlier, at 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 set up with the necessary meters to calculate the exact consumption. The ‘known’ party then pays the investor for solar energy that they off take at a rate far lower than the grid tariff. Standard industry agreements are generally accepted here.
- For the operation of the solar asset, the entity using the electricity gives up unutilised space (factory rooftops/sheds, etc.).
- The entity pays the investor an agreed rate for the solar power units consumed per meter reading.
- The investor enjoys a return in the range of 15% annually.
Benefits of Investing in Energy Assets!
- Investing in energy assets such as Solar Energy 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 looking for a guaranteed long-term return.
- Loans specifically for creating solar assets 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 toward earning Carbon Credits. This is essential for manufacturing and heavy industries.
Nimbus – Without a shadow of a 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:
Visit: nimbussolar.in
Call / WhatsApp: +918420988929
Email: mudit@nimbusirrigation.in
