While putting solar panels on your house is one of the best and most direct ways to invest in solar power and reap the benefits, there are other, or additional, options for investors to support clean energy. Opportunities include equities, investments in startups, investments in community projects and more.
Installing Solar Power
One of the easiest ways for owners of houses to invest in solar power is indeed to put solar panels on their roof. Solar panels can produce power even under cloudy skies, so it is viable even in Washington.
Although electricity rates in Washington are the second lowest in the nation and solar panels may not have as much bang for the buck as they have in other states due to the latitude and weather, EcoWatch says the average payback period for solar panels is about 16 years. Panels can last 25 years or longer. A solar installation in Washington of about 5 kilowatts (kW) will cost about $13,090 to $17,710, EnergySage estimates, with the average coming in at $15,400. As an added bonus, most investors will be able to deduct up to 30$ of the cost of installing solar or storage from their federal income taxes (see link for current incentives).
Washington-based financial institutions, such as Puget Sound Co-op Credit Union and Generations Credit Union, specialize in solar-specific loans for homeowners.
For those who cannot or do not want to own their own solar panels, it is possible to access solar energy with a small investment as part of a larger remotely located solar project.
Community solar remains an option for investors in Washington, although the current focus for incentives, with the 2021 passage of the Community Solar Expansion Program (2SHB1814), will be on solar projects that benefit low-income households. Check with your local utility for opportunities to see what is currently available and what is planned. For example, Snohomish PUD said after it fully funded Community Solar at the Arlington Microgrid and had no waiting list available, but “stay tuned for more opportunities to participate.” In that program, scheduled to run for 20 years, individuals were able to purchase solar energy units (1/5th of a panel) for as little as $120 and receive a monthly credit based on their unit’s production. Similarly, Clark Public Utilities offered 1/12 of a solar panel at a cost of $100 but its five projects are also sold out. PSE may still have a few options that are not fully subscribed.
Invest in Stocks
One of the easiest ways to invest is simply to buy stocks of solar power companies.
Solar power companies are seeing massive growth, Forbes said, and the global solar market is projected to expand by about 7 percent annually through 2030. Forbes’ list of the “best solar power stocks of 2023”, for instance, includes Daqo and Enphase. Other companies include First Solar, which The Motley Fool describes as a global leader that develops, manufactures and sells advanced solar modules or SolarEdge Technologies, which manufactures power optimizers and inverters used to convert the sun’s energy into electricity.
Investors who want diversification at lower costs can invest in exchange traded funds (ETFs), which invest in a number of companies. One option is Invesco Solar ETF (TAN), which US News describes as a dedicated solar fund that buys companies involved with manufacturing or installing photovoltaic equipment, or directly generating power from solar cells. The ETF holds shares in nearly 50 companies and charges a fee of about 0.69 percent.
Invest Directly in Innovators
Investors who want to support leading-edge innovations in the solar industry and are willing to take more risk can invest in start-ups. Whether these new companies succeed depends on factors ranging from their technology and team to sales and competitiveness. While more than half of start-ups have historically failed, others can return 10 times or 100 times the original investment. Investor who are comfortable with that risk can invest with just a little money.
In mid-March 2023, for instance, individuals could invest with as little as $247.50 through StartEngine in Vroom Solar, which produces solar energy kits for portable applications. Its products are in development and it aims to have its first commercial production by the end of 2023
Minimum investments can be an even lower $100 on another platform, WeFunder. Earlier in 2023, for instance, investors could back PowerPanel, which says it offers a hybrid solar thermal technology that is four times as powerful as traditional options.
Investors who want to put larger amounts into start-ups could find companies by doing their own research, finding investing groups such as those listed in the Angel Capital Association or getting referrals from contacts.
Loan Money to Support Solar in Communities
Another way to invest is through platforms that help communities install solar power.
One example is RE-volv, which provides access to solar energy for nonprofits that serve disadvantaged communities. It offers leases that enable non-profits to go solar with no up-front payment and to save about 15 percent on their electricity bills, which is expected to cover the lease payments and generate savings. Investors can place money with RE-volv and benefit through a financial return on their funds. RE-volv says it has funded 52 solar projects in 14 states that provide 14 megawatts and have avoided 95 tons of CO2 emissions.
A similar organization is New England-based ReVision, which enables investors to place funds to help schools, nonprofits and municipalities go solar while earning an economic, environmental and social return.
The returns could potentially be attractive, though there also is a possibility that the platforms or the organizations they invest in could go out of business.
Along with these investments, others such as large-scale investments through venture capital firms also exist. Anyone interested in investing simply needs to spend time researching the options. While big-picture pressures could cause the solar industry to rise or fall regardless of broader clean energy trends, as US News puts it, expected growth in solar over the coming years could well offer opportunities to achieve both impact and positive returns.
This content is for informational purposes only. Readers should not construe any information as legal, tax, investment, financial or other advice. Nothing here constitutes a recommendation, endorsement or offer by Solar Washington to buy or sell any financial instruments.