Leading solar panel manufacturers have done very well on the U.S. stock markets in recent months.
Because of this, investing in solar energy has become a great proposition. This led some investors to believe that putting money in these companies will eventually lead to profits.
However, many people do not know how to make money from solar energy. There are a number of reasons why investing in solar energy is a great idea for diversified financial portfolios.
Record Low Prices Boost Global Demand
Some analysts worry that a supply glut will continue to suppress solar stocks this year. However, new low prices are sending demand for products much higher. At the same time, demand is expected to jump in Asia, Europe and the U.S. this year.
Aside from that, China is set to double its capacity for the third year in a row. In addition, it is becoming a viable solution for 1.3 billion people around the world that have no access to grid energy. More demand means there is a likelihood that people will make money from solar in the near future.
More Efficient than Ever
Aside from its low polysilicon prices, energy efficiency in this industry is also growing by bounds and leaps. According to MIT’s recent Technology Review, conventional silicon panels usually convert less than 15 percent of light.
However, panels for sunlight energy have scored a 33.9 percent efficiency rating. This is the first time that any module has been able to turn more than one-third of the sunlight that falls directly onto it into electricity. It makes this form of energy generation look more promising for people who want to make money from it.
Big Investors are Getting Involved
Another reason why people are likely to profit from solar energy in the near future is the involvement of huge investors. Although government subsidies are set to decrease over the next few years in the U.S. and Europe for this renewable energy source, big investors are steadily picking up the slack.
A big company that has been investing in solar power for many years reported that it has purchased an energy farm in California for $2 billion. Aside from that, Google reportedly invested over $450 million last year in sunlight energy products. Because of this, profit from solar energy could continue to rise for many years to come.
A Unique Model
Mosaic’s model allows a small investor to invest in debt that is backed by revenue from energy projects. It acts like a bank interested in small energy projects.
If a project passes, Mosaic offers a loan against the revenues from the lease or energy PPA. They then fund this loan by simply parceling out it to numerous small investors in its platform with a minimum investment of only $30. Most of the interest will be passed to investors while it only keeps a slice to pay for its cost.
This project offers a 4.5 percent return to its investors with 1 percent retained by Mosaic. It also has terms of between ten to eight years. With long term CDs offering less than 2 percent, these investments tend to be very popular.