Investing in solar energy these days isn’t as cut and dry as it used to be. As with all markets, there are lots of gears at work that contribute to succes of failure. Solar energy is no different. Between private solar royalties, financing and subsidiary programs, direct ownership, and publicly traded companies, the options can seem overwhelming.
One of the most popular methods is investing in publicly traded solar energy companies. Some of the front runners in the industry are Enphase Energy (NASDAQ: ENPH) and First Solar (NASDAQ: FSLR).
Enphase is a leader in residential and commercial solar microinverters, while First Solar is a major player in utility-scale solar projects, particularly in the United States.
Today, we’ll be discussing these two companies and whether they are solid options for investing in solar energy. We will also look into private solar royalties. Private solar royalties are a lesser-known option than buying solar stocks, but it could be just as lucrative – maybe more. But before we get into the pros and cons of private solar royalties, let’s get into the details of these solar stocks.
Investing in Solar Energy Stocks
Solar stocks have had an interesting run since they started making mainstream headlines in the mid-2000s. While solar stocks may be taking a little bit of a dip in 2024, there’s no denying it: solar energy has had monumental growth.
In 2010, the global installed solar capacity registered at 40 GW (gigawatts). At the end of 2022, there the total number of GWs was 1,177. So while photovoltaics have seen an increase of 2,842.5%, you would think the companies producing them would have a similar increase in profits.
Unfortunately, it’s a bit more complicated than that. Much like consumer tech, solar panels are considered more of a luxury than a necessity at this point. The fact that California’s NEM 3.0 stage recently kicked in doesn’t help either.
If you didn’t know, residents of California were given energy credits for installing solar. It was a great way to save some extra money on your energy bill. In December of 2022 however, the California Public Utilities Commission (CPUC) voted to approve the third stage of net metering. Why is this bad? Because it reduced the energy credits by roughly 75%.
The cost of solar photovoltaic (PV) technology has also declined dramatically, making solar energy more affordable and competitive with traditional fossil fuels. The cost of solar panels has decreased by more than 80% since 2010.
Now, while solar stocks may not have shot up 2,800+%, they have had a very lucrative few years. Two stocks that have been garnering a lot of attention are First Solar and Enphase Energy.
Investing in Solar Energy: Enphase Energy Inc. (NASDAQ: ENPH)
Enphase Energy, Inc. is a renewable energy technology company that specializes in solar microinverters and solar energy solutions. Founded in 2006 and based in California, Enphase is known for its innovative microinverter technology, which converts direct current (DC) electricity generated by solar panels into usable alternating current (AC) electricity for residential and commercial applications.
Enphase’s products are designed to maximize energy harvest, increase system reliability, and simplify solar panel installations. In the last five years, ENPH stock has seen an increase of 1,539% (at time of writing).
ENPH has caught the attention of investors for good reason. They have a consistent track record of growth, strong management, and a plan for the future. But Enphse isn’t the only solar stock worth looking into.
If you’re investing in solar energy, it’s hard not to take a look at First Solar.
Investing in Solar Energy: First Solar (NASDAQ: FSLR)
First Solar, Inc. is a leading American solar energy company that designs and manufactures thin-film solar modules. Founded in 1999 and headquartered in Arizona, First Solar is known for its advanced thin-film solar technology, which offers high efficiency, reliability, and low environmental impact compared to traditional solar panels.
While Enphase deals with mostly residential solar panels, First Solar’s modules are widely used in utility-scale solar projects around the world. First Solar prides themselves on contributing to the reduction of Earth’s carbon footprint.
First Solar distinguishes itself with its thin-film solar modules, which offer advantages such as higher efficiency in hot climates and lower degradation rates over time compared to traditional silicon-based solar panels. First Solar’s modules are also known for their low carbon footprint and environmental impact.
And while FSLR stock hasn’t returned over 1,000% in the last five years, it’s treated investors well:
Ultimately, the best solar stock for you will depend on your individual investment goals and risk tolerance. If you are looking for a company with a strong track record and a diversified product portfolio, Enphase may be a good option. If you are looking for a company with a lower valuation and exposure to the global commodity market, First Solar may be a better choice.
Investing in Solar Energy with Private Solar Royalties
If buying publicly traded solar stocks doesn’t appeal to you, there is another option. Private solar royalties are payments made to landowners who allow solar developers to install panels on their property. The amount of the royalty can vary depending on the size of the project, the amount of energy produced, and the terms of the agreement.
To put it more simply, they are monthly cash dividends you can earn from various solar projects across the globe. But it’s even better than that…
Imagine a portal where the world’s wealthiest investors, including Elon Musk, Jeff Bezos, and Warren Buffett, access exclusive solar projects. They choose projects, invest, and start earning substantial monthly cash payments immediately.
These investments offer impressive returns, with some estimated to yield up to 16% internal rate of return.
What makes these investments even more attractive is that they are not affected by public market fluctuations. These are private deals, and your monthly payments come directly from the company, insulated from market volatility.
This is a unique opportunity to profit from the booming solar market with private solar royalties. If you’re interested, Jeff Siegel has the best connections when it comes to private solar deals. In fact, he’s prepared a brief beginner’s guide to help you get started.
Final Thoughts on Investing in Solar Energy
At the end of the day, only you will know what move best fits your investing strategy and philosophy. To stay on top of the latest solar developments, particularly for Private Solar Royalties, be sure to subscribe to Energy and Capital.
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