The Art of Solar Investment, a 2.5 Trillion Opportunity in next 20 years!

But, how to find your real Solar Investment Pro?

In 2015 , renewable energy set new records for investment and new capacity added. Investments reached nearly $286 billion, more than 6 times than in 2004, and, for the first time, more than 50% of all added power generation capacity came from renewables, according to the UN Environment Programme and Bloomberg Climate Change 2017 report . Total venture capital and private equity investment in renewable energy grew to $3.4 billion in 2015. Many of the largest generalist funds maintain dedicated energy-focused investment vehicles that include renewable electricity projects. Key players include Blackstone’s Onyx Renewable Partners, TPG Alternative & Renewable Technologies, and KKR Infrastructure and Real Assets.

Great Sunshine down the road

Bloomberg forecasted of the power industry electricity’s future is sunny and windy. $10.2 trillion in power generation technologies will be invested worldwide in the next two decades, of which 75% will flow into renewable generation sources.

Wind power will garner more than $3 trillion
Solar power will attract more than $2.5 trillion
Nuclear power and hydroelectricity will each get more than $1 trillion 
Gas will only draw $804 billion, and coal even less — $664 billion

Solar energy cost is already getting much cheaper than ever and it’s going to get even cheaper in the future. Solar cost will beat coal in 2032 and beats all fossil fuels by 2039. In 2040, renewables will provide 51% of all electricity generation, and fossil fuels will be 40% only. Solar investment is a strong upward trend.

China, Southeast & North Asia Market

Asia Pacific sees almost as much investment in generation as the rest of the world combined. China and India are a $4 trillion opportunity for the energy sector. China and India account for 28% and 11% of all investment in power generation by 2040. Every country has her own policy to pay back the power generated from recycle power plants. The Feed in Tariff (FiT) pay back mechanism in Asian countries are much attractive than tax credit or tender base offer from US and EU.

Sources : PV, China’s National Development & Reform Commission, METI/Japan, Energy Bureau of Taiwan, SEIA/USA, Renewable Energy Source Act/Germany
* PPA (Power Purchase Agreement): is a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer).

The Art of Investing in Solar Power Plant

Investment to premium solar power plant project is usually conducted by industrial professionals and the project development is a very lengthy and sophisticated process, which will take many long and painful administration and implementation steps as the diagram shown below.

Source: SolarCity Commercial Solar Development Process

A highly qualified solar project development team or EPC company will work with the 3rd party certification agent like VDE or Fraunhofer to implement a very much detailed due-diligence process, such as:

The VDE Institute and Fraunhofer ISE have established this certification as a benchmark utilizing more than 300 specific test points in four key areas including:

  • Electrical and mechanical safety of the system
  • System performance through a highly accurate energy yield report
  • Proper system operation
  • Independent verification for investors, lenders, insurance companies and other stakeholders
Operations & Maintenance Capability will be the Key of Success

To maintain every solar power plant in real time operation and minimize its system downtime is always equally important to high quality solar project assessment & due-diligence process, there are some critical items that need to be watched as:

  1. Forecasting and scheduling (in select markets)
  2. Utility interface and compliance with regulatory authorities
  3. Reporting to investors
  4. Warranty administration and advocacy
  5. Maintenance coordination and communication
  6. Module cleaning and vegetation abatement, Grounds maintenance, pest control, water/waste, etc
  7. End-to-end power plant maintenance (DC and AC), Safety focus (pending ISO 45001 accreditation)
  8. Spare parts, inventory, and supply chain management
  9. Maintenance scheduling with grid operators
  10. Development of plant-specific procedures, Night-time scheduled maintenance for lowest production impact

Real Solar Investment Pro

The solar investment & assets management firms should have the domain knowledge to assess and locate the best investment projects with main competitive advantages as:

  1. Strategic partnership with leading solar EPC companies and well established value chain networks with key component suppliers (solar panels, inverter, racking, monitoring system).
  2. Full understanding & expertise of solar system design, administration, and permitting process.
  3. Strong solar power project development & plant management skills.
  4. Localized & flexible operation and maintenance service team.
  5. Strong smart inverter technology and monitoring system design background.

We believe a whole new solar investment model is now evolving and will enable general pubic to participate the P2P energy trading networks via smart contract that based on block-chain technology. It could be the business model like the Airbnb of Solar, an innovative solar finance/investment platform that connects millions of public investors with premium solar power plants and will allow everyone to access easily in the near term.

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