Obama's latest tax package included incentives to make solar micro-utilities a fantastic alternative investment opportunity.
What is a Micro-Utility?
In a solar micro-utility, the investor pays to install a solar system on a business' rooftop. That business then buys the solar electricity from the investor for 20 years.
As the investor, you own the hard assets of the solar, all the tax credits, and the rights to the income stream. Greenzu simply sets up the project, and provides operational and maintenance support.
Why Solar is a Wise Investment
Of all the green investment options, a solar micro-utility project is without a doubt the most efficient, low-risk option on the market today. Consider what the low-hassle; minimal-risk nature of the power purchase agreement (PPA) structure has to offer you as a renewable energy investment:
Attractive internal rate of return Reliable cash flows Rapid repayment of capital from strong tax incentives Stable asset valuations from ownership of durable assets Inflation protection from escalating project revenues Potential future revenue from climate change programs Competitive return rates for low to moderate investment risk
How PPAs Compare to Other Investment Opportunities
A Solar PPA investment functions like a fixed income investment but offers higher returns typically found in riskier equity investments, as well as a whole host of other benefits not available through stocks and other conventional investments.
There are also several PPA characteristics that differentiate this investment type from other typical clean tech investments. For instance:
PPAs are in an income generating asset, not in an operating company. Traditional stock investments hope for a blockbuster exits to provide investor a return. Micro-utilities generate their own cash flow, so investors know what their return is going to be from Day 1. PPA investments offer near term liquidity PPA investors have exit options through sale of project assets, recapitalization, or securitization of the micro-utility income streams
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