Updated: April 15, 2021
When thinking of investments, the challenge lies in identifying which type of investment will be worth it in the long run. Solar energy is a viable option. Besides its powerful impact on the climate and environment, solar offers several advantages on the business or investment side.
Investing in solar energy is one of the most underrated investments, but it can generate adequate returns after a few years. This sector has been showing higher adoption rates, and the technology can keep on growing in the next two decades.
What is Solar Power and How Does it Work?
Solar power is the single most abundant source of energy in the world.
All you need is the sun’s energy, and you can turn this into an energy source for your home or business’s daily electricity requirements. Solar power doesn’t just reduce a household’s or office’s electricity expenses, but it also reduces our dependence on fossil fuels and helps aid in climate change.
The sun’s UV rays penetrate through solar panels – this is the primary concept of how solar power works. These panels convert the sun’s rays into electricity, which is how your home or business can generate enough electricity while still contributing to climate change prevention.
The Current State of Solar Power in the Philippines
Although the Philippines is not a superpower economically, the country has started several worthy initiatives in the solar power industry.
Currently, the Philippines has installed five floating solar beds in Laguna de Bay’s waters. The goal is to determine if the solar panels can withstand extreme weather conditions like gusty winds or strong waves in a typhoon-prone country like the Philippines.
If the pilot project proves successful, it can help electric companies offer lower rates for homes and business organizations.
Benefits of Investing in Solar Power
1. Stable and reliable returns
If you’re looking for an investment with low capital and high returns, solar power is the one you’re looking for.
It’s a low-risk investment with predictable returns that can come in the form of electricity credit. Should you choose to install solar power systems, you can sell any excess or unused electricity to electric companies, which will then send it back to the national grid.
Research also suggests that solar power investments have a high potential to generate between 6.6% and 10.1% of annual returns over the next 35 years.
2. Increase in energy demands
Not many people realize that solar energy as a source of global power is gradually becoming in demand.
This trend means that if you choose to invest in solar power, this will give you adequate returns, in the long run, leading to financial security for your future. The reason behind this is that renewable energy is predicted to grow at a promising rate over the next five years.
3. Improvements in technology
Improvements in solar power technology increase its capacity.
We live in a technologically advanced era, and we’re no longer relying on traditional means of technology. As technology and software advance, the world could use more solar power because of its cost-efficiency. In return, with more and more people shifting to solar, your investment can grow in value.
4. Environmental impact
Pollution is an immediate environmental problem that our world is suffering through today, and this problem may continue throughout the years unless we transition to solar power systems.
Solar energy is a primary contributing factor to preventing climate change and protecting the environment. Solar energy fights against carbon emissions and global warming. It’s not just PR, but the idea of investing n something worthwhile for the betterment of the environment can give good investment mileage.
5. Portfolio diversification
One of the nicest things about being an investor is when you have the opportunity to diversify your portfolio.
You shouldn’t stick to just one instrument or one market because if the odds go against you, there’s no other way for you to go. Solar energy as an investment is very attractive to investors, as it gives you the perfect opportunity of diversifying your portfolio.
Sticking to highly volatile investments like stocks or cryptocurrencies can be risky, and there’s no way to tell which way the financial market can go. Compare this to solar energy, which can give you an edge against inflation or other adverse market trends.
6. Low initial investment
We’ve mentioned earlier how solar energy is an excellent investment if you’re looking for minimal initial investment, the reason being solar energy can give you considerable savings in the long run.
The initial setup costs for a commercial or residential solar panel system may seem large, but that’s just a one-time expense you’ll be dealing with. The upkeep also costs little, especially since solar panels last for years.
With any investment, you don’t just risk your money blindly. You need adequate knowledge of the market to ensure you get a good return. Solar power is an ideal investment, with its low installation and maintenance costs and the potential to sell excess power to the country’s electric grid.
This article is written by Enrique Hormillo, Business Development for SolarNRG Philippines.
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