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July 5, 2024

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Investing Shasta Power

Why Utility-Scale Solar Investment Funds Outperform Stocks

By Shasta Power

At the end of the day, do you want to feel certain that your investments are making a difference in the world? Savvy investors can empower their portfolios while supporting a more sustainable future by investing in utility-scale solar energy. Utility-scale solar helps reduce US dependence on imported fossil fuels, curbs greenhouse gas emissions, and creates jobs in clean energy. It’s also a great medium-term investment strategy that offers a potential ROI of up to 200%. In this article we explore what utility-scale solar is, how it performs against traditional investments like index funds and ETFs, and how you can invest in solar energy through private funds.

What are Utility-Scale Solar Investments?

When people talk about solar energy they’re typically referring to one of two forms of solar power: utility-scale solar energy and residential rooftop solar  projects. Installing rooftop solar for a single-family home is very different from utility-scale solar farms, which are designed to power entire communities.

Utility-scale solar refers to large-scale solar power plants that generate massive amounts of electricity. Unlike rooftop solar, utility-scale solar projects have a much larger impact on mitigating climate change and supporting energy independence. In 2022, rooftop solar provided only 1.5% of America’s electricity. Compare this to utility-scale solar, which accounted for 8% of the nation’s total electricity capacity last year. The scope of utility-scale solar makes it better positioned to meet America’s energy needs while mitigating climate change than smaller-scale, single-home projects like rooftop solar. This is part of what makes utility-scale solar such a lucrative—and worthy—investment.

The experience of investing in utility-scale solar is also radically different from buying stock in a solar rooftop company. Accredited investors can support the development of utility-scale solar projects through private funds, like Shasta’s Summit Power Fund. Private funds for utility-scale solar offer a high projected ROI compared to stocks in rooftop solar companies. Just compare Shasta’s projected ROI to Sunrun, the largest residential solar installer in the U.S. for half of the last decade. Despite Sunrun’s success, stocks in their company have proven rather volatile. The Summit Power Fund, on the other hand, projects that investors can see a potential return of up to 200% on their investment.

The Summit Power Fund is an investment fund that exists to eliminate coal and power the world with clean, renewable energy using solar. As a Summit Power investor, you can support utility-scale solar projects through land acquisition, engineering, design, and permitting.

Shasta Power is a renewable energy company that supports the development of utility-scale solar projects via private funds. Shasta Power has closed over $200,000,000 million in commercial and utility solar projects, and investors in Shasta’s Summit Power Fund could enjoy up to 200% rate of return (based on historical performance). 

Not only is the Summit Power Fund a smart investment, it’s also a meaningful investment. Statistically, every $50,000 invested in utility-scale solar through Shasta keeps about 150 barrels of oil in the ground and powers roughly ten homes.

Solar Funds vs. Stocks—See Which Investment Has Historically Performed Better

ETFs are great for diversification and long-term growth but don’t typically yield the same ROI as utility-scale solar. The S&P 500 has averaged about a 10% return each year over the long term.

Another disadvantage to ETFs and index funds is that your money is so diversified that you don’t have much of a stake in the individual companies and projects you’re investing in. Those companies, by and large, aren’t typically cause-based. By investing in utility-scale solar through private funds, you enjoy a historically higher ROI and can be satisfied that your investment will have a significant impact on the future health of our planet.

Despite significant periodic growth over the last five years, publicly traded solar stocks have also seen some deep valleys. From the start of 2023, Enphase, an industry leading firm in residential solar production, saw shares plummet from $264.96 on December 30, 2022 to $127.66 today. Similarly, Sunrun has seen a gradual decline from a trading high of $96.50 per share in early 2021 to just $13.68 when this article was published. 

However, it’s important to note that all investments carry the risk of loss, and that the statistics about the ROI of private solar funds shown here are based on fiscal projections.

Growing Demand For Utility-Scale Solar

The demand for renewable energy is growing. Solar’s promise of energy independence and climate change mitigation has garnered government support. This has helped pass initiatives that incentivize the continued growth of utility-scale solar, making it not only a responsible investment but a savvy investment as well. 

Not only do renewables help mitigate the long-term effects of climate change, they also reduce our dependence on foreign imported fossil fuels. Just look at how recent geopolitical crises have affected the price of oil to get a sense of the dangers foreign energy dependence! As the world’s second-largest exporter of crude oil, Russia’s invasion of Ukraine sent shocks through the world energy market. US gas prices shot up 42% in the months following Russia’s invasion of Ukraine, reaching a record high of $5.02 a gallon. Global oil prices jumped 4% immediately after Hamas’s initial attack on Israel late last year. 

The advantages of solar energy have increased its share of the United State’s total electrical generation from just 0.1% in 2010 to over 6% today. This is in part thanks to policy support for utility-scale solar energy on the federal, state, and local levels. Policies and standards, like the ITC and RPSs, have been enacted to speed up the rate of development of utility-scale solar projects. 

Investment Tax Credit (ITC) allows utility-scale solar developers to deduct up to 30% of installation costs from their federal taxes, which is a major incentive for large-scale solar projects.  

38 US states and the District of Columbia have adopted Renewable Portfolio Standards (RPS), which require a specified percentage of electricity utilities to come from renewable resources. RPSs place a high demand on renewable energy sources, like solar. California, which has almost 40 million residents and an economy larger than both India and the UK, is committed to 100% clean energy by 2045. To date, 15 states, Washington, D.C., Puerto Rico, and Guam have set 100% clean or renewable portfolio requirements with deadlines ranging from 2030 to 2050.

Furthermore, recent advancements in solar technology make the production of solar panels more cost-effective than ever. In fact, the cost of manufacturing PV panels has fallen from $5 per watt in 2000 to less than $0.25 in 2023, according to the Conference Board.

Environmental and Social Impact

The positive environmental impacts of using solar energy instead of fossil fuels are well understood. Solar energy has an exponentially smaller carbon footprint than fossil fuels, preventing the buildup of harmful greenhouse gasses that contribute to climate change. Less obvious are the social impacts of utility-scale solar projects, like more domestic jobs in clean energy, cleaner air and water, and lower rates of pollution-related illnesses.

Investing in a cleaner tomorrow can change the world today. When you invest in sustainability through utility-scale solar funds, you create jobs in solar energy. Unlike the coal and fossil fuel industries, solar industry jobs don’t expose workers to as many environmental hazards, like toxic chemicals and poor-quality air. Utility-scale also decreases the number of pollutants present in our air and water supply, which supports public health.

Not only do utility-scale solar farms reduce our dependence on imported fossil fuels, they also create more domestic jobs.

Conclusion

Utility-scale solar funds are a great investment opportunity for accredited investors interested in diversifying their portfolio while supporting the development of renewable energy. Utility-scale solar is a more scalable solution to the US’s energy needs than rooftop solar—or even more traditional forms of energy, like imported fossil fuels. The performance of private funds compared to EFTs, index funds, and publicly traded solar stocks offers a higher projected ROI, and public policy programs (like the ITC and RSPs) have further accelerated the development of utility-scale solar.

Funds like Shasta Power’s Summit Power Fund are paving the way toward a brighter, cleaner future. Since 2011, we’ve had six successful funds and closed over two hundred million dollars in utility and commercial projects. Our success is thanks in part to savvy investors like yourself, who understand solar energy’s potential to change the world.

Grow your wealth by investing in a brighter future!

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Shasta Power

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