Reasons investors should leave oil and gas behind in favor of solar farms
Investors who would have traditionally turned to oil and gas are quickly turning to investing in large solar farm projects in the U.S., according to Innovative Solar Systems (ISS), which makes sense because of the high returns and the fact that there is no guess work as to which sites will yield a long-term energy stream and return.
The case for solar investment
Seems obvious, but some people, like our President-elect, seem to forget that unlike an oil well that goes dry over time, the sun will be supplying millions of days and hours of sunlight to solar farms that can generate power to the grid uninterrupted for forty years or longer. Where oil drilling is very speculative, designing and building solar farms is not and will always generate a high return for investors over the life of the project and this is key to many investors that want certainty in the market with little risk.
Solar farms also stabilize the grid and add a level of integrity to the grid that makes the US Grid not only more reliable, but more stable while saving energy costs nationwide.
The price decreases are nothing to sneeze at either. Take it from Innovative Solar Systems, which has been designing and building Solar Farms for almost six years now and has seen prices drop by over 50 percent on solar panels and associated equipment giving solar energy the leg up on other sources of energy.
Return for the investor
ISS paints the picture like this: Long-term investors and owners of solar farms will typically yield over 12percent returns while investors wishing to invest in the Early Stage Development of solar farms will yield anywhere from 2X to 3X returns in periods as short as 12 months.
“Solar farms have now become one of the most sought after investments in the energy market and special Renewable Energy Funds are being set up on a daily basis now to provide Millions of Dollars of Investment Capital for these short term, and long term stable investment vehicles,” the company stated.
Texas example
Innovative Solar Systems, based in Asheville, N.C., is one of the first and now largest developers of Utility Scale Solar Farm projects in the US. with over 10 GW of projects in development (approximately 200 projects ranging from 20 MW to over 200 MW).
The company’s entire Texas pipeline totals several GWs and all of the projects will be ready for construction soon. Texas users of power are really into the standard PPA offering, which is somewhere between avoided cost and retail power prices states. Large buyers of renewable energy want these large blocks of power from Innovative Solar Systems for many reasons and power price is no longer many companies primary concern.
ISS is offering PPA contracts in Texas that range in contract length from 10 to 25 years and has approximately 8 million MW/hours of power that the company is entering into long-term contracts with Texas off Takers on at this time. Many of the Texas projects will be sold to third party entities after the projects come online due to the magnitude and size of these assets and their associated IRR’s. Innovative Solar Systems is currently in negotiations on the Texas pipeline with several Oil and Gas companies, Family Offices as well as groups of Foreign Pension Funds and IPPs.
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