Optimizing Financial Returns on Energy Investments
Our investor partners work closely with New Energy Equity to ensure that an investment in solar energy produces optimal returns and results. Through our knowledge of financial modeling and renewable energy expertise, the return on investment is high, low risk, and predictable. New Energy Equity has worked with a dozen financing partners over the last six years to complete financing on 100% of the projects entered under contract.
Steady Returns from a Sustainable Energy Investment
Solar project investments provide predictable and steady returns, but require accurate modeling and industry knowledge to make sure all aspects of the investment are taken into consideration and fully understood prior to beginning the project. The development team at New Energy Equity has the professional experience and intimate industry knowledge to put together comprehensive business cases for each project and provide an investment prospectus based on a variety of factors that enter into the energy investment lifecycle. New Energy Equity provides our partners an investment package and forecast of the project’s financial return that is comprehensive, accurate, and easy to understand.
The ROI of Investing in Solar Energy
Renewable energy investors achieve their returns on investment through a combination of project solar revenues, rebates, and tax incentives. Our partners collect revenue from the host energy user based on the user’s commitment to purchase electricity from the solar installation for 15-30 years. This is a predictable revenue stream backed by an organization that New Energy Equity screens for excellent, bankable credit. The investor also receives the Investment Tax Credit (ITC) worth 30% of the value of their investment in the project which can be used to offset U.S. Federal tax liabilities. MACRS accelerated depreciation over the first 5 years of service can also be used to reduce Federal and State income taxes. Finally, State-based incentives in the form of Performance Tax Credits (PTC), grants, rebates, or Solar Renewable Energy Credits (SRECs) make up additional revenue streams.
When all the financial benefits are added together for our investor and project company, our financial partners can expect a competitive return on their investment over the 15-30 year term of the investment. The numerous ways that investors gain valuable benefits from solar development projects include:
- Competitive return
- Low and managed risk
- Limited operational involvement
- Recurring and predictable cash flow