With the threat of climate change increasing over the years, we are at a precipice where it is important to make sustainable choices for our and the coming generations’ better future.
In India after 2014, the government has been increasing its focus on renewable energy sources to help combat the effects of climate change. One of these sources is solar energy.
While each of us wants to invest in solar energy for our homes and do our part in creating a more sustainable future, it may not be possible for all due to the considerably high costs.
You may be wondering, “How to Make a solar investment and be more sustainable?”
In this article, we will show you a different approach that you can use to invest in solar projects and help the world move towards a better future while at the same time, it benefits your pocket.
Let’s start with the basics.
What is Solar Energy?
In simple words, solar energy is a sustainable substitute for energy generated from fossil fuels. When fossil fuels are used in excess to generate electricity they give rise to greenhouse gas(CO2). Greenhouse gases cause the earth’s temperature to rise above normal levels and affect the climate adversely.
An hour and a half hour of sunlight that strikes the earth’s surface is enough to help with the world’s energy consumption for about a year. This sunlight is converted into thermal or electrical energy by photovoltaic panels (PV) or by using mirrors that concentrate solar radiation. Energy derived from this can be used to generate electricity for both domestic and industrial use.
Advantages of Making a Solar Investment
There are many reasons for you to shift to using solar energy instead of using electricity derived from fossil fuels that create a negative impact on the climate. A few of the reasons to plan a solar investment are as follows.
- Renewable source of energy with no carbon emission
Solar energy, generated from sunlight is an inextinguishable energy source that does not deplete with use. Solar energy is a clean source of energy that does not generate any carbon emission that leads to the greenhouse gas effect.
This makes solar energy a super eco-friendly energy source and a better alternative to fossil fuels.
- Less utility bill
While the first-time cost of investing in solar panels may be expensive, its operating cost over time is pretty less compared to normal energy sources.
Solar panels have a long lifespan and do not require much maintenance.
Investing in solar panels reduces the cost of relying on grid power and paying hefty monthly bills. A solar investment will prove to be useful in the long run.
Investing in solar energy is getting more affordable by the day. With government rebates and schemes to promote the population to invest in solar energy, it is getting cheaper to make a solar investment than before.
- No reliance on grid power
With solar power, you can generate your own electricity without relying on grid power. Power cuts and fluctuations will no longer be a bother once you make a solar investment.
- Technology development
Development in the solar sector is ongoing and constantly advancing. New innovations can potentially increase the effectiveness of solar panels to generate electricity over the coming years.
How Can I Invest In Solar Energy Stocks?
Investing in solar energy will not only help us transition into a cleaner and more sustainable future but also potentially help us make a profit from it.
Here are some steps to follow for investing in solar energy stocks.
Step 1: Do your research well.
Before investing in anything it is imperative to conduct proper research to study and understand the market sector trends. You need to look for good sources such as government policies, industry reports, and financial news to research properly and make an educated decision.
You need to learn about solar companies in the industry and the industry trends to understand if it is the right sector for you to invest in.
Step 2: Choose solar energy companies.
It is advisable to choose solar energy companies that have a good market position, a diverse solar portfolio, and a good track record of success. It is also important to select companies that have a good vision and mission that you can envision succeeding in the future.
It is important to see if the company has technological advancements and a good R&D team to gauge how it will be performing in the future. Check for solar companies with good private and government backing as well.
You can choose SustVest to invest in asset-based projects. This is an alternative to investing in the listed stocks. Here, with us, you can invest in ongoing or upcoming solar projects and make a profit on your investments that can be as low as 5000 rupees. With every person who pays the solar bill at your project location, a fraction goes into your pockets.
Step 3: Analyze the financial statements.
Before investing in any solar company it is important to know the financial history of the company. You need to be well informed of the company’s revenue growth, debt levels, and profitability to avoid making a bad investment.
Step 4:Choose your stockbroker.
To invest in the stock market you need to open a brokerage account(demat account) online or work with a professional who can manage your investment portfolio for a fee.
Most people nowadays prefer to use online platforms to create an account and trade as it is more time and cost-efficient.
Step 5: Monitor your investment portfolio.
Once you have done your research and selected the best solar companies to invest in, you can go ahead and add those stocks to your portfolio. You can enjoy the yields of your investment in the future.
You need to monitor the companies in your portfolio and need to stay up-to-date with the new market trends to know the new solar companies to invest in and which to discard from your portfolio.
Learn more about How To Invest In Solar Renewable Energy In India And Make A Profit here.
10 Reasons Why You Consider Making a Solar Investment
While you may not be able to invest in getting solar energy for your household, you can always invest in solar energy stocks and profit from those. Here are a few reasons to invest in solar energy.
- Industry Growth
According to recent research, the Cumulative Installed Solar Energy Capacity has increased from 6.76 GW in 2016 to 54 GW in 2022. It is expanding at a compound annual growth rate of around 41.39%. Decentralized Renewable Energy(DRE) along with the incentives provided by the government has given a great efficiency boost to the solar energy market in India.
The Central Electricity Authority has estimated India’s power requirements to grow to 817 GW by 2030. In the union budget 2023, the government of India has allocated Rs 5331.5 crore for the solar power sector, which is 53.65% higher than last year’s allocation.
Globally India ranks 5th in solar power capacity which makes India a huge growth opportunity market in terms of solar energy. India plans to meet 50% of its electricity needs from renewable sources which makes now an amazing time to invest in solar energy stocks due to the growth perspective.
- Performance Of The Stock
The long terms goal of the government is to continue to keep investing in renewable resources along with the attractive incentives provided by them for citizens who invest in solar products. Their plan to combat climate change by reducing carbon emissions in India to zero by 2070 will promote a lot more growth in the solar sector in the coming years.
In recent times, solar equities have been performing really well in the market.
- Diversification In Portfolio
It is advisable to diversify your portfolio so that when one sector is not performing well in the market, another’s growth will help cover up for it. This is a smart way to combat market volatility.
The solar sector is a promising sector to invest in with a lot of scope for growth in the future. Investing in solar energy stocks now will help offset any risk that you may be facing from your investment in other sectors such as IT, real estate, metals, etc.
- Sustainable Energy Source
Solar energy is an environmentally friendly resource, a great supply of energy, and one of the greenest energy sources.
Harnessing solar energy does not create waste or contaminate the water which is a very important factor considering the scarcity of water. Unlike electricity generated from burning fossil fuels, solar-powered energy does not cause the greenhouse effect which is harmful to the environment.
- Becoming More Affordable
India is the fifth largest solar country in the world an installed solar capacity of over 63.3 GW. With India trying to be more ‘Aatmanirbhar’, it is trying to reduce the cost of import in the solar sector. This is why over the last few years solar energy is becoming more and more affordable.
- Excellent Government Support
India has a vast potential of harnessing solar energy to generate electricity as most states in India receive sunshine for over 300 days a year. With our vast lands and good manpower India has a huge growth potential.
The Indian government is constantly coming up with schemes and incentives to materialize on this potential and shift the masses towards solar. In September 2022, the Indian government approved the Performance Linked Initiative (PLI) scheme for high-efficiency solar PV panels.
This is just the tip of the iceberg of what the government is doing to promote solar energy consumption in the country.
- Innovating And Improving Technology
The solar energy sector is still in its developing stage where we have still not utilized its benefits to the fullest. There is a lot of potential for new technology and innovation to better harness solar power to the fullest.
With the promise of a better future, we are yet to see a lot of new innovations and technology in the solar sector. With private companies and the government coming up with new technology and inventions, now is the best time to make a solar investment to reap the benefits of this growth in the future.
- High Returns And Dividends
Investing in a growing sector is the best way to guarantee high returns and dividends in the future. Solar energy is one of the best sectors to invest in with the growing need for renewable resources in the world.
With the new and attractive incentives and the development in the solar sector, we are bound to see tremendous growth and profit in this industry.
- Long-Term Potential
The battle against climate change is going to be long-term. Decades and decades of making sustainable choices will help reverse the adverse effects of climate change.
Investing in the renewable resources sector will not only benefit you by earning you profits but also help our planet combat the ill effects of our previous choices in the long run. Solar investment is an up-and-coming investment type that will help you reap benefits in the long run.
With India’s commitment to reduce its carbon emission to zero by 2070 at the COP26 summit, we will be seeing a lot of growth and investment in the renewable resource sector, which includes the solar energy sector.
- Environmental Well-Being
The best part of making a solar investment is not only the growth of the industry or the incentives. It is the feeling of being able to contribute towards a better future that makes investment in renewable resources such as solar energy attractive.
Learn more about the Financial Benefits Of Investing In Renewable Energy here.
FAQS: How to Make A Solar Investment In India
How to make a solar investment in India?
You can find solar energy companies listed on the BSE and NSE. You will need a trading account to buy and sell these stocks in the market. One can also make a solar investment by choosing the route of investing in sectoral mutual funds.
Another way to make a solar investment is by directly investing in solar projects. Here is where we at SustVest can help you out. With investments as low as Rs. 5000, you can invest in a solar project of your choice from our available solar projects and see how it helps you generate a passive income each month.
What does the future of solar energy stocks look like?
With the world pushing toward sustainable growth, the solar energy sector has a bright future. Multiple government schemes such as PM Solar Panel Yojana, Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), etc., are in place to promote the use of solar energy. The coming decades are the best time to invest in solar energy stocks.
Although it is impossible for all the masses to invest in implementing solar energy in their household, we can still make a huge difference by investing in solar energy stocks and solar energy projects.
We hope that we have answered your question, “How to make a solar investment in India?”
Apart from investing in stocks listed on the market, you can also invest in solar energy projects.
Here is what we at SustVest can help you with. We can help you make an impact for attractively low costs in asset-based investments which will be both ecologically and economically rewarding.
Reach out to us for sustainable solar investment project opportunities.
Founder of Sustvest
Hardik completed his B.Tech from BITS Pilani. Keeping the current global scenario, the growth of renewable energy in mind, and people looking for investment opportunities in mind he founded SustVest ( formerly, Solar Grid X ) in 2018. This venture led him to achieve the ‘Emerging Fintech Talent of the Year in MENA region ‘ in October 2019.