Solar Showcase / Promotion

“Up-and-running solar plants are better than traditional real estate”

Where is the market for operating solar installations heading? Long-term investors, such as pension funds, value above all the security of investing in these installations, which solar expert Paul Grunow has long referred to as being “better than traditional real estate”. Engineering experts, meanwhile, tend to purchase existing solar plants with design errors, before carrying out improvements and reselling them at a profit. Support for this growing market is being provided by MilktheSun.com, the largest open marketplace for photovoltaic installations, PV project rights and unused roofs and ground areas.

The trading of existing solar installations has become an established market for investors. Existing plants with an overall capacity of more than 78 GWp have been built in Europe alone, the majority of which have energy supply agreements lasting 20 to 25 years. This presents an enormous potential for buying and selling installations on the secondary market.

“In Europe, pouring money into new PV plants is becoming less and less worthwhile. In light of this, we believe that in the future more investors will seek ways of putting their money into existing PV plants with energy supply agreements, as these offer a stable source of income,” explains Josefin Berg, a senior analyst at the consultancy company IHS Technology. According to Berg, the most promising markets for trading solar installations that are already in operation are Germany, Italy and France, as here investors can find a large number of installed plants and relatively stable feed-in tariffs. The opportunities offered in these countries are reflected in the projects that are for sale on Milk the Sun, the leading open online marketplace for PV plants, as 29 percent of the projects listed are located in Germany and 19 percent in Italy. What’s more, Josefin Berg expects that the rapid construction of large solar parks throughout 2013 and 2014 will lead to the secondary market also becoming more attractive in Great Britain.

 

Win-win situation for buyers and sellers

Dr. Paul Grunow, Managing Director of the Photovoltaik-Institut Berlin and co-founder of QCells, believes that trading solar plants that are already up and running is a win-win situation for buyers and sellers, stating that “the buyer acquires a risk-free project that has already been found to work in practice, while the seller raises new equity.” According to Grunow, solar plants are “better and more lucrative than traditional real estate.” In contrast to the traditional real estate market, which requires investors to find tenants, investors in PV power plants do not have to work to find a source of income. “The sun shines no matter what,” says Grunow, adding that further advantages are that banks are now happy to finance solar projects, the technology used in such installations has been tried and tested and feed-in tariffs are guaranteed by the government. Those in the finance industry have also confirmed these favorable market circumstances.

The purchase of existing plants is particularly attractive to buyers involved in long-term forms of investment, such as pension funds and other institutional investors, as they are usually seeking sustainable and reliable sources of income. At the same time, Josefin Berg from IHS Technology expects intermediate investors to become increasingly involved in the market. These investors buy existing plants that are underperforming and upgrade them before reselling them at a profit. This occurs particularly in markets where tight deadlines for completing the construction of plants have caused their quality to suffer. According to Berg, the secondary market is attractive to sellers because it allows capital for new investments to be generated rapidly.

A detailed technical due diligence process must be undertaken before purchasing a “second-hand” solar plant in order to accurately determine its condition. Paul Grunow from the Photovoltaik-Institut Berlin finds it surprising that many investors still focus too heavily on the list of questions that the banks providing the finance ask potential buyers, when banks actually consider it more important that their loans can be paid back. Instead, investors must examine their plants far more thoroughly, with their own interests in mind, to ensure that they also make a return on their investment.

MilktheSun.com provides buyers and sellers of solar plants that are already in operation with a variety of services, including the contact details of surveyors, tradespeople, specialist lawyers and tax advisors, who can help them make a safe investment. This allows the online marketplace to provide its clients with the support needed to conduct transactions as securely and efficiently as possible. By presenting the solar plants that are for sale in a transparent, standardized way, MilktheSun.com also makes it easier for users to search for, buy and sell photovoltaic installations, PV project rights and unused roofs and ground areas. Existing projects can quickly be sorted according to their capacity and location, enabling investors to look only at projects they are interested in.

About Milk the Sun

The online marketplace MilktheSun.com also provides a range of services related to photovoltaics to make it as easy as possible for buyers and sellers to conduct their transactions
The online marketplace MilktheSun.com also provides a range of services related to photovoltaics to make it as easy as possible for buyers and sellers to conduct their transactions

Milk the Sun operates the world’s largest open online marketplace for photovoltaic installations. Project developers and operators can post solar installations for sale on the portal, and investors can find interesting projects boasting an environmentally friendly capital investment.

In collaboration with specialized partners, Milk the Sun features services related to the entire life cycle of a photovoltaic installation. The company also presents large solar investments via the closed marketplace UtilityScaleNetwork.

Further information: www.milkthesun.com