Are Solar Bonds Right For Me?
A lot of people have been asking me about Solar Bonds.
They ask questions like, ‘Does it make sense for me to invest right now?’ and ‘What are the risks involved?’
Here are a few things to consider:
WHAT ARE SOLAR BONDS?
Solar Bonds are a smart way to invest in local solar projects. Investors are lending money to SolarShare, a nonprofit co-operative that owns solar projects in Mississauga, Brampton, Vaughan, and all across Ontario. SolarShare has long-term contracts with the Ontario government to get paid for the clean energy their systems produce. Whenever the sun shines in Ontario, SolarShare projects make money that helps them pay interest to bond holders and build more projects.
WHO SHOULD BUY SOLAR BONDS?
Solar Bonds offer a 5% or 6% annual return, which is great in this low-interest rate economy. Solar Bonds are intended for people of all ages looking to get higher returns from fixed-income investments. Keep in mind that SolarShare offers a fixed rate that won’t change if interest rates rise or fall.
Solar Bonds last for at least 5 years, and there’s no way to sell them part-way through. It’s fine for patient investors saving for retirement or future expenses, but not suitable for people saving to buy a home in the next few years.
The most important lesson of investing is that you shouldn’t put all of your eggs in one basket. Solar Bonds are for investors who want to diversify their portfolio. Because they are uncorrelated to the stock market, even if the market crashes, SolarShare bonds keep earning a solid return.
Solar Bonds are a fantastic option for people who want to invest in a better future. Climate change is a serious risk to our economy, and your money is directly supporting a growing solution.
Written by Tim Nash — Financial Planner & SolarShare Investor
Find out more about Tim Nash at sustainableeconomist.com