Potential Investors Renewable Energy is on the Rise

Bridging the Gap

An investment in renewable energy is a good environmental move—and it can also be a great investment for an individual. The way that we Americans have  our energy system organized, however, returns from renewable energy systems would take a long time just based upon the value of the energy production from the energy source.

As you might imagine, individuals are not interested in investing in renewable energy sources which will pay the costs back over a 20-25 year period. The government knows this, and recognizes the “hidden costs” associated with the combustion of fossil fuels or long-term liability and risk of nuclear power.  Because the government is interested in encouraging the installation and use of renewable energy sources they offer incentives for the installation of this generation—both in the form of tax incentives and through favorable utility rates for grid-tied systems.

Because the returns for renewable energy for corporations are greater than the returns that individuals can experience, we have formed Pickering Energy Solutions as a vehicle for the investment and ownership of renewable energy systems. Pickering Energy Solutions investors will reap the higher levels of incentives offered to corporations by passing these savings back to the individual investors through their LLC ownership. Potential investors purchase shares of the LLC, which the LLC then invests in solar photovoltaic energy systems and other renewable energy sources. The tax benefits of these investments passes through to the individual investors while the proceeds from the renewable generation adds long-term value to the corporate shares and provides seed money for the investment in additional systems. Using these tax incentives, as well as the income from the renewable energy sources, 5-6 year paybacks and 10 year IRR of 9-12% are anticipated.

Because of the way that these tax incentives pass the savings back to the individual LLC owner, much of the initial ROI is experienced through the 30% tax credits and the accelerated depreciation that can be taken on the assets. As a matter of fact, since 2012, there is a 50% bonus deprecation. This allows for the return of almost 50% of the investment in avoided taxes in the first year. These investments make sense for investors who have higher marginal tax rates and have “tax capacity” (owe income taxes that can be avoided through these incentives). You should consult your accountant to make sure that this investment is appropriate for you.

Obviously we cannot predict the future, and because these incentives are related to tax rates and avoidance, the future benefits from LLC ownership may vary from the present. There is potential for these incentives to be lowered or increased, based upon the perceived value of renewable energy sources in the future and other political campaigns. We do have two thing going for us, however—first; historically energy costs tend to increase over time, and secondly; it is the right thing to do.

Thank you for considering investing in Pickering Energy Solutions and we look forward to answering additional questions that you might have.






Additional Information / Studies:

Consumers Continue to Gain Interest in Solar Energy

SOURCE: Applied Materials

One in four American consumers would consider installing solar panels on their home. 

The biggest motivational factors include:

  • A Recommendation from a Friend or Family Member 40%

  • Potential for Income By Selling to Power Company 47%

  • Simply Having More Information 49%

  • Increase in Home Value 54%

  • Government Incentives to Offset Install Costs 65%