Inspiration
I discovered this investment in the middle of 2019. I was drawn to it for a number of reasons.
- Environmental investment
- Returns quoted as IRR around 11%
- International investment available via BTC
- Monthly income for 20 years
- Income payable in BTC
- Offset my own Carbon Footprint!
The CEO is quite inspirational and engages regularly on social media to answer questions.
The blurb from the platform…
“Sun Exchange is a solar leasing platform. Through Sun Exchange, anyone, anywhere in the world, can own solar energy-producing cells and build wealth by leasing those cells to power businesses and organisations in emerging markets.
This leverages financial innovation and the power of the crowd to drive sustainable energy development and make the environmental, social and economic benefits of solar accessible and affordable for all.
As a cell owner, you offset your carbon footprint and actively participate in the global push to clean up our energy systems and combat climate change, and you get paid each month for the electricity your cells generate. A solar powered income stream!
A business or organisation in an emerging market pays nothing to have their solar plant installed. They pay only for the electricity they use, and solar energy costs less than traditional fossil fuel energy so they see their energy tariff reduced by at least 20% and sometimes up to 60%.
Sun Exchange does all the rest. We find the projects, install and maintain the solar plant and arrange all payments and earnings.”
How does it work?
The Sun Exchange sources the projects. They do all the due diligence and arrange all the contracts. They produce an information pack with all the details including the financials. The information pack is available to view when the project is launched on the platform.
When you make a decision buy cells you click the “buy solar cells now” button which takes you to the purchase page. Here you can decide the number of cells you would like to buy, the currency for payment of your monthly income (ZAR or BTC) and the currency you would like to use for purchasing (ZAR or BTC). As an international user of the platform I always use BTC to make my purchases. After completing the details you send the correct amount of BTC to the address and the cells are yours.
Once the crowd sale has completed and all the cells have been sold, contracts are signed between TheSunExchange and the business that is going to lease the cells. Installation then takes place. Installation usually takes around 6 weeks, though Covid has impacted this for many projects last year and there have been delays.
After installation is complete the solar array is commissioned and starts generating electricity. From this point onwards, you are earning money from the Sun. TheSunExchange sends you a copy of the lease agreement detailing the relationship between you the owner, the leaseholder and TheSunExchange.
At the end of every month the amount of energy generated by your cells is calculated and the lease holder pays the appropriate amount to TheSunExchange. A few days later, usually the 3rd or 4th day of the month your earnings are deposited in a wallet on the platform. You can leave it in the platform wallet or withdraw to your own account.
TheSunExchange store the member BTC in a cold wallet using a ledger Nano for security purposes. They keep a float in an account with LUNO for paying withdrawals. For this reason withdrawals to a LUNO wallet are free. This is the method I use.
How do the financials stack up?
Here is a typical project. It is one of the many schools that have installed Solar arrays with TheSunExchange.
As you can see the contract has a fixed increase in the lease rate every year, so your earnings go up, at a higher rate than inflation.
Roughly speaking your income generated will match the amount you paid for the cells at around the 10 year mark. At the 20 year mark you will have earned x3 the amount that you paid for the cells
What happens at the end of 20 years?
Well the cells still belong to you! TheSunExchange possibly will extend the lease for another 5 years, if the cells are still good. Alternatively the cells will be decommissioned and sold. This bit is all theoretical as the business is only a few years old and so this hasn’t been tested. The assumption would be that after 20 years your earnings will end and you will move on, if for any reason there is still some profit to be made then this would be an unexpected bonus!
My journey with TheSunExchange
I made my first investment in September 2019 and in fact invested in 3 projects that month. I have mostly invested in 1 project per month since then, though a few months in the early days had a couple of projects.
I currently (January 2021) have 12 live projects earning me a monthly income. I have 2 projects being installed and I have 2 investments that have not completed their crowdfunding yet.
I have spent a total of £7400 at this point.
Earnings in the first year look like this…
2 of my projects have a whole year of earnings, giving useful data.
The platform also gives you data on your energy generation and carbon savings.
Investment Strategy
This is a tricky one. As you are buying a depreciating asset, you are exchanging money now for a monthly income lasting 20 years. A bit like an annuity I suppose.
Originally I had planned to use the income to re-invest into the next project, thus reducing my costs. Ultimately the income would more than cover the cost of the next project and my investment would become self-sustaining.
I have changed tact slightly for the next year to allow me to take advantage of the current Bitcoin Bull-run. New investments are made with GBP converted to BTC. My solar income BTC is being transferred to my LUNO wallet where it is earning me interest. Not only does this increase my BTC holdings but more importantly, during the current BTC bull-run, the value of BTC is increasing rapidly which therefore increases the value of my solar income.
Link…
Use the button above to link to the website. Sign up with the link and get a free solar cell with your first purchase.
The Lazy Way 2 FIRE 