The Future of Solar Energy – Best Ways to Invest?

If we continue to burn through existing fossil fuels at the current rate, the global supply is likely to become completely depleted by 2060. With this in mind, it should come as no surprise that renewable energy is dominating the thoughts of innovators and lawmakers in the UK, with this type of technology already more commonplace than you may think.

In the third quarter of 2019, for example, the UK’s wind farms, biomass, hydro plants and solar panels had already generated more electricity than the combined output from coal, oil and gas-fired power stations.

This trend is set to continue in the future, and in this respect, solar power appears to be a viable investment opportunity in the UK. But what are the best ways to invest in this particular niche?

Understanding Solar Energy – What You Need to Know

In simple terms, solar power refers to energy in the form of light, which is produced naturally by the sun.

This light is impared in the form of visible, ultraviolet and infrared rays, the latter two of which are completely invisible to the naked eye.

As we can see, solar power is a completely natural and renewable source of energy, and one that can be successfully harnessed without damaging the environment or draining the world’s finite resources.

There are two primary types of solar power, based on the technologies that have been developed to harness it. Firstly, there’s photovoltaic solar technology, which works by directly converting sunlight into electricity using panels that are packed full of semiconductor cells.

Secondly, there’s solar thermal technology, which captures the sun’s heat directly and leverages this as a primary energy source.

This incredible heat is then converted into mechanical energy and, in turn, electricity, with this referred to commonly as concentrated solar power. 

These technologies also underpin two different types of installations that are commonplace, with the most familiar being individual systems for residential homes and smaller communities.

You may also be aware of photovoltaic or concentrated solar power plants, which typically cover hundreds of acres and operate on a vast, regional scale.

How to Invest in Solar Power

Interestingly, there are now numerous ways in which you can invest in solar power, from buying panels directly and installing them in your home to seeking out a viable energy and infrastructure portfolio

In between these two extremes there are several options, including buying individual solar company stocks.

This is an incredibly accessible investment vehicle, and one that requires you to simply purchase stocks in existing solar companies. Predictably, these assets have continued to grow at a faster rate than traditional energy stocks, with the market leading Illumina brand having seen its share price grow by more than 1000% since its IPO back in 2000. 

You can also invest in solar income funds, which require you to commit to government solar power schemes. 

Make no mistake; such initiatives are likely to increase in number once again as the demand for renewable energy soars, while the current government has already committed to producing at least 15% of its total energy through renewable means by the end of the year.

When investing in this type of fund, you’ll be remunerated for the energy produced by the solar panels that are installed and utilized, and this type of vehicle should deliver relatively stable returns in the near and medium-term.