Shedding Light On The Benefits Of Investing In Solar Energy

Across the globe, an estimated 1.2 billion people have no access to electricity while some one billion who have it struggle with unreliable sources. Many families in countries like Tanzania use kerosene oil lamps, which are expensive to use and toxic to both humans and the atmosphere. Some companies, like ARTI Energy, want to provide solar energy products to East African countries. However, these companies often lack the funds needed to efficiently distribute their products. Interest rates are high, and the number of loans for a small, solar company like ARTI are low, forcing them to rely on donors and grants.

But before you start grabbing tissues, meet the hero shedding some light on this dark tale: SunFunder, a solar finance business that emerged in San Francisco and Tanzania in 2012. Their mission? Convincing people to invest money into a “solar note,” or a collection of cash later divided and given to small solar companies like ARTI. What would investors get out of it – besides the satisfaction of helping bring solar power to people in need? According to SunFunder, its loan default rate rests at a cool 1%, interest payments can hike as high as 9% and, since the investments are spread out over a diverse range of companies and countries, investments are low-risk.

However, not everyone agrees with SunFunder. Although the financial company aims to gather a $50 million solar note by the end of the year, some investors have expressed skepticism. “It stands to be high impact, but could also be high risk,” says renewable investment expert Philip Bazin. “It’s important to look at which countries the money is going to – are they suffering from political instability or civil unrest? A lot rests on the quality of the vetting completed by SunFunder. This needs to be as transparent as possible.”

SunFunder does provide this information to investors, performing thorough research on their solar companies before allowing people to invest in them. Additionally, SunFunder monitors these solar businesses throughout the period of the loan to create as much transparency and trust between investors as possible. Is investing in SunFunder a bright idea for people like you? Time will have to tell…just like time will have to tell if electricity becomes affordable and safe for the thousands of international families in need.