Everyday investors are seeking refuge from a volatile stock market and the declining purchasing power of the dollar. Inflation is hoovering stubbornly north of 8 percent despite a rapid succession of interest rate hikes. It can be difficult for investors to find refuge in the stock market and other traditionally ‘safe’ venues.
In the past several years, a number of finance startups like Legends Solar have emerged. Many offer exposure to investments that were once difficult or impossible for individual investors to access. With Legends Solar, everyone has the opportunity to own a piece of renewable energy infrastructure. Before, investors could not purchase individual panels on commercial solar facilities.
‘Alternative’ assets like solar panels have traits that can be valuable in an inflationary environment. For example, they may have asset prices that are uncorrelated to fluctuations in stock market valuations or they could yield cash returns inverse to the falling value of the dollar.
Energy infrastructure investments like commercial solar panels on Legends Solar can be a strong hedge against inflation. High energy prices can drive inflation, so owning assets that generate and sell electricity can bring financial stability. With solar investments, high fuel costs won’t erode your profits – in fact, your investment could benefit from selling electricity into a stronger market for electricity.
Inflation often results in higher labor costs, which can reduce profits from electricity generation infrastructure. But solar panels do not require much physical maintenance once they are installed. In fact, some solar facilities can go years without any significant maintenance requirements, meaning that increases in labor costs won’t hurt your return.
Because solar requires little maintenance or management to perform well, owning solar on Legends will be less like owning a risky stock market investment and more like owning a low-risk bond. There may be changes in the earnings of your investment based on the weather and other factors, but these are comparatively uncorrelated to broader market dynamics.
Owning panels on Legends Solar is like owning residential rooftop solar panels on your home - you’ll purchase a real asset that earns financial rewards as it generates and sells electricity. When you invest with Legends Solar, you are entitled to dividends produced as your solar panels sell electricity to a customer who is contracted to purchase your electricity at a negotiated rate.
While the specifics of online solar investments on Legends Solar might vary from one solar facility to the next, they will feature investment traits that could entice investors looking to hedge against inflation risks.