Logically, investment contains risk. An investment that claimed zero risk is either a scam or a illusion. While getting more and more people are interested in the investment of FiA for Solar PV Installations, it is necessary to highligh some risks for this "almost perfect" investment.
The aims of this post is not going to discourage you to invest in FiA for Solar PV Installations; rather to provide some potential risks for consideration so that all (potential) investors can be well-prepared for the foreseen circumstances.
1. Solar Device - Life Span, Broken, Malfunction
The very first thing we need to consider is the life span of the solar panel and other devices (such as converter). What you should do if the device is broken or malfunction?
2. Maintenance
How frequent you should to maintain the quality of the device? How much the cost involved per maintenance?
3. Inflation
With a fixed NET return of 6% annually (for example), it may only capable of maintaining the value of our money. For a period of 20 years, anything can happen. Fixed deposit rate may be raised above 6%.
4. Constant Return
The most profitable and attractive investment of stock market is to invest a growing business. When inflation increases, the revenue of a business should be increased, thus its profit and potential dividend. The "almost" constant return provided by FiA for Solar PV Installations investment appears to be a less attractive investment for me.
5. Liquidity
Well, this PV installation investment appears to be a very low liquidity investment. It can mainly due to the contract for that constant return.
Insight
Well, as usual, I do not encourage people to put all their hard earn money in a particular investment without considering both cons' and pros' of that investment.
For those portfolio that mainly occupied by high liquidity but fluctuation investment tools, FiA for Solar PV Installation investment may be a good alternative investment to diversify their investment porfolio.
Risk is not a component that causes an investment fails; but ignorant to the risk. That's all for today. More fascinating articles and sharing will be updated from time to time in Xaivier Blog. So, you are welcome to subscribe our feed, look at our sitemap or simply visit our Homepage for latest sharing.
Written by: Xaivier Chia
P/S: The above sharing is solely based on personal insight and information that believed to be reliable. Your valuable feedback are very welcome.
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