Meet a Solar Developer Bringing Institutional-Quality Dealflow to Retail Investors
And how you can earn 10% to 15% dividend yields paid out each month.
In 2017, Mike Silvestrini sold his business – one of the largest commercial and industrial (C&I) solar firms in the U.S. – and began looking for his next big idea.
The business, Greenskies Renewable Energy LLC, had managed a renewable portfolio of more than 400 projects worth over $500 million. These projects focused on so-called distributed generation – a middle market between massive utility-scale projects and residential rooftop solar. Instead of consumers, they sold to businesses like Amazon and Walmart.
After selling the business, he and his family hopped on a plane to travel the world. Over the next few months, he met with solar developers and businesses across Latin America, Europe, Africa, and parts of the world.
And that’s when it clicked: He had his next big idea.
Energea is Born 🚀
Mike found that many solar projects around the world had compelling economics, but no access to capital to build them.
The solution: Energea.
Energea is a marketplace connecting these global middle-market solar opportunities offering 13%, 14%, and 15% yields to retail investors willing to pool their money together to fund smaller projects.
Since launching, the platform has grown to over $100 million in assets under management with a 12.18% realized return (IRR).
Here’s how it works in their own words:
The result was a win-win-win-win-win (yes, that’s five wins):
Solar developers get much-needed access to capital;
Retail investors get access to institutional-quality deals;
Mike leverages his experience as an intermediary;
Customers benefit from cheaper energy costs;
And, these efforts help move forward climate goals.
It’s also a familiar playbook: Energea invests in distributed generation opportunities, where they don’t compete with utility-scale operators but where there’s more opportunity than residential solar installations. They have the team, the connections, and the experience to make it happen.
Built for Income 💵
Here’s where it really gets interesting…
Energea builds solar projects backed by 20-year, inflation-adjusted power purchase agreements (PPAs) with governments and large businesses.
This means investors have access to a remarkably predictable income stream that’s more akin to a bond than flaky dividend stocks. But unlike a bond, you can generate equity-like double-digit returns.
It’s also relatively safe income…
Energea’s customers are large businesses paying their utility bills – not exactly an optional expense. Moreover, these customers are actually saving money on their utility bills by using the platform. So, there’s no incentive to switch back to the old way of doing things.
The company also carries insurance against almost any adverse outcome. For example, one of its early hydroelectric plants experienced mechanical problems leading to a period without energy output. But it’s business interruption insurance and general liability insurance made investors whole.
In fact, the biggest risk turns out to be currency fluctuations. For instance, Brazil customers pay their electric bills in Brazilian Reals. However, these facts can help investors hedge against adverse U.S. dollar movements.
Investing in Good 🌎
It’s hard to beat Energea if you’re interested in climate-friendly investments.
Unlike ESG stocks and funds, every dollar you invest in Energea goes toward the construction of renewable energy assets that offset carbon emissions. You’re not simply buying someone else’s share of stock, which does little more than reduce a company’s cost of capital by some marginal percentage point.
Energea offers additionality that’s hard to find in other impact investments. Each dollar you invest has an impact that wouldn’t be possible if you didn’t invest. In other words, these are projects that wouldn’t be happening without investors like you, meaning you’re making more of a difference.
Our Test Drive 🔥
We began test driving Energea back in February 2022. Since then, we’ve earned a blended 11.7% internal rate of return with monthly dividend payments and regular progress reports from the team.
We’ve been an Energea investor for a little over a year.
Note: The 11.7% is a combination of equity appreciation and dividends. Investments in projects under construction result in equity appreciation to compensate early investors for the lack of dividends. The share price then decreases over time as dividends increase to equalize everyone’s share.
We invested equally in all three of the company’s portfolios:
Solar USA – 6-8% IRR
Solar Brazil – 14-16% IRR
Solar South Africa – 10-12% IRR
Every month, the company sends an update on all of its projects to shareholders. And every quarter, the company holds a webinar where Mike and other team members provide an update on each project. These events have been helpful for answering questions and learning about progress.
As the dividend portion of the IRR increases, we plan to ramp up our investments to build current income.
We only found two drawbacks to consider:
Liquidity – Energea shares don’t trade on an exchange, making them harder to sell. While the company will try to sell shares you’ve held for at least three years if you ask, they have yet to launch a secondary market that could provide more liquidity.
Mobile App – Energea doesn’t offer a mobile app at the time of writing. While it’s not essential, it’s nice to have to check in on your account and see updates in real-time. However, they’re working on one that should launch soon.
Overall, we love Energea for its unique combination of high returns, global impact, and steady income. It’s a combination that’s hard to beat with other investments and helps make the world a better place.
Invest with a Bonus 💰
Energea lets any U.S. citizen invest with as little as $100.
The company also offers an Individual Retirement Account (IRA) option if you’d like to use Energea for retirement savings.
By using our referral code (button below), you can receive a $50 bonus and make a 50%+ return on your initial investment. That’s not bad for testing the waters on one of our favorite private yield investments!