The Future of Dividends in Solar Generation

October 13, 2021

Renewables are the future, in more ways than one. While there has been some reluctance in adopting green energy, growing trends in business and investment show the benefits of shifting to renewables. As renewable energy becomes more widespread and accessible, it's increasingly clear that green energy will be more profitable in the long-term than traditional fossil fuel energy sources.

This is in large part due to national and international pressures on lending agencies. According to Bloomberg, natural gas may soon follow coal in the line of stranded assets as banks like Citigroup, Inc. and JPMorgan Chase & Co. are tightening restrictions on fossil fuel financing.

Many still investing in fossil fuels may find themselves dealing with billions of dollars in assets that they can't sell off. In the meantime, renewable energies like solar power will be increasingly lucrative. Below, we've put together a quick discussion on the future of dividends in solar generation, and what shareholders and investors can anticipate.

More Data Equals More Accurate Projections

While it's clear that fossil fuels are fast outliving their profitability, the perceived lack of data on solar energy is causing some investors to drag their feet. These institutions are looking for assurance that investments in solar generation will pay off, and they may feel that current dividend forecasting doesn't offer that assurance.

We've written previously about how that can change quickly. The Woodseer hybrid approach makes use of the most recent developments in technology and data modeling for accurate dividend forecasting. And as this approach gains ground, investors will have a better idea of projected solar generation dividends in the near future.

Near-Future Solar Applications

Solar energy has been around for decades, and has only recently begun to gain more ground thanks to technological advancements. Previous concerns on solar power such as energy storage and manufacturing costs have now been addressed through more efficient and affordable equipment.

Hoymiles overview on solar energy notes that near-future solar applications are quickly coming within reach. Solar energy's impact on transport, future-proofing energy costs, and energy resilience and independence are likely to be far-reaching. Much of solar is still focused on big changes coming in the next decade or so, and as those changes become realities the shift will affect dividends and our estimates of them.

Construction of New Solar Farms

Building an energy plant is a careful decision that can cost  billions in funding. Investors are quickly seeing the downsides of fossil fuel plants, and the growing likelihood of these plants being made redundant. Unlike traditional fuel sources, however, the energy from solar power generation and other green energy sources is seemingly limitless.

Financial News Media reports that the solar farm industry is expected to see significant growth for the foreseeable future. Active companies in the global market like NextEra Energy, First Solar, and Green Stream Holdings are seeing quick returns. Plus, with government incentives, solar farm construction could yield even better returns in the near future.

More Expert Analysis

Forecasted dividends and potential ROI in the solar power generation industry is likely to boom as the market expands. Not only will there be more favourable data and projections available to investors, but as adoption of renewable energy grows and more governments incentivise green businesses, investors are likely to see huge growth potential even for minor players.

Forbes sat down with experts in ESG and the renewable sector to discuss trends in the near to long term future. The experts highlighted how renewable energy is a stable business sector immune to business-slowing shocks, such as the global pandemic. The brief overview of the industry seems to be overwhelmingly positive, which can only bode well for investments both now and in the future.

Researched and written for Woodseer Global by Alice Carden