At the end of the day, it all comes down to ROI. If this had a good ROI, it probably already attracted enough investors without needing to create such a investment product. If not, then I might as well buy SP500.
While I don't think this investment is effective either way, there is probably a market for people that want a more visible way to track their impact.
https://www.usinflationcalculator.com/inflation/electricity-...
Joking aside, why would that be? They're creating an investment vehicle that pays 7% return subject to various conditions and taking some cut for themselves. You can't just assume that all investments are already fully sold on the market and no one can create new ones.
The important thing we hope to capture is the experience... it'll feel much more like owning a consumer product than an investment.
1. How are you defining risk in this context and comparing it to the stock market? There is no track record shown in the FAQs.
2. What is the "somewhat" in "somewhat predictable"? The 7.3% estimated returns seem to come out of thin air with no backing calculations to them.
3. How are you returning capital to investors? This is nowhere in the FAQ. Do I actually get what I put in back or am I buying an interest rate depending on the life of the panels hoping to break even at some point?
4. If there is no secondary market, how do I re-coup any of my initial investment? Am I locked in for life? Circles back to question 3, is the principal returned after a fixed amount of time?
5. Do I receive a K-1 and operating losses due to panel depreciation?
Similarities include physical depreciation, need for maintenance, insurance, importance of location, vacancy risk (vs bad weather), tenant risk (vs power customer), how each case is special snowflake, etc.
It's also a good asset for people who are OK with lower returns if the investment slows climate change, or for people who want to make a bet that solar will be in higher demand in the future.
But this does apply to most investments. Most investments that are looking for retail investors are scams. If they delivered ROIs better than or as good as the S&P they'd attract large sophisticated investors.
Matt Levine writes about this sometimes. One possible justification to invest in ESG is that you believe that investments that are relatively good for the environment (or whatever) will beat the stock market. Another justification is that it makes the cost of raising funds cheaper for companies that are good for the environment and more expensive for companies that are worse for the environment.
According to the latter theory, if it's working, you should earn less than the S&P 500. If you're not earning less, you haven't lowered the cost of raising funds.
(On the other hand, if a company is advertising a niche investment to small investors, they probably have a cost of customer acquisition that's going to be cutting even more into investment returns? Isn't their cost of raising funds going to be pretty high?)