Across the nation, thousands of homeowners are taking advantage of programs from SolarCity (NASDAQ:SCTY), SunPower (NASDAQ:SPWR), and other solar specialists to install solar systems. Many of those companies offer financing, and they're turning around and securitizing those financing arrangements into bonds to sell to investors. Does it make sense for you to buy those bonds?
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, talks about solar bonds and how they work. He points out that SolarCity recently said it would offer solar bonds directly to investors, and already, alternative services like Mosaic allow investors to get exposure to solar deals. Dan explains that the risk-reward analysis depends on the scope of the bond involved, with those including more projects having more diversification than those that hinge on a single project's success. Sticking to reputable companies makes the most sense in the early stages of solar financing, but if the rates turn out to compensate you for the risk involved, solar bonds might end up being a worthwhile investment.
The No. 1 way to lose your wealth without ever even knowing it
You've fought hard to build wealth for you and your family. Yet one all-too-common pitfall could completely derail your dreams before you even know it. That's why a company The Economist hails as "an ethical oasis" has isolated five simple questions you must answer to ensure that your financial future is really secure.
Can you answer yes to all five of these eye-opening questions? Click here to find out -- before it's too late!
Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.