Fractional Real Assets & Farmland

Fractional Energy Projects

Solar, battery storage, agrivoltaics fractional investment.

Investment Overview

Fractional energy projects enable retail investors to own shares of solar installations, battery storage, and renewable energy infrastructure generating income from 20-25 year power purchase agreements (PPAs). Investment platforms: Wunder Markets (community solar, $1K minimums), Energea (solar projects, $5K), YieldCo stocks (NextEra Energy Partners, Brookfield Renewable). Returns: 6-9% annual yields from PPA payments, backed by investment-grade utilities. IRA tax credits (30% ITC) enhance project economics. Market size: $50B community solar market, $30B battery storage investment annually.

Market Context & Trends

Community solar exploded post-IRA (Inflation Reduction Act, 2022) with $369B in clean energy incentives. Investment Tax Credit (30% of project cost) and Production Tax Credit (2.6¢/kWh for 10 years) transformed project economics. Battery storage economics improved: 4-hour duration systems earn 8-12% IRRs from capacity payments and energy arbitrage. Key development: Corporate PPAs (Amazon, Google, Microsoft) now 60% of renewable energy purchases, providing stable 15-25 year revenue contracts. Challenges: Grid interconnection queues 3-5 years, delaying project completion and investor returns.

How to Invest in Fractional Energy Projects

Wunder Markets: Community solar fractional ownership, $1K-$5K minimums, 5-8% target yields

Energea: Solar project investments, $5K minimums, 6-9% IRR target, 20-year PPA backing

Mosaic Solar Loans: Loan notes backed by residential solar loans, 4-6% yields, $1K minimum

NextEra Energy Partners (NEP): YieldCo owning solar/wind/storage, 6-7% dividend, NYSE-listed

Clearway Energy (CWEN): YieldCo with 7GW renewables portfolio, 5-6% dividend, NYSE-listed

Key Platforms & Access Points

Wunder Markets: Community solar marketplace, 100+ projects, Amazon/Walmart offtakers

Energea: Solar project crowdfunding, institutional-quality due diligence, $100M+ deployed

Mosaic: Residential solar financing, securitized loan notes for investors, 4-6% yields

YieldCo ETFs: Clean energy dividend stocks (NEP, BEP, CWEN), 5-7% yields, liquid

Generate Capital: Sustainable infrastructure investor, $10B+ AUM, institutional minimums ($10M+)

Key Investment Metrics

PPA pricing: Fixed vs. inflation-indexed; $40-$60/MWh typical for utility-scale solar

Offtaker credit quality: Investment-grade utility (AEP, Duke) preferred vs. merchant exposure

IRA tax credit capture: 30% ITC or 2.6¢/kWh PTC; verify project eligibility and bonus credits

Project IRR: 8-12% for battery storage, 6-9% for solar, 7-10% for wind (all pre-tax)

Degradation rate: Solar panels degrade 0.5% annually; impacts long-term production forecasts

Risk Considerations

Understanding these risks is critical before investing in fractional energy projects.

Merchant price risk: If PPA expires, exposure to wholesale power prices (volatile $20-$100/MWh)
Interconnection delays: Grid queues 3-5 years; project delays reduce IRRs by 200-400bps
Technology risk: Battery storage early-stage; degradation rates uncertain beyond 10 years
Regulatory changes: IRA repeal or rollback would devastate project economics (30% ITC = project viability)
Illiquidity: Wunder/Energea investments lock capital 15-25 years; no secondary market

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