RetireJapan

Anyone know about investing in solar panel farms in Japan? Supposedly the return on investment isn't too bad.
This is one of the only sites I could find in English - www.tsp-cg[dot]com/english/solarenergy

There are several listed on the Tokyo Stock Exchange:
https://www.jpx.co.jp/english/equities/ ... index.html

You purchase in the same way as if they were regular companies.

Pretty random wanting to specifically invest in solar farms. Can't see the rationale unless you have some particular advantage such as an expertise in the field.

The yields might not be so attractive if you factor in the residual value of the farm. I can't see it being worth a lot once your 20 year feed in tariff contract is up. If it's no longer financially viable it may even cost money to get rid of. Also, you'd be tying up a fair bit of cash in a single illiquid asset.

I live in the countryside and I hate the way people around here are cutting down trees to make way for these things. Doesn't seem very green to me...

Solarman wrote: ↑Sun May 02, 2021 10:15 am Anyone know about investing in solar panel farms in Japan? Supposedly the return on investment isn't too bad.
This is one of the only sites I could find in English - *redacted*
Wondering if it's legit.

Sorry if I'm being a constant cynic every time a new user posts a link as their first post, but this smells like search rating spam to me.

Good point! I disabled the link but people can still find the site if they want. Apologies to OP if it was benign

Solarman wrote: ↑Sun May 02, 2021 10:15 am Anyone know about investing in solar panel farms in Japan? Supposedly the return on investment isn't too bad.
This is one of the only sites I could find in English - www.tsp-cg[dot]com/english/solarenergy

Let's say you purchase a small plot of rural land in sunny Aichi Prefecture for 1,000,000 yen. You then install a 6.05kW Panasonic solar system for 1,654,000 yen (inclusive of all installation costs). You have now invested a total of 2,654,000 yen into your 20 year solar farm project.

According to this industry web site, which breaks down the yearly cash flow in great detail, you would recoup the cost of the panels at year 13. By year 20, your total income would be 383,000 yen after deducting maintenance costs of 300,000 yen. However, this is misleading since you need to pay property tax on the land as well. At 1.1% that would be 220,000 yen over 20 years, leaving you with a net profit of 163,000 yen.

We can assume this is a highly unrealistic scenario under pristine climatic conditions and stable, non-depreciating land and solar asset values. In reality, the solar panels will depreciate by about 90% over the 20 years leaving you with 1,000,000 + (0.1 x 1,654,000) + 163,000 = 1,328,400 on your initial investment of 2,654,000 yen for a net loss of 1,325,600 yen.

Now imagine that you had invested the same amount of money in an S&P500 index fund in your tax advantaged retirement account over the same period. After adjusting for inflation, the S&P500 has averaged an annual rate of return of 5.9% over the past 20 years. Applying that to our initial investment of 2,654,000 yen and letting it grow untouched in the retirement account would leave us with 8,352,569 yen after 20 years.

That's just a quick back of the envelope estimate. Feel free to correct me if I'm wrong!

Teflon wrote: ↑Mon May 10, 2021 11:15 pm

Teflon wrote: ↑Mon May 10, 2021 11:15 pm

Solarman wrote: ↑Sun May 02, 2021 10:15 am Anyone know about investing in solar panel farms in Japan? Supposedly the return on investment isn't too bad.
This is one of the only sites I could find in English - www.tsp-cg[dot]com/english/solarenergy

That's just a quick back of the envelope estimate. Feel free to correct me if I'm wrong!

Wow! Thank you for clearing that up.

So my guess is that solar farms are the rural equivalent to parking lots in central Tokyo? Something to pay the tax?

Perhaps these companies get kickbacks and tax-breaks to make it more worthwhile?

so my girlfriend was working for a company that was converting farm land to solar farm land.

Teflon's explanation is missing the part where you check with city hall before buying that you can actually convert the land type from farmland to something suitable to energy production. It's really time consuming, you need face to face meetings with city hall employees, and a lot of forms to fill, etc... It took 1-3 months and quite a bit of work between finding a candidate land and actually buying/starting solar plant construction.