Do you Invest? Would you like to beat Buffet?

 

This is part of our series called “Solar Insiders” where we are interviewing the team that founded Golden Bear Solar – Northern California’s leading SmartSolar™ providers.

Show me the money — Founder Rod Wilson on Solar ROI

“…the average homeowner could make a return on investment topping 20% and give them the ability to generate their own power…”

This is sort of statement that Rod can make with confidence and people in Los Gatos will stop to listen in.  (Sort of like that old EF Hutton commercial.) Rod is no stranger in this neighborhood – talking with him at Loma Coffeehouse and Brewery, you’re frequently interrupted by people saying hi, asking him about the family and other business.  And for those that know him, Rod’s business is making money. He’s been helping people invest in property development via his various ventures for the 2 past decade.

Golden Bear Solar Rod WIlson
Rod and the many Wilsons you may run into in and around Los Gatos.

But, in addition to looking for a good return, Rod has always looked for ways to have additional impact – and when the idea of developing a new kind of solar company – a SmartSolar company – was proposed, he did not hesitate.

“It’s obvious that we have to do whatever we can to protect the environment in the ways that we have available, and since we live in California, which has both sunshine and a high energy cost; this a way to make a difference while still making a really great investment.  The other founders are very experienced in the solar industry (see profiles of other founders Mike Thompson and Rob Davy.) so I knew that we could provide something that was special and still a great value – and an investment I can 100% recommend.”

Benchmarks for Investing

We asked Rod about his investment philosophy, and investors he admired.  Immediately he brought up the Oracle of Omaha – the legendary Warren Buffett, whose value invest strategy has made him a billionaire many times over, as well as a proponent for value — looking for something that is a great deal and then sticking with it through the years to get the full time value of money.  “Buffett rarely makes a wrong move; and his track record of over 20% year over year growth is something anyone would aspire to. But when I look at people here in California, who have put their money into generating their own energy, I see returns consistently higher than that. Solar is an amazing investment.”

Since 1965, the S&P 500 has delivered annualized returns averaging 9.7%, including dividends. During the same time period, Berkshire Hathaway has generated an average stock price gain of 20.8% per year, or slightly more than double that of the S&P 500.

(Editor’s note: I took a look at a few other financial gurus — Clark Howard consistently recommends investing in solar, Dave Ramsey says yes — caveat, pay cash!, and Suze Orman, aka Oprah’s finance go-to also includes solar in her go green – save money checklist.)

A Powerful Hedge

“In every family, there is an investment philosophy.  Some families like to max out their 401K; some put every additional penny into kids college accounts, some like to keep cash in checking, or invest in hedges like gold.  But for my money, pun intended, the best hedge is getting solar for your home, if you haven’t. You can protect yourself from the rising rates of power.”

Wilson continued “Fact – you’re going to continue to use power.  Fact – PG&E rates will increase. They’ve confirmed it will be at least 3.7% annually, but they recently got permission from the CA legislature that they can increase rates or add surcharges to cover wildfire legal claims.  If you accept that rates will rise at least 5% in the upcoming years, the average homeowner could make a return in their own ability to create power that is topping 20%.  And, add in the fact that you are then doing your part to support cleaner energy for our environment.”

And… in addition to the financial hedge – in getting a battery as part of your solar installation; you also have a hedge against power outages – wouldn’t it be nice to have your refrigerator, some lighting and WiFi router available if the power should go out? Many of our customers are seeing the value of energy security that is provided by having an Energy Storage System.

The Smart Money Says

Wilson concluded by urging everyone to make financial planning a conversation* that families have annually — looking at what changes they may want to make and what their options are.  Setting and forgetting with index funds may be easy, but isn’t it better to have a thoughtful strategy that maximizes both your money and your ideals? (And gets you Buffet-like returns?

*One other note – as part of being a SmartSolar company, we believe in working with an educated consumer.  To that end, we’ve put together (and busted) a few of the common myths that prevent people from taking the steps that could enable moving down this path.