If you have decided to invest in a photovoltaic system (PV system) as a means of investing, then certainly you have a variety of reasons. In order to diversify its investment, such an investment offers a very balanced risk-return profile over a very long investment period. In addition, this investment makes a significant contribution to the success of the energy transition through the production of environmentally friendly solar power.
The question inevitably arises, why should one even part with such an investment? If you ask customers about this topic on our marketplace, the picture of the top 3 reasons why PV systems are sold quickly becomes apparent.
3 Reasons Why Our Customers Sell Their PV Systems
There are three main reasons why someone wants to sell a previous investment: a need of short-term liquidity, making a profit and benefitting from tax cuts, or simply because managing a PV plant alone demands time and nerves.
1. Short-term liquidity
The main reason to disconnect from a running PV system is by far the short-term procurement of liquidity. Over the course of the 20 years of calculated compensation, unplanned living conditions or situations may arise that make it necessary to liquidate tied assets. There are plenty of circumstances that require cash inflows: they can be business considerations, such as debt relief or expansion/replacement of investments, or personal situations such as children’s education, divorce, inheritance clashes, or just new investments.
Since there are marketplaces that can easily, safely and transparently map the trading of PV systems and ensure a balance between supply and demand, the PV system has become an easily saleable asset.
2. Profit and tax benefits
Many plant operators take advantage of the currently favourable situation of high demand with lower return expectations from investors in order to realize sales profits. The low return expectations of investors result from the high investment pressure, mostly because insufficient investment properties with a comparable risk-return profile are available on the market.
The difference between the return on the initial purchase of the PV investment and the current return expectation is currently so high that the realization of such gains may be worthwhile. The liquidity freed up by the sale is often used to invest in new PV plants, taking advantage of existing special tax effects.
3. Lack of time & operator stress
The operation of a PV system may also cost time and nerves, especially if this is not in the proximity: the system can have technical problems, the administrative burden resulting from the purchase of the PV system, the stress generated by underestimated investment, and so on. These are some of the many reasons why individual investors separate from their PV system.
If PV system operators have decided to sell their PV system, the question arises as to how they can do that.
Often the first points of contact for resale are the tax consultants, as they are consulted on the sale in most cases to tax effects, but also the family and circle of friends and, if available, the original installer. It is understandable that there is a high level of trust here, as people know each other.
However, this is often the problem, since price and contract negotiations in this context are usually difficult and thus suboptimal sales take place. Turning on traditional brokers can also be a possibility. Anyway, you should definitely look at their experience, the brokerage commissions and the brokerage contract, as very often marketing exclusivity is required, which can hinder or delay the sales process.
In order to achieve optimal sales results, the sale on specialized online marketplaces offers, as they have a great deal of expertise, a very long reach and a market-driven cost structure.
When asked why our customers use Milk the Sun as a sales channel for their PV systems, the following picture emerges:
Why Customers Rely On Our Marketplace To Sell
When asked, our customers are giving three main reasons why they use our marketplace to sell their photovoltaic system(s).
1. Stable prices by reach
The competitive pressure among the numerous pre-tested investors of our platform is enormous. Private as well as commercial investors up to family offices, companies, funds and asset managers compete for the best projects and ensure stable and market-driven prices.
The high national and international reach ensures that there are always the right investors for any type of sale, whether asset or share deal, financed or unfinanced, new construction, in operation or moving plant.
2. No costs, no exclusivity
The sale of a photovoltaic system is free for the seller. The PV system to be sold is recorded online in a few simple steps and is then visible to interested investors after approval. Access to the deciding data to contact and negotiation only get investors who have been pre-tested.
The great advantage for the seller is also that Milk the Sun does not require exclusivity for the sales of equipment from the seller, which means that other distribution channels can be used in parallel.
3. Direct advice
Milk the Sun has many years of expertise in PV system sales. Our employees use this competence to create ideal conditions for optimal sales in direct contact with the seller. Milk the Sun accompanies providers and interested parties during the entire transaction process and, if necessary, quickly and easily provides a competent partner who can support legal or technical questions, for example.
Each sale can only succeed optimally if it has been prepared professionally. A structured, well-planned sales process saves time and money. The following faults should be avoided by PV system operators when selling.
The Most Common Mistakes In PV System Sales
There are some mistakes that often come back in the process of selling a photovoltaic plant. Hereafter are three common ones, and how to avoid them.
1. Wrong documentation
The system’s documentation is the alpha and omega of sales. This includes a clear, orderly and complete documentation of the most important papers and contracts. The documentation is crucial for the initial interest, but also for the smooth running of the sales process. Incidentally, good pictures of the PV system are underestimated in this context: the visual aspect plays a major role, especially for the first impression.
Tip: Milk the Sun provides a free, clearly structured, secured online data space to its customers: the Solarganizer.
2. Wrong price expectation
As a seller, it is only logical to want to receive the highest possible prices for their own offer. In general, these are also achievable – if one realistically incorporates the goals of the buyer. Sellers should keep in mind that buyers will need to recoup their investment amount again. The investment price should therefore be calculated in such a way that a marketable return can be achieved for the buyer.
Tip: You can use our Net Worth Calculator to determine a market-oriented target price for the sale of your PV system free of charge.
3. No seniority in the land register
Only those who have the first-class easement of a photovoltaic system can sell it. This easement corresponds to the first-rate right of secured use on the roof or open space for the operation of a PV system. If the first-class easement in the land register is not available and can not be registered, then a sale is not possible or there are significant discounts.
One of the most important factors for the successful sale of a PV system is the right pricing. The solution of the conflict of interest between sellers with maximum price expectations and the investor who wants to get the highest possible return on the capital employed is usually the biggest challenge.
How To Determine The Selling Price of Your PV System
The determination of a right market value of a photovoltaic system is a prerequisite for a successful sale. The fair value arises from the discounting of future expected income and costs, taking into account borrowed capital from the date of sale until the end of the remuneration at a comparable market interest rate. The consideration of income and costs after expiry of the statutory remuneration presupposes that there is an agreement between the seller and the buyer on the values to be assessed.
The final purchase price determination is usually carried out by a buyer-side due diligence, which assesses the actual condition of the investment including expected risks. In negotiation between buyers and sellers, agreement on an appropriate discount rate also plays an important role.
In order to get a fair market value, Milk the Sun offers a free Net Worth Calculator that calculates a theoretical value of your PV system at a specific point in time.