In 2020 I wrote a review about the Sun Exchange, the world’s first peer-to-peer solar panel micro-leasing platform which powers solar projects primarily in South Africa. Now a very similar model is available in Barbados which allows Barbadians to own solar panels within an operating solar project and thereby earn solar passive income for 25 years* (more on this later). This CloudSolar review will provide a detailed review of the platform based on my experience with it so far.
Summary:
- 3.95MW of installed capacity
- 13 projects
- 10 million kWh of generated electricity
- Over $5 million invested
- Rooftop projects, almost exclusively located on chicken pens
What is CloudSolar?
Normally when people talk about clouds and solar it is a bad combination, but not in this case. The cloud in CloudSolar is referring to the fact that it utilizes an online, cloud-based platform for the transactions. Simply put, it is an online platform which enables Barbadians to own solar panels in already installed, already operational systems and reap the economic benefits.
The very nature of this ownership model is that it maximises the democratization of the renewable energy industry in Barbados in a way that has not been done before. Traditionally, homeowners could install solar panels on their roofs and landowners could install them on their land. But that still leaves out many from the RE transition. Renters, those without suitable land, and those who may not have sufficient financial resources to pay for a full system on their roof are some of the groups who have been excluded from their share of the RE opportunity. CloudSolar creates an investment opportunity which makes owning a part of a solar project accessible to everyone.
Another key benefit is that all of the projects which are currently on the platform are already installed and operating. There is no need to wait for approvals, construction, grid capacity or energy storage in order to start earning from these projects.
In the latter part of 2023, the media was full of articles about the electrical grid being full (or almost full) and that energy storage (batteries) would be required in order for more renewable energy systems to be grid interconnected. The solar industry was at a standstill with no new projects being allowed to connect. If you were a homeowner, landowner or a RE investor you may have to wait for months, possibly years to build and connect your RE system to then begin earning a return on your investment. Not so with CloudSolar. You can still wait for the temporary roadblocks of energy storage and a PPA to be resolved while investing in already operating solar assets, today.
How Does CloudSolar Work?
- Host facilities are selected and evaluated. Applications are submitted to the relevant entities such as the Ministry of Energy, Barbados Light and Power and Government Electrical Engineering Department.
- The project is constructed and commissioned.
- Solar panels are available for purchase from the portfolio of all the active solar projects. In other words, you are not purchasing a solar panel from a specific project, it is one from within the aggregate. The cumulative monthly generated energy (kWh) for all the solar projects is recorded and then users are paid in proportion to the kW they own relative to the overall kW of the portfolio. E.g. If you owned 7.8kW out of the 3947.75kW total installed capacity, you would be paid 7.8/3947.75 = 0.1976% of that month’s generated energy sales via the FIT program.
- Your purchase enters you into a digital solar service contract where all the maintenance, insurance and costs are taken care of by the company.
- Sit back and watch the solar earnings get deposited into your bank account each month like clockwork.
Where are the projects located?
The 13 active projects are almost exclusively located on the rooftops of large chicken pens. The full list can be found on their website.
Map credit: CloudSolar Inc.
What is quite impressive about the platform is the level of transparency related to the projects. Most of the projects have live SMA Sunny Portal monitoring data available for any prospective investors to review.
What are the project sizes?
Project sizes have generally been in the 30kW – 1.28MW range. About half of the projects are less than 100kW in size. The largest project is 1.28MW which I think, as of January 2024, is the largest installed solar project in Barbados.
What is the minimum purchase?
The minimum purchase is 1 solar panel at $1,482.
What are the maximum number of solar panels I can own?
30 panels, 7.8kW which is approximately $35,000. My understanding is that this is due to local financial regulations, but if you want to purchase more, you can contact the company directly.
What is the rate of return of solar panels bought through CloudSolar?
The yearly return ranges from 8.7% – 11.03%, and it varies depending on the number of solar panels that have been purchased. If you know of anywhere else in Barbados that you can get these types of returns, let me know in the comments.
Is there a secondary market for trading solar panels?
Yes, indirectly. After a 1-year lock-out period (1 year after the solar panel has been purchased), CloudSolar can re-sell your solar panel to another client or re-purchase the solar panel at its depreciated value. Therefore, if for some reason (after 1 year) you need to exit the digital solar agreement, you can.
How to purchase solar panels on CloudSolar
- Get Started on CloudSolar. Fill in your name, email, phone number and set a password.
- Choose the number of solar panels to purchase.
- Enter your banking details.
- Review and Finish.
- You will receive a verification code and an email to say your email address has been verified.
- Your identity and bank account will be verified.
- An Accounts Representative will email to confirm sufficient funds are available in your bank account for an ACH request for the payment of the solar panels.
- Once the payment has cleared, you will receive an email notifying you that the contract is active.
Risks
This would not be a balanced CloudSolar review without highlighting the risks.
Procurement, construction and interconnection risks have all been taken care of since these projects are already operational.
Host facility risk
Due to the long useful life of solar panels, sometimes the panels outlive the host facility, either the building itself or the roof. Most of the active projects are located on poultry houses. Depending on the age of the structures, these may need to be replaced in the next 25 years or re-roofed, which may result in a loss of revenue depending on how the company manages it. Having a pool of solar assets does help to smooth out such production disturbances. Based on the roadmap for the company, there will be some large ground mounted systems in the future which will not have the same host facility risk as the existing rooftop projects.
Hurricane risk
We live in a hurricane prone area of the world. Although Barbados is blessed to be strategically located in the island chain such that statistically it is hit less frequently by hurricanes, it is still a possibility. A hurricane can hit and damage some of the solar projects. In this case, the company has insurance in place and would file a claim for the replacement of the damaged installation.
CloudSolar company risk
The above two risks are common for any other type of solar project, if you owned it on your own rooftop or via some other entity. The single biggest risk comes down to whether or not you trust CloudSolar and its management team to follow through on the solar panel purchase agreement, pay you your solar earnings monthly and maintain the solar assets for the next 25 years. Let’s jump into those details; don’t trust, verify.
- Company
The company was founded in 2016. It is owned by Montrose Holdings Limited which owns and operates many businesses in Barbados. The connection between Montrose and Chickmont Foods explains the prevalence of solar projects on chicken poultry houses. Aside from being owned by a well-known established entity, CloudSolar has partnered with Emera Caribbean Renewables for their installations and CIBC FirstCaribbean as their banking and financing partner. All of these companies are reputable and are leaders in their respective industries.
- Team
The core management team is comprised of four individuals who have solar, business and technology backgrounds.
Dominic De Freitas – Founder and CEO
Anthony De Freitas – Technology Architect
Ayub Kola – Financial Analyst
Rohan Ford – Business Development
You can Google them or look them up on LinkedIn to get a better idea of who the team is.
- Payments
See the section below about my personal experience regarding the consistency of payments.
- Solar asset management
Aside from actually driving to a few sites to verify that the installations are complete, a very important aspect is the company’s transparency about solar generation data. Some companies put the data behind a member’s wall, but here, anyone in the public can view the production data of the projects before investing any money. Rather than a hands-off association with the host facilities, CloudSolar and its parent company are closely connected with the chicken pen operations, therefore it is in their combined best interest to keep the host facility building and the solar project both operating properly. The online monitoring and the installation partnership with Emera Caribbean Renewables gives a level of comfort that the systems will be maintained for the long term.
My CloudSolar Review and Results
Since I was such a fan of the SunExchange model since 2017, every so often I would do a search for a similar solar platform in the Caribbean. It wasn’t until 2021 that I stumbled upon CloudSolar and am glad that I did. Part of the reason it took so long to find them is because the company has mainly relied on word of mouth for growth. In fact, the dearth of online reviews or feedback on the internet lead me to write this review so that more Barbadians could be made aware of this opportunity.
I signed up for the platform in 2021. The concept seemed too good to be true so I was very skeptical and cautious in the beginning. I purchased 1 solar panel in May 2021 and watched carefully to verify that the monthly payments were being deposited. In December 2021, 7 months later (that was probably a bit excessive) of consistent deposits into my bank account I was convinced and decided to purchase the remaining 19 solar panels to bring my account up to the maximum limit at that time (the limit was later increased to 30 panels).
One point to note is that the website references a 25-year agreement and by extension 25 years of solar revenue payouts. The FIT program itself is only for 20 years, by which point you would have made back your original money. It is a possibility that a new FIT rate or a similar mechanism will be put in place at the end of the 20-year FIT contract to continue for the last 5 years of the CloudSolar agreement, but personally I’m not banking on it. 20 years of revenue will be sufficient and anything beyond that is extra.
Before jumping in, I had some questions about the platform and how everything worked. The website has a very comprehensive FAQ section where I was able to find almost all of my answers. For the rest, I emailed customer service and they responded very quickly.
Okay, time to pull back the curtain and show some real results. Below are two screenshots of my dashboard. The first one is from July 2022 and the second one is from January 2024. You will notice that the return has decreased slightly from 10.26% to 9.77%, which I think is acceptable and still within the expected range.
The payments have been consistent and reliable, every single month. Here is the transaction history from June 2021 to August 2022 in PDF format showing all the transactions for the two contracts.
Since there are two contracts, there are two payments. You can see in the July 2022 screenshot graph and in the ledger that the numbers jumped up in December 2021, from about $10/month to about $200/month because this is when the 4.94kW contract was activated.
Those are the transaction records on the dashboard. This is what it looks like when the notification email comes in about the payment. The email is usually sent around the 20th of the month. In my case, because there are two contracts, there are two emails.
Finally, this is what it looks like when the payment is deposited into the bank account. Again, two payments due to two contracts.
Hopefully this review has informed you of a new opportunity to invest in renewable energy in Barbados and answered any questions you may have had and now you can decide if it makes sense for you.
My advice is to start with one solar panel and convince yourself that it really works, before potentially expanding.