I’ve taken some time to write a detailed and unbiased review on The Sun Exchange (thesunexchange.com). I have been using the platform for the past 6 months. In this time, I have invested in 3 different projects totaling $400 (Rs.31,000). So far, I own 92 solar cells that should be generating me passive income. My review covers all aspects, how to buy/invest, withdraw money, pros and cons of theSunExchange, their business model, stability, UX and customer support.
Complete and detailed Sun Exchange Review
First let’s get some key questions answered
The Sun Exchange is a platform that allows individuals to buy solar cells as investments. These cells are installed in schools, supermarkets etc. As they generate electricity, the money earned is given to the investors as interest. This way, the environment wins with clean renewable energy and investors get to make passive income.
The solar cells you bought start generating electricity post successful installation. This in turn is bought by the school or super market who got the cells installed. The money earned is distributed as profits to investors monthly for 20 years.
Headquarters of Sun Exchange is located in Cape Town, South Africa. Their solar installation projects too are spread across South Africa in cities such as Durban, Belfast, Cape Town,
The minimum money you can invest is the cost of 1 solar cell. Depending on the project a cell can cost between 67 ZAR to 101 ZAR (roughly between Rs.270 to Rs.400 or $3.6 to $5.8).
The money is paid into your thesunexchange account as Bitcoins. You can withdraw at once or use the money to buy more solar cells. If you are a resident of South Africa and have a ZAR account, you can receive this money directly into your bank account.
The money is paid on a monthly basis on the day when the project went live. Eg: If you have 2 projects, 1 went live on 10th and another on 20th. You receive payment for the 1st project every 10th of the month and 2nd project every 20th of the month
The IRR of your investments on SunExchange is roughly 11% to 13% depending upon the project. This is for a period of 20 years. When you do the math, the Return on Investment works out to approximately 6% your investments.
My Experience and Investments so far
I came across the Sun Exchange when one of my colleagues and friend on FIRE journey in Norway mentioned it as a possible alternate investment. He had purchased a bunch of cells and asked me to try it out.
So far, I have bought a total of 92 solar cells, costing $400 (about INR 31,000 including exchange fees). Of the 92, only one cell, the very first one I bought sometime back in November’19 has started to generate any revenue. Even this was only from Feb’20. I have 6 cells in another project that has completed and will start generating revenue post the COVID-19 crisis. The last project where I bought 65 cells is yet to start installation.
Update: I got my second payment, so I now have 0.0000204 Bitcoins. That is worth Rs.10.82.
How to go about investing in Sun Exchange
You need to create an account first over a thesunexchange.com. Once done, perform basic KYC with one proof and also confirm your email address.
That’s it. Now you can select a project and start investing. Note: The projects are not always available and usually gets sold out soon. I have attached a snapshot of the details of one of the projects that are open at the moment.
The steps once you click on Buy Solar Cells:
- Accumulation currency. This is IMPORTANT. Select BTC (bitcoins) if you do not have a ZAR Bank Account. For all non South African residents it has to be BTC.
- Your wallet: If you want to use money earned in the past mention it here
- Payment Method: If you have a ZAR account you can do Bank transfer. If not, if you have Bitcoins pay with them. For all others, you can use a debit card or credit card. Note: There will be a currency conversion fee applied. Eg: If you pay in INR, about 2% fee is applied by your bank to convert INR to ZAR.
- That is it your job is over! Once your payment is confirmed your cells will show up on your dashboard.
- Once the project is fully funded, installation starts.
- You start getting money once the installation is complete and the solar plant is turned on and starts generating electricity. This usually takes about 3 months.
How to withdraw money earned as interest
Your earnings are credited as bitcoins into your Sun Exchange Account. You can withdraw them at once into any Bitcoin wallet you have. Money is sent out every Wednesday. There is a Rs.100 fee for withdrawals for normal withdrawals. If you want the money within 24 hours, then the fee is Rs.186
Risks, Bitcoins and Stability factor
There are two major risks to consider when investing your money in The Sun Exchange:
Payout happens as Bitcoins
They are a South African company and they wish to woo global investors. Hence Bitcoin is the best way and has the least red-tapes to get money and pay out money. However this comes with great unstability. Bitcoins, unlike normal currencies are unregulated. So if the prices falls drastically, no government or Central Bank is going to step in to save it. To put things into perspective, Bitcoin was around $12,000 around the time I bought my first solar cell 5 months back. As of now, a Bitcoin is around $6,800.
Sunexchange earns money for the electricity generated from the solar plants in ZAR. They then pay the earning equivalent in Bit coins to you. So, a fall in Bitcoin price is good for you, for you will be earning more bitcoins for the energy your cells generate. But it is also bad for you, as the accumulated Bitcoins you own are less valuable now.
Stability of the Solar cells and projects
The other risk worth considering is, will the project collapse or will Sun Exchange go bankrupt. They assure us that each project is ring-fenced and is a Special Purpose Vehicle (SPV). This is a way to ensure that the collapse of one project does not hurt others or the company. Also, each project is insured as well according to them. So damages to the solar panels installed are covered under the insurance.
Earnings and ROI
Each cell in this project costs 97 ZAR ($5.15 or Rs.393). The IRR for each cell is 11.56%. They claim that each cell will earn 295.14 ZAR in the 20 years you have bought them for. You get about 3 times the money you invested over a period of 20 years.
let’s assume you invest in just one cell for Rs.393. Over 20 years, you will earn a total of Rs.1193.4. So, you finally net Rs.1193.4. As the cell is useless after 20 years, this means, your profit over 20 years is Rs.800, plus the principal of Rs.393. Totally, this works out to an annual return on your investment of 5.7%.
Pros & Cons of theSunExchange
The Sun Exchange Review will not be complete without a detailed list of Pros and Cons of putting your money here
Pros and why you should Invest
- Support a Green initiative. Sun Exchange has won numerous awards for it’s contributions to the environment and renewable energy.
- Get paid for saving the environment
- Decent interest rate of about 5.7% for your investment
- You earn in Bitcoins. This is one of the best ways to earn passive income in the form of Bitcoins
- Seems to be stable thus far and great community of supporters around the globe
- Steady stream of income over the next 20 years
Cons and what you should watch out for
- Return of 5.7% per year is not great for investors from most countries
- The Sun Exchange website is not that great. Still needs a lot of work. Reports on payouts, investments etc are not available
- Their customer support is good, but expect some wait time as they are under staffed
- The time taken for investment to start showing returns is high. Each project takes anywhere between 3-4 months to go live
- You are paid in Bitcoins, so returns can be diminished due to fluctuations in Bitcoin price
Is it worth it for Indian investors
Now, a return of 5.7% may be great for someone from Japan or other countries where the general interest rate is 2% or less. But for someone from India like me, I earn 6.5% interest just by opening a fixed deposit in the bank, and this is a lot safer, there is no exchange rates and currency conversions to consider.
India has recently opened it’s doors to Bitcoins. However the currency conversion fees you pay and withdrawal fees may make it nonviable for an Indian investor.
I invested in Sun exchange to test the waters and also since I like experimenting. Another reason was I wanted a steady stream of earnings in the form of Bitcoins. But is this something I would advice my Dad or Uncle to invest in? No! The return on investment to someone in India is not enough and the Bitcoin fluctuations make it too risky to have this as a serious investment in your portfolio.
If you are interested to buy some solar cells, I have a good offer for you! Use the following link to get 1 solar cell free when you buy 10 cells or more on your first purchase. You get 10% off! https://hubs.ly/H0pSp5T0