1) You could lose some or all of your money

Projects can fail for various reasons, including commercial, technical, legal, or operational issues. If cash doesn’t come in, distributions may stop, and capital can be lost. Many risk warnings lead with this because it’s the core truth.

2) Illiquidity: You may not be able to sell or exit when you want

Private assets aren’t like public shares. You may be locked in for years, and there may be no active secondary market. Even when transfers are possible, they can be slow, restricted, and priced at a discount.

3) You may be “unlikely to be protected” if something goes wrong

Depending on the structure and who is involved, protections can be limited. For example, no FSCS/FOS protection schemes

4) Returns are not guaranteed (and forecasts can be wrong)

Any projected cash flows can be thrown off by real-world performance, pricing changes, downtime, or cost spikes. Forecasts are assumptions, not promises, and third-party inputs can be incomplete or wrong.

5) Project delivery risk: it can take longer and cost more than expected

Clean-energy projects live and die on execution: permits, land/leases, interconnection, shipping delays, construction quality, commissioning, and safety. Delays usually mean higher costs and later (or lower) distributions.

6) Operational risk: performance, downtime, and maintenance are everything

Even good equipment fails. Underperformance, heat, dust, humidity, inverter issues, battery degradation, spare-parts constraints, and poor maintenance can reduce output and revenue. This is why “operator reality” matters more than glossy pitch decks.

7) Off-taker risk: the customer may not pay (or may pay late)

Revenue depends on the people buying the power. If the off-taker’s finances weaken, if billing/collections fail, or if disputes arise, cash flows suffer. Contract enforceability and practical collection processes matter as much as the PPA headline.

8) Country, legal, and regulatory risk

Rules can change. Taxes can change. Permitting and licensing regimes can shift. Enforcement can be slower. And local market conditions can affect everything from imports to grid policy.

9) Currency and repatriation risk

If revenues are earned in local currency but obligations (or investor expectations) are in hard currency, FX moves can erase returns. In some markets, convertibility and cross-border transfers can be delayed or restricted.

10) Valuation and information limits

In private markets, valuation is not continuously “discovered” like a stock price. It can be model-based and dependent on assumptions. Also, evidence used for factual statements often comes from the underlying business and may not be independently audited – meaning errors (or worse) can slip through.

11) Structural risk: dilution, fees, and waterfall mechanics

Ownership can be diluted if new shares are issued or if different share classes exist. Fees, reserves, covenants, senior claims, and distribution “waterfalls” can materially change what investors actually receive. Many mainstream risk warnings explicitly flag dilution and lack of dividends.

12) Fraud and impersonation risk

High-interest themes attract scammers. Treat unsolicited messages, “special access,” or promises of guaranteed returns as a red flag. Use only official channels and verify identities before sharing information or sending money.

 

 

January 2026
Updated