The clean energy industry is one of the most lucrative and promising sectors in the modern world. With solar technology continuing to decrease in price, more and more people are interested in investing in green energy. The global market for solar power is expected to grow significantly in the next few years.
The cost of solar electricity has decreased by about 70% in the last 10 years. Nowadays, a solar-powered electricity system can be installed for a couple hundred dollars, and it will provide all the electricity needed for a household or business. Not surprisingly, the number of solar-powered homes and businesses will increase significantly in the coming years.
How Much Can You Profit From Solar Power?
Anyone who’s been paying attention to the recent solar market growth knows that the price of solar has decreased significantly in the last few years. In fact, the cost of solar electricity has decreased by about 70% in the last 10 years. It’s a great time to be investing in solar power, especially now that there are dozens of ways to make money from solar. You don’t necessarily need to run a solar farm to be able to make money from solar — you can simply buy a solar-powered device and sell the excess electricity to a local electricity company or retailer.
Here’s a short list of the different ways you can profit from solar:
1. Solar Roofs
A solar roof is an inexpensive and popular choice amongst home and business owners who wish to have a renewable energy source close at hand. A solar roof makes sense as part of a larger energy efficient home or business because it generates electricity which can be stored in an electric vehicle or used directly by the home or business.
While rooftop solar is common throughout North America, Australia, and many other places, Europe is leading the way when it comes to solar roofs. The reason for this is simple; energy rates are much higher in Europe than they are in other places, and so it makes economic sense to produce more electricity onsite. What’s more is that many solar roof companies offer a full warranty on their products, so if anything goes wrong, the company will fix or replace your product free of charge.
2. Solar Hotels & Apartments
A solar hotel is somewhat similar to a traditional hotel, except it uses solar energy as its primary source of power. This type of hotel requires a bit more work upfront to set up, as you need to purchase land on which to build the structure. Once complete, a solar hotel offers the distinct advantage of having clean, renewable energy available to its guests. This type of hotel can also be used to power other devices, like an alarm system or small refrigerator. If you’re looking for a cheaper yet more eco-friendly alternative to a traditional hotel, a solar hotel is the perfect fit.
Apartment buildings are the perfect place for a solar power system, as there’s usually plenty of rooftop space that can be used for generating electricity. The only difference is that an apartment building requires a bit more work to set up than a hotel, as you need to have the proper building permits and get approvals from city officials.
3. Solar-Powered Businesses & Factoring
A solar-powered business is a company that generates its own energy from solar energy and sells that energy to others. This enables them to avoid a lot of the concerns that come with using non-renewable sources of energy, like fossil fuels. The main benefits of running a solar-powered business are:
- No need to buy expensive and environmentally harmful fossil fuel sources to generate electricity
- Reduces the company’s carbon footprint
- Can raise funds for the business (either through equity investments or debt) by selling surplus energy to utility companies
- Allows the business to scale rapidly (since there’s no need to buy expensive utility machinery to generate electricity)
Note: It’s important to understand the differences between a solar-powered business and a solar company. A solar-powered business generates its own energy from solar energy and sells that energy to others. A solar company is a business that uses solar energy to provide a service—like installing solar panels or providing advice on how to save energy.
4. Solar Manufacturing & Design
If you’re looking to enter the solar market in order to make a profit, there are dozens of ways you can go about doing so. One of the simplest ways is to manufacture or design products specifically for the solar market. Solar companies like UniSolar and Sunnova make it easy for anyone to get started in the solar industry, as they provide everything needed, including the land on which to build the solar farm. This type of setup significantly reduces the overhead costs associated with running a traditional energy business.
5. Power Purchase Agreements (PPAs)
A power purchase agreement (PPA) is a type of contract between a business and an energy supplier where the business purchases electricity at a certain rate (usually cheaper than it would cost them to generate the electricity onsite) and resells it to end users. The main advantages of a PPA are:
- Reduces the company’s carbon footprint
- Allows the business to scale rapidly
- Allows the company to hedge their energy against price fluctuations
- Saves the company money each month (as they’re usually cheaper than what they would pay if they generated the electricity onsite)
- Can be a great way for a smaller business to get started in the green energy market
Note: It’s important to understand the differences between a power purchase agreement and a power contract. A power purchase agreement is when an entity (like a business or government agency) purchases electricity from an energy supplier at a certain price and time. A power contract is when one entity (typically a business) sells electricity to another entity (like a government agency or household) at a set price and time.
6. Solar Shipping & Storage
If you’re looking to enter the solar market, one of the ways to do so is by purchasing a cargo vessel and/or setting up offshore power stations. While it costs a lot to purchase a cargo vessel and outfit it for solar power, shipping containers are another matter. These can be purchased for a couple hundred dollars each, and as many as 12 can be used to build a small power plant that can generate enough electricity for a household. When shipping containers are used for this purpose, they’re known as solar containers.
It’s also possible to build large storage facilities for power generated by solar farms. When energy is stored, it can be accessed and used at any time, as opposed to energy produced by combustion (like fossil fuels or wood) where it has to be generated onsite and used immediately. This makes large-scale energy storage a lot more viable, as it enables power to be produced whenever needed and also lowers the cost associated with generation (as there’s no need to constantly purchase fuel or wood to generate electricity).
Note: It’s important to understand the differences between storing energy and generating energy. When discussing solar power and energy storage, sometimes the terms “on-site” and “off-site” are used. Off-site energy generation occurs when energy is produced at one location and brought to another (usually where it’s needed). Storing energy is when energy is produced at one location and kept at that location (like a battery).
7. Off-Peak Season Trading & Financial Incentives
If you’re keen on entering the solar market, one of the best strategies to do so is to consider off-peak season trading. This can be done by purchasing Electricity Demand Reduction Contracts (EDRCs), which are essentially long-term purchase agreements that give the buyer the right to purchase megawatts of electricity during off-peak hours. The advantages of off-peak season trading are:
- Reduces the company’s carbon footprint
- Avoids spikes and dips in electricity prices during peak times (when temperatures rise and fall, creating huge demand spikes and periods of low electricity usage)
- Allows the company to scale rapidly
- The ability to make a profit during times when electricity is cheaper
- Allows the business to hedge their energy costs
- Can be a great way to enter the market and make a profit quickly
Note: Always read the fine print before entering into any type of agreement. Make sure you’re aware of all the terms and aren’t being tricked by any type of “hidden costs” or other charges.