Solar energy is cost-effective, and there can be different ways of profiting from it. As a homeowner, you can install solar panels and earn money by net metering, where you can sell the excess electricity generated back to the utility company. Solar farms where you, the landowner, can install panels can be much more profitable, or you can just lease the land to a utility company. You can also invest in the solar energy sector to profit from solar energy. Otherwise, the solar power business itself has a promising future where you can work as a manufacturer or explore different job options working in this sector.
Solar panels have increasingly gained popularity in recent years. Besides being good for the environment and earning money from it, people are exploring various benefits attached to it.
People are jumping at the opportunity to make money selling back excess power to the grid.
A decade ago, solar was amongst the most expensive source of generating clean energy, but the prices have only declined over the years. People are taking advantage of this fact.
By installing solar panels, they are trying to save money, increase their home value, and earn profit by selling excess energy generated.
Solar energy has been gaining popularity in the last decade, and it does decrease the electricity bill for homeowners, but earning dollars from it requires careful planning.
Several factors need to be considered before making such a decision which requires a significant initial investment.
Solar energy for homeowners
Cost-saving, sustainable, renewable, and considered a clean energy source are the most significant selling point of switching to solar energy.
With fallen prices for solar power as much as $0.06 per KWH globally, down from $0.38 just a decade earlier, people are locking in this energy at a price that will remain constant.
In contrast, fossil price will only increase exponentially.
Solar energy can be harnessed in two ways, including photovoltaic (PV) energy and thermal solar.
PV energy can be obtained using flat solar panels fixed to a structure’s roof or arrayed across open spaces.
Thermal solar uses a series of mirrors to focus the sun’s energy on a single point to turn water into steam, turning a turbine.
The panels on the rooftop are a more popular way of harnessing solar power.
Cost-effectiveness of solar power
Several factors have brought down the cost of installing and maintaining solar panels, gaining homeowners’ interest to use it for their personal use and then further selling the excess to make some money.
Due to increased competition, more solar panel production has resulted in a sharp decline in installation costs.
With the help of government subsidies, and growing environmental concerns, the prices have decreased further.
As of 2017, utility-scale PV solar power costs have dropped to $0.06 per kWh.
For residential purposes, the prices have dropped to $0.16 and $0.11 per kWh attracting more people to install it for their own use in the U.S.
Can you make money using solar power?
Homeowners can take advantage of the fact that solar panels will significantly reduce their electric bills, lower their carbon footprint, and increase their home value.
People are hesitant about the initial higher solar panel installation and maintenance costs, so few have adapted to using solar panels yet.
Another reason people are hesitant is that the area they live in might not get the appropriate sunlight needed to generate solar power.
It’s difficult to exclusively live on solar power energy, and homeowners often have to rely on other sources to generate electricity, especially once it gets dark.
It can cost around $16,000 to $35,000 plus the PV panels’ installation cost.
While this is one aspect of estimation, there’re other things you need to consider before installing solar panels.
- How much energy will it produce?
- What’s your energy consumption?
- How much do you pay for the same amount of monthly electricity otherwise? Does solar power save you significant money?
- Can the system pay for itself concerning the initial money investment put into it?
If your solar panels can pay for themselves under five years of installation, it’s a great idea to think about how you can make dollars from generating this energy.
Making money using solar power
The government does provide tax subsidies or grants now to encourage the use of solar panels and installation.
This helps reduce the installation prices, and tax credits can also reduce annual tax bills.
The power purchase agreement is when the solar energy developer owns the solar installation and wants to sell the generated electricity to the power purchaser, known as the off-taker.
This is mainly for commercial and industrial solar arrays.
Those with smaller solar installations can take advantage of the Public Utility Regulatory Policies Act 1978.
Suppose your requirements and conditions meet the PURPA’s requirements for a Qualified Facility (QF).
In that case, you can interconnect your solar array to a utility-controlled grid to distribute your energy to utility companies.
If your installation is less than 20 MW, utility-controlled companies must meet a mandatory purchase obligation to pay for your renewable electricity at avoided cost.
This avoided cost is what the utility company would have paid to purchase or generate that electricity if your QF did not exist.
- You can either lease out your land to a solar power company that will install and maintain solar panels on your land by getting into a contract with you. They will pay the annual profits based on the terms and conditions mentioned in the agreement for your solar farm.
- You can also buy and install the solar panels yourself as a landowner. The initial cost would be huge, but you can get tax subsidies, and the profits would be good, too, better than leasing out your solar farm to a company.
Net metering is one way to make money by using solar power. The excess solar electricity produced that the owner can’t use can be sold back to the grid.
The local utility company will put a meter on your solar installation.
It’s to know when you’re using solar energy and when you are powering the company with electricity.
When it spins forward, you’re using the electricity, and when it’s backward, you’re powering your company with electricity.
When you generate more electricity than you can use, the utility company puts a net metering credit on the monthly bill.
You’ll receive dollars for the energy you’ve provided to the company.
It greatly depends on your state and whether the state has passed net metering laws.
If you’re a homeowner with solar panels, you should refer to the DSIRE database and contact your local utilities to find more specific information.
Other ways to make money using solar power
Solar energy is the future, and there’s a lot of scope for this business to expand.
With an increased demand for solar panels, there’s also increased production. Getting into this business includes earning good money.
There’s scope in scientific research, engineering, manufacturing, plant development, plant construction, plant operations, installation, and maintenance.
If you’re interested in the B2B business, you can start manufacturing solar panels. A considerable investment is required with some stable customers to run your business.
Another profitable way to make money using solar panels is to invest in the solar energy sector through the Invesco Solar ETF (TAN).
Solar energy being the future, is met by increased demand and naturally increased production by the companies.
EFT’s goal is to track the MAC Global Solar Energy Index. It includes companies that produce the equipment used by solar panel producers, solar installers, and companies specializing in solar cell manufacturing.
The fund has a return of -15.59% (on a year-to-date basis) and a 41.10% return over three years as of Feb. 19, 2022.
You should consider a solar company such as Daqo, JinkoSolar, and Vivint Sola as an investor.
What are the cons to solar power?
The benefits of using solar power are always highlighted but come with some cons or downsides one needs to know before using it.
Some common known difficulties include high initial investment, replacing parts every few years, and working when receiving enough sunlight.
But solar power panels manufacturing includes using various minerals extracted from the earth, and this mining can affect the local ecosystems just like with any other mining.
These panels also have a limited lifetime, and once it ends, they turn into e-waste.
How do I know if investing in solar energy would benefit me?
Having enough initial investment to see through the installation is the main point. Some people can handle money matters, but your location is as important as the money invested in solar panels.
Your home’s location will decide how much sunlight you get daily.
The more sunlight, the more solar energy will be produced. Your rooftop is equally essential to have the maximum available solar energy.
How can I power my home with solar energy?
– The first step is knowing your electricity consumption and how many dollars solar energy can save you.
– Get to know if your location is optimum for producing enough solar power you need. Also, know if there’re any approval restrictions from your HOA.
– Get the installation done from trusted references and get proof of license from them.
– Search for incentives and financing provided by the government. Understand your options and what’s best based on your property and needs.
Solar energy has a promising and bright future because of its many advantages, such as lowering your utility bill and having cons like high initial investment, and only working when there’s plenty of sunlight.
Looking to make profits from this renewable energy can get solar panels installed and sell excess energy to utility companies or invest in solar company stocks.
There’re other promising ways to get into the business of manufacturing or working for solar energy.
While there are different ways of making money from solar power, one needs to consider several factors before thinking of ways to make this renewable source of energy profitable.