Investing In Solar: Seven Ways To Make Money From Solar Farms
Considering Investing in Solar?
While our quest for a clean and green energy source is getting some positive vibes, the renewable energy industry is also open for investment. Just like any other investment, the renewable energy sector requires you to consider the investment horizon and risk tolerance. In fact, you should start with the least risky investments that offer a maximum time horizon.
The economic growth of renewable energy has been outstanding. As time is passing, more and more individuals are investing in this field to get their share. For instance, investing in the solar power sector is a great idea to multiply your money without any serious risk.
Moreover, companies involved in the production of green energy are getting relief from governments such as solar tax credit in the U.S. Also, the prices of solar panels have continually been decreasing and making solar a much more viable option compared to alternatives.
However, there is a significant issue that precludes investors from making their move. This relates to the fact that investors dont have an idea of where to start. There are mixed opinions about how to invest in solar. Some prefer to invest in solar companies, while others want to invest in solar funds.
Apart from these, you can think about some other ways to invest in solar.
Selling To The Utility
When a solar-generating company “sells” electricity back to the grid, it is in essence receiving credits, rather than cash. These credits are different from SRECs. Solar technology company Solar World cites a savings of over $223,000 in utility bills over 25 years for a 77.8 kilowatt commercial system in North Carolina. Selling power is particularly advantageous for time-of-use payment structures where utility rates are highest during the day.
Because PV systems produce the most power during the day, producers are able to sell high at that time, extracting additional gains. When the solar installation produces less, at night, it is buying power from the grid at lower rates.
How Much Do You Pay For Electricity
Your current electricity bill is the largest factor in determining how much youll save by installing solar. You pay your utility company for every kilowatt-hour of electricity you use, and your rate varies significantly depending on where you live. In some parts of the country, like the South, you can pay under 12 cents per kWh in others, like the Northeast, you could pay 20 cents or more. When you go solar, you reduce or eliminate your monthly electricity bill, so the amount you pay for electricity substantially impacts your savings.
If youre not sure where to start in determining your solar savings, try using our Solar Calculator. Our calculator incorporates local electricity rate data to provide you with a customized estimate of what you can expect to save, and just how quickly your investment will pay off.
Don’t Miss: Should I Buy Solar Panels For My House
Invest With Wunder Capital
Wunder Capital is a reliable and safe way of investing in solar. It assists accredited investors while investing in solar projects. This type of investment not only helps to make money but also allows us to save our environment. A recent article published in Forbes has revealed that the solar industry offers more jobs in the energy sector as compared to the production of oil, gas, and coal. Hence, this industry appears to be more promising when it comes to investing.
Being a proper investment platform, Wunder Capital serves as a bridge between investors and solar energy projects. It creates solar investment funds by taking on board a few small-sized solar companies. Although Wunder Capital is a financial technology company, it manages almost every aspect of the investment process.
This helps the accredited investors to invest in solar projects and include these projects within their portfolios. The investment funds also offer good returns. The companies associated with Wunder Capital are supplying solar energy to the commercial entities and properties. According to the representatives of Wunder, this is the area, which is still lagging as compared to utility and residential segments.
Wunder Capital 5 Fund that was launched in October 2017, offers the following perks.
This type of investment is only available to accredited investors . If you fall under this criterion, you can go for investing in solar power companies through Wunder Capital.
Is It Worth It To Install Solar Panels
Knowing how you spend annually will help you decide what to do next. Most people understand that solar energy is not going to solve all of their energy needs. However, it will greatly reduce the amount of energy you need to buy.
A typical residential solar panel array can produce 5kW, which can cover up to 75% of an average households electric needs. The remaining required power can be acquired through the grid.
Everyone knows that solar panels help to save on the utility bill. But, because of the considerable up-front investment required in installing a solar power system, the ultimate question for almost all consumers is: How long will it take to pay back the cost of installation? On average, it may take between 7 to 11 years. But the payback period depends on your consumption and the price of electricity you purchase from the grid.
Recommended Reading: Do Prius Have Solar Panels
Are There Other Ways To Make Money Off Of Solar Panels
Yes! There are several incentives offered for installing solar panels. These incentives can include tax credits, rebates, and tax exemptions. For instance, if you live in an area that offers a 30 percent federal tax credit, you can recoup 30 percent of the total amount of money you invested on your solar panels. However, it should be noted that incentives to vary from location to location, and they arent available in all areas.
Make Sure You Are Thorough With Your Research
Before you start the solar farm, you need to carry out the research thoroughly. You need to:
- Be aware of the capital you need to invest in.
- Find out the cost per acre of solar panels,
- Solar farmland requirements,
- Other investors in solar power projects,
- Facts related to solar farm return on investment.
- Problems you might face and how to overcome them.
Remember, you need honest answers to all your questions before you can get started, so lets continue with the article, and hopefully, we will answer some of your questions.
Recommended Reading: How Much Do Solar Panels Cost In Canada
A Look Behind The Industry
When you look at the prices of solar energy, and the fact that you can often make money back on your energy bill once you install your own panels, it can seem like solar energy companies arent making any money. However, there are a few ways that they contribute to their bottom line and that will help you understand where they are doing with their business plans as well. This may help you feel more confident about investing in solar and help you understand how the business is going to grow in the future.
How Do You Invest In A Solar Farm Investment
The easy way to invest in a solar farm, or renewable energy company, is to just buy a stock of a company likeBrookfield Renewable Partners.
Brookfield operates one of the worlds largest renewable power platforms. Weve discussed Brookfield as a company and stock investment in other posts. The purpose of this post is to fill in the gaps and explain how to take advantage of the solar industry yourself by creating your own solar farm, and not to review how to invest in real assets from an investment perspective. You can read this article though: What are Real Assets, and How to Diversify Your Wealth by Investing in Them?
Before we dive into the solar farm business, perhaps you might like to hear Tom Mills discuss his 120 Acre Solar Farm in Camilla, Georgia. He definitely understands nuances of whats involved. This YouTube video is two-minutes long, and is worth the time:
Read Also: Where To Buy Pine Sol
How Much Do Solar Batteries Cost
There are many different brands and models of solar batteries to choose from, each ranging in cost from as low as $180 for a 1.2 kWh battery to $13,000 for a 16 kWh battery. Typically, home batteries need to store a large amount of kWh to be practical, like the LG Chem Prime with 16 kWh storage capacity.
Say you purchased a typical 6 kW solar system, which as of July 2021 would cost you about $17,100 before the federal tax credit. If you included an LG Chem, which for examples sake costs $10,000 , your total system cost would be $27,100 before any rebates or incentives. With the federal tax credit, the entire system would come to $20,054.
Switch To Acadia Power
File this option under save money rather than make money, neither the less its a cool option.
Arcadia Power was created to give everyone a simple, free way to choose renewable energy. People in all 50 states are supporting wind farms, accessing solar power, saving money, and reducing their impact on one digital utility account at a time.
Turn your power bill into something useful. When you create your free Arcadia Power account, they connect you to clean energy and help you spend less on your power bill. Do right by the planet and your wallet.
You even receive $5 when you connect your utility account to Arcadia’s platform for free.
Don’t Miss: How To Get A Job In Solar Energy
Where To Buy Solar Panels
If you also want to buy solar panels, you can contact the Renewable Energy Development Authority of the state government. For this, offices are built in major cities of every state. Apart from this, solar panels are also available with private dealers. For this, you have to first contact the authority for your loan amount. The form will also be received from the authority for subsidy.
How Much You Save With Net Metering Versus A Solar Battery
We will walk you through an example of each net metering type. The price for electricity varies from state to state, but in our example we will use the 2020 average U.S. utility cost of $0.13 per kWh.
The avoided cost rate for utilities, or the amount the utility saved by not providing you electricity, can vary widely and is not the same each month. But for this example, we can assume it is $0.02 per kWh.
For simplicity, we will assume that the Example Home produces 900 kWh of electricity a month but only uses 850 kWh of it.
The amount you save with a battery will depend on the types of net metering policies your state or utility offers. We will compare the most common options below, the following figures hold true for each example:
|Solar energy produced|
|Avoided cost rate of electricity||$0.02 per kWh|
Don’t Miss: How Much Solar Power Needed To Run A House
Our Solar Power Income
Our anticipated solar power income from the Ontario microFIT program was slightly higher than average as we purchased the most efficient solar panels in the world . We anticipated income of $3,970 per year . With a system cost of $44,572 our payback would be 11.2 years – but, because we were purchasing green electricity at a premium, and discontinued that due to our production of clean energy, we’re saving about $60 per month. So at $720 per year of savings, our estimated payback was 9.5 years.
The amount of income you generate is directly related to how much solar power you can generate. Our system went live in November 2010 and in the first year we generated 5,277 kWh of power. Here`s how the cheques rolled in throughout the year:
Can I Earn Money With My Solar Power System
You may be asking yourself: When I install solar panels at my residence, what happens if I generate more electricity than I use? What happens to it? Can I sell that electricity back to my utilities company?
In other parts of the world, you can do just that.
As well as , any electricity you generate that is in excess of the amount you use in your home can be sold back to your utilities company, who will pay you for it. U
nfortunately, in most of America, you cannot do this yet.
In truth, you would need a pretty extensive solar energy system to create enough electricity to completely supply all the power you need for your home, unless you are a supremely energy conscious family.
Even that may not be enough to power your home completely. The days where families would still down together to watch whatever was on TV seem to be over.
Instead, families are more likely to each be doing their own thing watching TV, using a computer or playing on a PS4 or an Xbox in their rooms. More peripherals of course means more power.
You May Like: Are Solar Panels Free In Nj
How Much Money Can You Make Off Of Solar Panels
The amount of money you can make on the energy your solar panels generates depends on where you live and your utility company. Additionally, the cost of using a net metering system the system that feeds the excess energy that your solar panels generate back into the grid will affect how much money you can make.
On average, homeowners can see a reduction of about $400 in their utility bill each year. However, again, that amount does depend on the factors that are mentioned above you could make more money, or you could make less.
What To Ask The Developer When Leasing Your Land For A Solar Farm
Its important to be fully aware of the implications of a solar land lease and maintain an honest, transparent relationship with the solar developer. Every situation is unique and every landowner will have their own questions and concerns when speaking with a solar developer, but there are some common questions that we recommend asking of every prospective developer.
Have you worked in this state before?
Can you provide references for landowners you have worked with in the past?
Which specific portions of the land are being leased?
How will the leased portions impact the rest of the land?
How long is the solar land lease?
How is rent calculated?
Read Also: How Much Does An 8kw Solar System Cost
One More Important Thing To Know
Some factors could increase your payback period. Before installing solar panels, you need to inspect the condition of your roof. Panels can last 25 years, so if your roof is not in tip-top shape, you might have to make improvements before installing solar panels. If this applies to you, make sure to add these costs to your initial investment.
Overall, solar power can be an expensive proposition, especially with the upfront costs. However, the long-term efficiency they provide can more than offset the initial investment, leading to savings for years to come.
Does Solar Directly Make You Money
There is a misconception that when you install solar you are actually making money. In reality, you reduce or eliminate an expense , rather than produce direct income. However, if you run a business or farm, this means you have more money to invest in building or growing your business, which in turn leads to more profitability. Going back to our empty lot example, there is no electricity being used at the lot so therefore you cannot reduce an expense.
Solar is a great way to reduce or eliminate energy costs on your farm.
Whether you want to offset electricity on your farm, business, or home,select the icon below to learn how solar can provide financial benefits to you!
Don’t Miss: What Can A 120 Watt Solar Panel Run
Starting A Solar Farm Business From Scratch
When you start a solar power business from scratch, you need to learn a lot about the industry. You must have knowledge about installation, different products available, and solutions for business owners and homes. It is also about building a good relationship with the suppliers and different sales consultants.
When you start a solar farm, market research and feasibility are quite important. Services of a solar firm are useful for the following industries:
- High schools, colleges, and universities
- Blue-chip companies
- Financial institutions, insurance companies, and banks
- Religious organizations
- Publishing Houses or Printing Press
- Contractors, developers, and real estate owners
- Research and development companies
Should You Add A Solar Battery Storage System
Ultimately, if your state has good net metering policies and your only concern is saving and earning money, do not buy a battery. But if your state has bad net metering policies, no net metering at all or uses Time-of-Use utility rates, a battery makes sense for you.
And while battery net metering does have potential, it is not yet widespread enough to be part of your calculation when deciding whether or not to get a solar battery.
Find out how much it can cost to install solar panels, and potentially a solar battery, on your home by using our solar panel calculator below.
See what local solar companies are charging for solar-plus-battery installations
How Much Land Is Needed For A Solar Farm
Large solar projects have some requirements that need to be met in order to work.
According to GTM Research, a 1 MW solar farm will need 6 – 8 acres of land.
This gives room for all of the equipment needed as well as space between each panel row.
Large solar projects need space for the solar panels as well as the equipment that goes along with making it function, such as inverters.
The rows of panels need to have space for repair and maintenance access and the space is given so that there arent any shadows from the adjacent solar panel.
Lastly, the land must be open, without obstructions that can cause shade over the solar panels.
Land that is in direct sunlight is ideal – free of trees or nearby tall buildings, barns, etc.