The world depends on energy. Without energy, lights do not shine, ovens do not warm, and motors do not run.
Fossil resources such as crude oil and coal fuel these outlets. The resources are finite and costly in terms of environmental standards and expenses.
Enter renewable resources, which are paving the way for a cleaner, more efficient world. In fact, renewables provide an unceasing supply of alternative energy sources that are carbon neutral.
Indeed, the renewable energy business has been experiencing exponential growth rates in the last decade.
Continuing growth presents the potential to meet the country’s environmental, economic, and social goals. If you are looking for the perfect business idea, then a renewable energy business is the way to go!
However, before you take the next step, starting a business in this industry requires more than just an inkling of interest. The simple guide below provides the practical steps on how to become an energy consultant, register the business properly, and ensure that it is legally compliant.
Is Renewable Energy a Profitable Venture?
Several countries are leading the race in renewable energy.
- In the U.S., almost 14 percent of 2015’s electricity production came from renewables, an increase of about 11.5 percent from the previous four years.
- China, known for its history of using non-renewable energy, is reportedly investing an average of $360 billion in renewable energy.
- In the last four years, 95 percent of electricity in Costa Rica comes from solar, wind, geothermal, and hydro sources.
- Germany is fast becoming the leader of renewable energy by creating enough electricity to power all households for a year. The country has an ambitious plan to generate 65 percent of its power from renewables.
These numbers show that there are many opportunities for innovative solutions in the renewable energy sector. Local renewable energy businesses offer very lucrative and unique opportunities at this time.
The best thing is that you have the chance to investigate your area of expertise as you dive into how to start an energy company. Think of all the industries you have been working for or with, and how embracing renewable energy will benefit them.
Remember, starting a renewable energy consultancy does not mean that you need to set up a hydroelectric dam or wind farm. Your consultancy can involve more than helping others generate electricity. It could also be about storing, conserving, and distributing renewable energy to people and businesses that need it.
But foremost, you need to know what you’d like to sell in terms of products or services.
What to Sell: Products or Services?
Starting your energy business does not mean inventing a new technology or product in the field. You can simply get into the installation, repair, maintenance, or analytics of energy devices. There are plenty of opportunities out there for you!
Get ideas of products or services you can offer within your local market by brainstorming with knowledgeable people around you to find a gap that you can fill.
Some entrepreneurs have renewable energy ideas, which they sell to interested investors instead of developing the ideas into businesses themselves.
If you are still interested in starting your renewable energy business, then keep reading.
How to Start a Renewable Energy Business
Overview of the industry
Renewable energy does not run out!
The energy comes from:
- Natural forces: heat, motion, and radiation
- Chemical energy from biomass: biofuels
Even with the high growth rates in the industry, the total renewable energy used is a small fraction of the global modern energy consumption. Excluding hydro energy, renewable electricity generation accounts for about 8 percent of the world’s electricity generation.
Several opportunities are available at all stages of the renewable energy supply chain. For example, solar water heating is experiencing rapid growth in urban centers and solar street lighting is now common.
Also, there is a steady increase in the number of small scale wind and hybrid energy plants. The biofuel industry is already a significant $2 trillion industry with cleaner fuels surging rapidly in demand.
Who are your potential customers?
A big component of learning how to become an energy consultant is understanding your potential clients.
As a renewable energy business owner, you can market services and products to commercial businesses and residential customers.
Many businesses and older homes can benefit from a comprehensive review by an energy consultant. Generally, an older home wastes an average of 40 percent of its energy expenses, while a company wastes 20 percent or more.
What are the best products and services to offer?
Biofuel production — Biofuels are biomass that is directly converted into liquid fuels. These are super easy to transport and have a high energy density, which is favored for fueling vehicles and some stationary power generation machines. The most common biofuel is ethanol, or alcohol from biomass fermentation that is high in carbohydrates.
Power storage systems — These systems are fast emerging as key solutions to integrating high shares of wind and solar renewables worldwide. A power storage system can store excess generation to provide cheaper and reliable electricity to off-grid communities. The global energy storage deployment market is expected to increase over 40 percent annually by 2025.
Photovoltaic systems — The technology converts sunlight directly into electricity. Photovoltaic systems are a prime source of power for vehicles in space, small electronics, and agricultural applications. Today, photovoltaic technology is emerging as a means of powering grid-connected buildings and homes thanks to advances in solar systems.
Consultancy services — Such businesses help clients investigate, understand, and oversee the installation of renewable energy systems. The goal is to help clients increase their efficiency levels and reduce their energy costs, while mitigating the environmental impact.
Repair and maintenance — Keeping renewable energy sources in an excellent working condition ensures that homes and businesses earn a good ROI on their investment.
Energy auditor — This profession carries out an in-depth, inside to outside examination of the current energy levels and usage practices of a business. The information is then used to create a customized plan with a focus on cost-effective solutions that help the business achieve its energy expenses and usage goals.
Geothermal power — Geothermal power plants use underground hot water or steam to drive steam turbines that power electric generators.
Solar panel sales — Solar energy harnesses energy from the sun. Both business owners and homeowners seek solar consulting services for alternative and more environmentally-friendly ways to produce and use energy. Although there is an initial cost associated with the purchase of the panels, solar power is generated with no associated costs, helping customers reduce or eliminate ongoing electricity bills. State incentives, federal tax credits, and rebates help offset the cost of installing solar panels. Combining solar systems with battery storage solutions help increase total savings.
What do you need to start this business?
Now that you have the perfect business idea, it’s time you take the next step—find out how to start a successful career in consulting!
First, you need to consider the following:
- Business name — The right name is a critical component to starting your renewable energy business. Brainstorm at least four to five potential names, so you can choose a creative and catchy name that stands out. Make sure that the name you choose is simple to pronounce, compare it with other business names in the renewable energy niche, and make it memorable.
- Insurance — Business insurance protects your brand’s financial position in case of a covered loss. The most common coverage for small businesses is General Liability Insurance. Also, consider workers’ Compensation Insurance for your employees.
- Intellectual property (IP) protection — IP rights provide creators protection for their inventions, original works, scientific developments, and so on. Intellectual property rights fall under trade secrets, copyrights, trademarks, and patents.
- Legal documents — Failing to acquire the licenses and permits may cause hefty fines, if not the prospect of being shut down. Local and state business licenses and permits might be required of an energy consulting business. Some states also require that energy auditors have certification.
- Finances — Financing options include personal savings at the early stages of your venture, which shows potential investors that you are serious about your business. External financing from the government, venture capital, and banks are other ways of raising funds required to stay operational.
Possible Challenges in Starting a Renewable Energy Business
While many renewable energy business ventures do not require formal training or startup fees, a few challenges still exist, including:
- Amount of capital required to invest in some business ideas
- Gaining adequate training on how to start a consulting career, run the business, and technology
- Business registration and certification
- Selecting the right name for the business
- Legal complexities that come with starting a renewable energy business
- Networking with professionals and brands in the industry
Investing in a renewable energy business can make a profound impact on your community and millions of individuals all over the world. So far, you have the passion and the drive to make more out of your life by harnessing the growth of this emerging industry. Overall, learning how to become an energy consultant for businesses and households provides a big return on investment.
Investing in solar-based businesses can seem complicated and full of hurdles. However, Solar Feeds provides you with a knowledge base packed with advice from experts on how to set up, run, and make a profit from your solar business idea. Learn more here!