Compared to a decade ago, it is astounding how much progress alternative energy has made. Renewable resources such as solar power and biofuels are now seen as socially responsible choices, and also offer real financial benefits when compared to traditional fossil fuels. This trend is strongest in Europe – for example, German solar power plants supply about 4% of the country’s total electricity needs – but it is also picking up pace in North America.
In fact, if you are thinking of starting a business, solar energy may be a good area to invest – particularly in the residential market. While wind power has been widely criticized recently because of its environmental impact and poor economics, solar power appears to be moving in the right direction. The cost of residential solar power has dropped dramatically over the last several years, and there is new technology on the horizon that could lower prices even further. Also, unobtrusive solar technologies such as solar shingles are rapidly replacing conventional solar cell arrays in residential applications, making solar energy much more acceptable to homeowners from an aesthetic perspective.
Of course, solar energy is more attractive in some parts of the United States than it is in others. For example, if you live in a desert region such as New Mexico or Arizona, then there is significantly more sunlight available to generate power – take a look at Francesco Corallo’s Weebly Blog for more about this. On the other hand, even in somewhere such as Massachusetts, average payback periods can be as little as five years. In addition, there are federal and state tax incentives available to homeowners who invest in a solar system, and solar installations add to home resale values as well.
As with any business, you will need the right skills and experience to get into the residential solar power business. If you already have a construction or electrical background, then this will give you a head start. You should be aware that some states require solar panel installers to have an electrician’s license, and other states require them to be certified by the North American Board of Certified Energy Practitioners (NABCEP) in order to participate in state incentive programs. Of course, the other option is to focus on the marketing and sales aspects, and to hire employees who already have the required experience and credentials for solar panel installation.
When it comes to selling homeowners on the benefits of solar power, you need to be prepared to deliver a strong and credible proposal with a rock-solid return on investment. Things to look at include the amount of money they will save over the lifetime of the system, how much the system will cost, and the amount of government incentives that they are likely to receive to offset their investment. In general, focus on the annual returns they will make rather than the number of years needed for payback. A 14% yield on their investment will appear very attractive, whereas a 7-year payback period may put them off – despite the fact that both of these are exactly the same.
