Almost all the renewable energy sources are directly or indirectly derived from the sun – the only exceptions are geothermal energy (which exists as a result of the processes that happened during the formation of earth billions of years back) and tidal energy (which is a result of the interactions between the earth, sun and the moon).
While estimates vary, it is generally accepted that if the total amount of sunlight falling on earth were fully utilized, it will be able to provide us over 1000 times the primary energy consumed by the world today. This fact alone explains why entrepreneurs and businesses should constantly look at this domain, in spite of the fact that solar power today is much more expensive than other renewable energy sources – solar is likely to be the most pervasive form of renewable energy source by 2025.
Classifications of solar energy
Solar energy can be put to use in three ways:
(1) By using its light energy through the photovoltaic effect to produce electricity (also called Solar PV - Photovoltaics)
Solar PV finds applications in power stations, in buildings: either integrated into them, mounted on them or mounted nearby on the ground. PV has traditionally been used for electric power in space. PV is rarely used to provide motive power in transport applications, but is being used increasingly to provide auxiliary power in boats and cars. They are used as standalone devices in locations where significant connection cost makes grid power prohibitively expensive. Such applications include water pumps, parking meters, emergency telephones, trash compactors, temporary traffic signs, remote guard posts & signals and in rural electrification.
(2) By using its heat to heat water, create steam and run a turbine for power production (also called Solar CSP – Concentrating Solar Power)
Concentrating solar power systems can be sized for village power (10 kilowatts) or grid-connected applications (up to 100 megawatts). Some systems use thermal storage during cloudy periods or at night. Others can be combined with natural gas and the resulting hybrid power plants provide high-value, dispatchable power. These attributes, along with world record solar-to-electric conversion efficiencies, make concentrating solar power an attractive renewable energy option in the sunbelt regions worldwide.
(3) By using its heat directly for heating and drying purposes (called Solar Thermal).
Solar thermal systems collect heat directly from the sun, then deliver it at the desired temperature for domestic and industrial use. Today, solar thermal applications are in use for swimming pools and spas, domestic water and space heating, commercial and industrial process heat.
Each of the above ways presents a plethora of opportunities for businesses, not only as a power producer but also in terms of manufacturing, trading services all along their long value chain.
Entrepreneurs can set up components and accessory manufacturing plants for both solar PV and solar thermal industry; set up manufacturing units for a range of solar energy related products; entrepreneurs can involve in trading of solar panels, balance of systems and solar based products for the retail market. Significant opportunities exist in the service sector as well, right from system installation to decommissioning.
In addition, solar systems are used in innovative ways in different market segments. Architecture and urban planning (building integrated photovoltaic), agriculture and horticulture, communication, On-shore and off-shore oil & gas, waste water treatment, desalination, remote monitoring, warning signals etc are few examples where solar is applied.
A glimpse of business opportunities from solar power
Currently, most business ideas revolve around serving off-grid customers (customers not served by the electricity grid or mobile establishments in remote locations), providing back-up power and so-called peak shaving.
Electricity tariffs are usually structured to encourage conservation by increasing tariff rates at higher levels of consumption i.e. through increasing marginal rates. Using solar power thus helps reduce the amount of electricity consumed within this tariff range and thus provides significantly higher savings. This is called peak shaving.
Solar panels are used to charge deep discharge batteries which are used as back up for emergency or back up lighting. As can be seen, this is kind of a customer base is very restrictive and in countries where utility power is very cheap or subsidized, solar power may become unprofitable. Thus, new business models and innovative products are required to widen customer base and improve penetration.
There is a lot of scope for such services in developing countries like India and Brazil which are blessed with high solar radiation as well. Electricity grids are poorly developed in these countries and never reach far flung areas.
People in such areas have very minimal energy requirements thus making grid extension an unprofitable exercise. Solar power fits the bill perfectly in these cases.
There are instances where only a few panels have been able to successfully electrify a village through use of low power devices like CFC for lighting. A few extra hours of lighting in the night is highly welcome as it increases working hours – thereby affecting household income – and makes the environment conducive for education of their children. Thus, entrepreneurs with higher outlays could 'adopt' and electrify such colonies and enjoy decent returns on their investment. In areas plagued by frequent power outages or poor quality supply, local entrepreneurs charge batteries through solar panels and then rent them out during emergencies or power cuts.
In countries like Germany, the Renewable Energy Act enables producers of renewable energy to sell power at significantly high prices (solar power is bought at 43 cents per KWhr). With increasing climate change awareness, carbon foot print has become a buzz word among new-house owners in developed countries. Building Integrated Photovoltaics – PV panels integrated with the structure of a building – is catching on and is throwing open many new opportunities for engineers and architects alike.
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