Solar power has been around for a long time, but expensive and inefficient equipment was holding up its breakthrough into the mainstream. Early solar systems were very cost-prohibitive, requiring years of use at maximum capacity for the owner to recover his or her investment. Panels were large, heavy and cumbersome to install. However, the solar power landscape has changed dramatically in the past decade. Today’s photovoltaic panels are far more affordable and efficient than early models, making solar energy feasible not only for residential and commercial use, but also as a means of generating income.
Increasing numbers of so-called solar farms are cropping up all over the world. A solar farm is a large-scale solar energy generation system with multiple commercial solar panels that uses photovoltaic technology to create large amounts of electricity, which farmers then sell back to the power grid at a profit. There are numerous strategies that can be used to establish this type of business.
First, landowners can purchase and arrange installation of their own photovoltaic equipment, or find investors to do it on their behalves. Both approaches have advantages and limitations. Owning solar power equipment adds a significant asset to a portfolio, but with that ownership comes the responsibility of maintenance and upkeep on the equipment. If ownership is deferred to an outside investor, the burden of equipment upkeep is avoided at the cost of a decreased stake in the solar farm business.
Here is how each option typically breaks down:
Those who invest in their own solar systems take on all the risks and responsibilities involved with the launch of the venture, but reap all the financial rewards that come with connecting the system to the power grid and selling off the electricity to the power grid.
Those who work with outside investors typically rent or lease their land or roofs for a long term. The investors offer the landowner a percentage of the royalties generated by electricity sales as well as annual or monthly rental or land lease payments. They may also offer a one-time bonus when the photovoltaic system becomes operational.
The most efficient and profitable solar farms take advantage of roof space as well as ground space for the photovoltaic cells. Building integrated photovoltaic cells (BIPV), which replace building components like rooftops with power-generating solar equipment, are typically used in conjunction with large-sized standard PV cells to maximize electricity production capacity of a site.
Owners of commercial real estate can also install solar canopies which shade parking areas while generating electricity that can be sold back to the power grid. Not only does this strategy generate additional revenue, it also increases the overall value of the property significantly.
The U.S. Department of Energy provides interested parties with extensive resources to help them learn more about solar investment. Their solar power website contains news articles and links to information on grant opportunities, tax incentives and other benefits that may be available to people who help power the solar revolution and create a greener tomorrow.