Here's Why Solar Entrepreneurs Don't Go Off the Grid
The surging growth of renewable energy is creating amazing opportunities for producing, buying and trading clean electricity.
Having a huge budget opens up a lot of options and one of them is the opportunity to produce your own energy, yet ambitious business owners still stay connected to the grid when they have the means to install enough renewable capacities to become independent.
In my quest for answers, I spoke with several entrepreneurs, each of them with their own ideas on green living and the future of the grid. The answers they gave me were not the ones I expected, but these kinds of answers usually make the best story.
Buying solar and saving on energy are trending.
It is undeniable that buying solar and saving on energy are trending both in the residential and commercial sector. Low prices and government incentives make buying easier than ever, not to mention that the benefits are greatest when you own a system.
Vikram Aggarwal, the CEO and founder of EnergySage said "over 90 percent of EnergySage users chose to buy their solar panel system outright, rather than sign a lease or PPA (power purchase agreement."
EnergySage, a startup with funding from the U.S. Department of Energy, is an online marketplace for purchasing and installing solar panels. Its marketplace allows property owners to comparison-shop across several competing offers and financing options for solar, yet its users almost always choose to buy outright, either with cash or a solar loan. This is a clear indicator that people are interested in generating their own electricity and saving in the process.
Hundreds of dollars in savings in the residential sector translates to thousands of dollars in the commercial sector, which begs the question "Why buy any quantity of energy from the grid when you can produce it?"
It turns out that it's not as simple as it may seem.
Entrepreneurs take steps toward sustainability.
Entrepreneurs are more focused on increasing sustainability and the motives behind their efforts were well portrayed by Tom Paladino, founder of Paladino and Company. In our brief interview he stated "You don’t have to care about sustainability to understand that wasting energy is a terrible business strategy. Businesses can make low-cost investments in smarter energy management in the short-term, and benefit for the long-term."
Strategies such as "A dollar saved is a dollar earned" seem to work equally well, if not better than producing electricity. Making sustainability improvements and building with sustainability in mind will save businesses a lot over the years.
Upgrades that generate energy.
Renovating your existing property is an opportunity to both save and produce energy. During my search for answers I had the chance to interview Harmel Rayat, founder of Kalen Capital and Talia Jevan Properties, Inc. Aside from being a prolific serial entrepreneur, business owner and successful commercial real estate investor, it turned out that he's also a major shareholder in the clean energy company, SolarWindow.
So, how does that fit into this story? SolarWindow produces see-through window solar panels that can be installed to all building sides and produce electricity even when they are not exposed to direct sunlight. For a commercial property owner, that's probably a dream come true. A see-through panel that works in shaded areas and makes use of artificial light sounds like the future at our doorsteps.
Harmel also added that SolarWindow "achieves the industry’s fastest published financial payback of less than one year, as validated by a team of independent engineers and at the University of North Carolina Charlotte Energy Production and Infrastructure Center (UNCC-EPIC)."
So again, Harmel knows of a product that's easy to implement, works in less than ideal circumstances and offers a fast ROI, but he still wouldn't recommend leaving the grid. Why?
Why are we still tied to the grid?
Even with all of these incentives and sustainability improvements available today, none of the entrepreneurs recommended cutting ties with the grid. All of them gave a good reason why they won't leave the grid, but probably my favorite answer was the one provided by Dirk van Ouwerkerk, lead partner for Microgrids at Anbaric.
In his interview, he stressed that "even in remote grids there will almost always be a net benefit to connecting customers and resources across a locality or region. And in most cases, it will remain efficient to connect those local areas and regions for trading and reliability purposes. The reason is that electric power always automatically looks for the path of least resistance: it’s a near-perfect, automated arbiter of what’s the best resource to serve each load."
When we produce our own energy from renewable sources, we cannot predict the excess we generate or when a deficiency will occur. Staying connected to the grid for support and producing energy from renewables is and will be the best option for many years to come.
What of those who can't produce energy?
Trading energy through the grid rather than subscribing to a supplier is something that we can expect to happen in the future. Kiran Bhatraju, CEO of Arcadia Power, said his company uses the grid as a trade model, offering solar generated electricity from community solar farms to those who cannot generate it on their property. His community solar program is focused on residential customers.
"We absolutely believe that the commercial sector will adopt community solar,'' he said. "There is an enormous market for businesses who lease office, retail or industrial space and don’t have control of their rooftop. Community solar would allow these businesses to benefit economically and help achieve their sustainability goals."
Considering everything I heard, being part of the grid does not sound like such a bad thing after all.
Jacob Bayer is an entrepreneur, startup enthusiast and father. He is founder and CEO of the energy consultancy Luminext Incorporated. Jacob is best known for his consultancy work in New York's residential and business sector. He has helped thousands lead a more energy-efficient life and advocates the use of renewable energy. He currently offers his services throughout the U.S and consults on various project through his network of partners.