Why Investors Are Flocking to Solar Energy

Investors are turning significantly towards solar energy lately due to the numerous advantages it offers as an energy source. As more and more investors choose solar energy over other traditional energy sources, it’s important to understand why this shift is happening so that you can take advantage of the financial opportunities before you.

If you’re looking to invest in the solar energy industry, these reasons why investors are turning to solar will help you understand what they’re seeing in solar that you may be missing out on.

What Is Solar Energy?

When we think of renewable energy, most of us think of wind turbines and hydropower. However, these forms of energy are responsible for just a fraction of renewable electricity generation in America—less than 2%.

Solar power is by far our largest source of renewable energy (nearly one-third), and that number is only going up as solar technology improves and becomes more cost-effective. In fact, since 2010 America’s installed solar capacity has increased 5x. But what exactly is solar energy?

The Rise of Renewable Power

Over 70 countries around the world have renewable energy goals in place. Many of these are part of a plan to generate more than 25% of their country’s total power from renewable sources by 2025.

Despite pushback from groups that say renewables won’t be able to fill in for fossil fuels, many experts believe solar and wind power will soon become mainstays in local markets worldwide.

Decreasing Costs

The cost of solar energy is decreasing at a rapid rate. The prices for solar panels have dropped from $74 per watt in 1977 to just 75 cents per watt today. Experts expect costs will continue to fall, which could lead more and more consumers and investors to favor it as an alternative source of power over natural gas or coal.

What Are Some Advantages of Going Solar?

The first thing that you may think of when considering going solar is, of course, cost. For example, it can cost up to four times more money on your energy bill each month.

This means that if you’re paying $200 a month on your electricity bill already, going solar could save you as much as $800 or more per year – not including any rebates or subsidies that might be in effect in your area.

Perks for Commercial Investors

Most industries have taken some interest in solar energy over recent years, but one particular segment has begun to take an especially serious look at it: commercial investors. Large companies have increasingly begun installing solar panels on their office buildings and facilities, looking for ways to reduce their environmental impact as well as save a substantial amount of money.

In many cases, installing these panels may result in a nearly immediate return on investment due to lower energy costs and tax incentives from local governments.

Impact on the Environment

While it’s true that solar power is still a tiny part of our energy portfolio, experts predict it will continue to grow, both here and around the world. In 2015, investors poured $270 billion into renewables

expecting that number to rise even higher in 2016. As scientists uncover new discoveries about pollution and global warming, they also learn more about how solar can play a role in fighting them.

What Is Photovoltaic Technology?

Photovoltaic technology converts solar energy into direct current electricity. With photovoltaic panels, sunlight is converted directly into electricity, which flows from a solar panel directly into your house’s electrical grid. This means you can use a smaller generator or battery bank to power your home.

Costs and Other Considerations

In many cases, installing solar panels can be expensive. If you’re thinking about solar energy for your home, find out how much it will cost and look into rebates and incentives that might help offset those costs. In some states, utilities pay you for excess energy generated by your system. And in some areas, community organizations offer free or low-cost panels with installation.

Understanding Net Metering

Net metering credits customers for any electricity they generate that’s sent back into their utility grid. The key advantage of net metering is that it provides an economic incentive for homeowners and businesses to install solar panels, wind turbines, or other renewable energy systems. Utilities typically sell energy for a flat rate; with net metering in place, solar customers are paid a fair price (usually above market value) when they generate power.