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Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

THE BLOG

Innovate Africa With Dotun Adeoye Every Sunday

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

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Business Opportunities in Renewable Energy for large businesses

As the world moves towards a low-carbon future, especially with the breakthrough recorded at Cop 27, many opportunities exist for large businesses that want to get involved in renewable energy. There are four main areas where this is happening, including one that might surprise you: Utilities have to buy renewable energy, and increasingly they are doing so from third parties. In other words, it’s possible for someone else to be responsible for supplying clean electricity to your utility—and make money doing so!

Renewable energy is a huge business opportunity.

Renewable energy is a huge business opportunity. Many companies are competing to provide solutions for renewable energy, and this competition means more options for you to choose from. But with all the opportunities available, what should you be looking at?

The answer is wind power! Wind turbines have been around for decades and have been used by many large businesses. They’re great because they’re reliable, easy to maintain and produce clean energy from an abundant resource: wind!

Looking at the big picture, there are four main opportunities.

Looking at the big picture, there are four main opportunities.

First, utilities have to buy renewable energy. Second, they must also pay various fees and penalties for not buying enough renewable energy. Large renewable energy companies can use those fees and penalties to build power plants in their state or elsewhere in the US (or even internationally). Thirdly, utilities need engineers and technicians to build out their grid systems so that renewables can be integrated into them effectively; this is another significant opportunity for large businesses. Finally, building owners who want cleaner electricity for their company or building will become more interested in using it once they see how much money they can save by going green.

First, utilities have to buy renewable energy.

The first step in becoming a renewable energy provider is to get utilities to buy renewable energy. Utilities must buy renewable energy, even if they don’t want it. In fact, they’re required by law to do so. The state of Texas has a Renewable Portfolio Standard (RPS) that requires its utilities to obtain at least 10% of their electricity from sources like wind and solar by 2020; as of 2018, only about 3% was coming from renewables due in large part because the state hasn’t developed much wind power yet.

But this doesn’t mean that there aren’t opportunities for companies who make renewable equipment—it just means that you need another way in besides selling directly to the utility itself!

The biggest opportunity lies in two industries: residential solar installation and large-scale wind farms.

The second opportunity is in building and operating power plants.

There are two main business opportunities in renewable energy. The first is investing in renewable energy projects, such as wind farms and solar power plants. Renewable energy is a large and growing market, with many different companies involved in this industry. Some businesses specialise in financing renewable energy projects; others manufacture components for these facilities; others provide services related to building or maintaining them once they’re up and running.

The second way to make money from renewable energy is by building or operating power plants yourself. When you create your own power plant—for example, if you install turbines on your land to generate electricity—you’ll have access to the profits from selling that electricity back onto the grid (or using it yourself).

The third opportunity is in financing these projects.

The third opportunity is in financing these projects.

Large companies with a lot of cash on hand can finance renewable energy projects by themselves and own the resulting revenue stream from the project.

Companies that don’t have a lot of cash but still want to invest in clean energy can work with banks or private equity funds to help finance the project by issuing debt (bonds) or equity (stock). This type of financing is called “debt/equity hybrid” because it combines both types of capital.

Some companies even partner with utilities that are willing to buy renewable electricity at a pre-determined price over 20 years or more through power purchase agreements (PPAs). The company then builds their own solar farm and sells power directly to its utility partner under this arrangement.

The fourth opportunity is in the rapidly growing set of companies competing by providing software solutions for managing large and distributed deployments of renewable generation assets.

The fourth opportunity is in the rapidly growing set of companies that are competing by providing software solutions for managing large and distributed deployments of renewable generation assets.

To achieve this, they rely on a combination of technologies to perform functions such as monitoring equipment health and performance, managing demand response events, integrating with utility data management platforms (DMP), and facilitating payments between asset owner(s) and third parties via automated clearing house transfers or credit card transactions.

Renewable energy offers many large businesses the chance to profit from saving the planet.

Renewable energy offers many large businesses the chance to profit from saving the planet. The first step is for utilities to buy renewable power. Second, a solar panel manufacturer could make money by building and operating power plants. Third, an investment bank could finance these projects.

Fourth, there are other opportunities for large companies to profit from green electricity without producing it themselves:

Bottom Line

It’s important to note that large companies cannot have all renewable energy. The growth of rooftop solar systems, and small systems connected to the grid, will continue to provide a massive opportunity for individual homeowners and businesses. But it is also clear that large companies have a role in ensuring that renewable energy becomes an ever more critical part of our economy and society.

Who am I?

I am Dotun Adeoye, a Business Growth Strategist & Author of the 5 Pillars of Business Growth. 

I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 29 years.

Today, I consult with large businesses on how to sustainably grow their businesses, sustain infinite growth, ensure business continuity and achieve a legacy.

Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718

 

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