Renewable Energy: A Growing Industry Welcoming Big Business and Startups Alike | Innovation Management

With the rise in global warming and climate change as a product of burning fossil fuels to power a civilization on the cusp of a technological revolution, governments and their citizens are demanding a change.

After all, there is a burning need and a desire to shift the global focus from fossil fuels to sustainable energy production methods that will not only benefit the Earth, but the global economy as well. And forward-looking business leaders are taking notice.

Given the fact that in 2018 the US increased its solar PV production from 53.8 GW to 64.2 GW is a testament to the rapid expansion of the renewables industry, which is why current projections indicate that the US PV capacity will double in size as soon as 2024. Two key drivers are at play here:

This creates an opportune environment for homeowners to ensure a long-term ROI from powering their homes with renewable energy, while companies looking to venture into the industry have the opportunity to capitalize on an ever-rising trend. With that in mind, let’s take a closer look at the opportunities that arise for established corporations and small business ventures in the renewables sector.

Opportunities for Big Players

The renewables sector is a cumbersome marketplace that is projected to surpass 2.15 trillion US dollars by 2025, which creates ample opportunity for businesses of all sizes to capitalize on the expansion. That said, smaller businesses do have a more difficult time penetrating the industry due to the sheer size of the capital investment needed to solidify their position against the larger corporations. This is why the majority of renewable energy operations are supported by large companies looking to diversify their portfolio, and even sell the energy at wholesale value.

A smaller business that has the infrastructure to then sell this energy directly to the consumer can create an affordable gateway into the market. That said, the big projects in the industry are still dependent on government subsidies and initiatives. Many countries are pledging to increase the production of renewable energy in the long term, with many claiming that they will reach 100% energy efficiency in the years and decades to come. Some of the most notable efforts come from Europe, India, and Australia.

Supporting Wave Energy in Europe

Wave energy is an exciting, and relatively new field of the renewables industry. Pioneering this field is AW Energy, a company that invests in the research and manufacturing of technology that utilizes the kinetic energy of ocean waves (the world’s largest battery, essentially) to generate electricity. Based in Finland, the scientists involved in the project have been developing the concept of wave energy since the early 90s.

In 2016, with the help of the state and extensive funding from private investors as well as the European Investment Bank, AW Energy created the first commercial WaveRoller – a proprietary invention that sits 15 meters below sea level to generate electricity from water movement. While the technology is not inherently better than wind or solar, it emphasizes resource predictability as one of its major strengths.

Emphasizing Solar Power in Australia

Australia enjoys its fair share of pure sunshine throughout the year, so it’s no surprise that solar energy is its most lucrative prospect. This is something that companies as well as the government are focusing on nowadays, as attested to by the country’s first solar battery initiative ran by the leading solar and battery installer Natural Solar in cooperation with the state’s Specialist Disability Accommodation (SDA) and the National Disability Insurance Scheme (NDIS) programs. The focus of this initiative is to bring energy efficiency to people living with significant disabilities.

The batteries intended for storing energy generated by the solar panels are expected to help homeowners make substantial financial savings over the course of a year, and the course of the equipment’s 25-year lifecycle. Projections indicate that the average homeowner will be able to save as much as 1,520AUD per year, significantly lowering the average per annum energy cost from 2,000AUD.

India’s Wind Energy Initiative

In India, things are a bit different. Companies are emphasizing the lucrative prospect of wind energy, but they are doing so without any substantial government support in terms of subsidies, legal framework, or infrastructure. That’s not to say that India’s officials are not interested in expanding the renewables market in the years to come, as Union MNRE secretary Anand Kumar states that the government is hopeful of meeting the target energy capacity for renewables of 173GW by 2020. This might seem like a lot of power, however, the sheer size of India’s residential and commercial markets begs the need for quicker expansion and expedited legislature.

Companies such as Mytrah Energy have been leading the sector with substantial financial investments into solar and wind energy production over the years, yet the Chairman of the company, Ravi Kailas emphasizes the need for the state to outline crucial policy frameworks for the sector to operate and grow. Currently, the company has a pipeline of wind projects exceeding 4,000 MW.

Opportunities for Small Businesses

The renewables industry might be easier to penetrate by the established corporations in the field, but that doesn’t mean that small businesses and startups can’t get their foot in the door. Through government subsidies and grants, and most importantly, collaboration programs the likes of the Small Business Vouchers (SBV) initiative, small businesses can obtain the funding and intellectual and technical resources needed to keep up with the technological advancements, and to venture into the renewables industry successfully.

The key to long-term success in the field for small competitors, however, lies in the strategic approach to their first investment. The renewables industry encompasses a myriad of business models, products, and tech solutions, and aspiring entrepreneurs need to be aware of the most cost-effective options for their first investment.

These include, but are not limited to:

These examples can represent the foundation of a small business’s long-term growth strategy, and serve as a stepping stone for exponential expansion into other lucrative faucets of the renewables sector.

Closing Thoughts

Renewable energy is the way of the future for many countries across the globe, and is even projected to be the only feasible solution to the pervasive problems of global warming and climate change. These trends, accompanied by strong government incentives to get more businesses to contribute to the growth of the sector, make renewable energy the most lucrative investment opportunity for companies of all sizes.

About the author

Emma Miller is a marketer and a writer from Sydney, working with Australian startups on business and marketing development. Emma writes for many relevant, industry related online publications and does a job of an Executive Editor at Bizzmark blog and a guest lecturer at Melbourne University.