Before getting into the topic, allow me to take stock of what it means to invest in renewable energy. Investing in renewable energy means installing systems that produce energy from renewable sources like water, terrestrial heat, sun, and terrestrial heat.
The aim is to obtain one energy savings, a profit from the sale of energy or both. The elements that characterize an investment of this type are:
- Low risk
- High incomes
- Clean energy production
Low risk
One of the elements of comparison between investments is the risk rate. In the financial market, the most profitable investments are generally the riskiest, while those with limited risk usually have low returns.
Investments in renewables have a low and controllable risk because they depend on the amount of sun, wind, running water in a river, and the earth’s heat. Zero risk does not exist but in this case, it mainly depends on you. You can increase your investment risk by making risky choices dictated by enthusiasm or superficiality.
High incomes
Income is the crux of an investment. The higher it is in proportion to the budget spent, the more successful the investment is. By building a cogeneration plant, a wind farm or a small hydroelectric plant, you would benefit from incentives linked to energy production for 20/25 years or from the energy savings generated by this plant.
The concept of income is accompanied by “return on investment”. The return (or payback), in the renewables sector is under 10 years. The income should start from a minimum of 10% per year upwards. This is not a rule, and it is simply what I consider the maximum limit for recommending an investment of this type.
If the numbers are worse than those expressed above, I will advise against the investment, regardless of whether the system lasts beyond 20 years.
Consider that some incentivized systems last less than 4 years while others have a payback of less than 10 years, even without the incentive. These numbers make investments in renewable energy decidedly attractive for those like you, who demand the most from their invested capital.
Clean energy production
Producing thermal and electrical energy from renewable sources means saving tons of fossil fuels, i.e., coal, oil, natural gas, and their derivatives. Traditional power and thermoelectric plants produce energy through the combustion of these elements.
As you well know, the combustion process of fossil fuels emits an enormous quantity of harmful substances into the air we breathe. I don’t need to explain how much damage these substances dispersed in the environment cause.
In addition, an almost indecipherable series of toxic substances are used to extract and process crude oil. They are also burned once they become waste products or dumped into the sea.
As you may have understood, I’m not talking about CO2, which is the lesser evil. I am referring to much worse substances such as nitrogen dioxide, sulfur oxide, benzene, petroleum coke, formaldehyde, etc. All substances are capable of generating tumors, including leukemia, genetic malformations, and spontaneous abortions.
The environmental impact, however, concerns that these gases released by combustion create a greenhouse effect within the atmosphere, causing global warming.
Investing in renewable energy and producing clean energy with wind turbines, biomass cogeneration plants, hydroelectric plants, and solar plants means reducing the emissions of these substances, leaving future generations with a healthier and less polluted environment.
If you are reading this article, you are probably interested in evaluating one of these opportunities, and I trust that you already have a lot of information about it.
However, to make the topic understandable even to those approaching this sector for the first time, I prefer to clarify a couple of concepts to be sure not to leave pieces on the street.
I will list the main types of solutions for energy production without using fossil fuels.
Photovoltaic – Production of electricity from the sun
Wind – Production of electricity from the wind
Hydroelectric – Production of electricity from water
Concentrated Solar – Production of heat and electricity from the sun
Cogeneration – Production of heat and electricity from biomass
Geothermal – Production of heat and electricity from the heat of the earth
These are the primary plants used to produce energy from renewable sources. Now it’s
important that you focus on how they work and how they are incentivized.
Investing in renewable energy is highly profitable, and the risks can be negligible, so it is right to be proud and enthusiastic about planning your system.
I want to tell you that if you’re going to carry out a serious project, you have to invest part of the time and resources before, i.e., in its evaluation. Solarlab, therefore, lets you make the most of your capital in an informed way. Once you have learned this concept, careful analysis and good planning will be your starting point to best approach your investment in renewables.
Thank you for your views on solar energy solutions.