11 Economic Benefits of Solar Energy

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Key takeaways

  • Solar power creates cheaper electricity, leading to more spending power to boost the economy.
  • Energy independence and unlimited supply frees people and businesses from the mercy of soaring energy prices or sudden shortages.
  • Solar energy economics means more money in your pocket and more value in your property.

Table of Contents

As a global trend, solar power just keeps getting hotter. In the U.S., the market is growing by around 24% year on year and already generates enough power to supply 30 million homes. In fact, more than half of new electricity capacity added to the grid last year came from solar. The exciting thing about this is that these solar energy economics work for society at every level. From individuals to small businesses to suppliers and contractors that support them, and right up to national economies as a whole, people, communities and countries are seeing massive immediate and long-term financial benefits from bringing solar into the mix. This Renewable Energy Day, we sum up 11 of the most important reasons why.

The big economic impacts of solar energy

We often focus on how solar energy benefits the individual households or businesses investing in it, but if you scale up, the impact on broader society can also be profound. These benefits are enhanced even more by government incentives like Solsmart in the U.S., which offers free technical assistance to towns and county governments that are serious about embracing solar.

Here are our top 4 socio-economic benefits of solar PV adoption.

1. It reduces energy costs

Ever-soaring energy bills are a nightmare for families and businesses alike. This squeezes household budgets and profit margins, putting people under huge financial strain and threatening to push SMEs out of business.

Having alternatives to hand like solar PV is a great way to reduce dependence on volatile energy markets. It makes energy bills more manageable and predictable, increasing spending power and boosting the economy overall.

2. It creates jobs

At a time when unemployment rates are causing real worry all over the world, the global renewable energy sector is going from strength to strength, employing around 13 million people as of 2022. In the U.S., hundreds of thousands of people already work in the solar industry’s 10,000+ companies, spread across every single state. With over $36 billion invested in the industry, this will only continue to grow.

3. It optimizes land use

One great thing about solar power is that you don’t need to buy up loads of land or take up space that could be used for other purposes before you start generating electricity. Pretty much any available area on an existing building can be put to use. You can put solar panels on rooftops in the middle of the city. A balcony on an apartment can be refurbished with a solar installation. Solar systems can be incorporated on farms or even floating on the surface of water, generating power for agricultural purposes and other economic sectors. And if you do want to set up utility-scale solar projects, you can always put them in remote, uninhabitable areas, where there’s no competition for space. It’s the best of both worlds.

4. It boosts sustainability and resilience

Solar power is incredibly sustainable. Sunshine is an infinite resource – it’s never going to run out – and it can’t suddenly become scarce or expensive due to a market shock or problems in the supply chain. Because of this, having strong access to solar power will make a community or country far more resilient.

Plus, using solar power doesn’t create any harmful emissions that damage human health or the environment. You don’t have to spend money as a country just cleaning up the physical harm caused by using it. From an economic perspective, this makes it very attractive indeed.

Economic benefits of solar energy for homeowners and businesses

Perhaps more than any other type of power generation, using a solar PV system delivers swift and dependable benefits for households and small businesses. That’s because, unlike the alternatives, you’re in control. You set it up how you want, designed for the level of demand that you need. You can decide whether to store electricity and use it at any time of day. And best of all, if it ever starts to turn a profit, that profit is yours to keep.

Here are the five biggest benefits for homeowners and businesses.

1. It reduces your utility bills

Solar energy economics is all about reducing utility bills. Research from the U.K. suggests that homeowners can reduce their overall energy costs by 62% by incorporating solar power. If you’re using battery storage and selling electricity back to the grid, the rewards get bigger and bigger… but more on that below.

2. You waste less energy and avoid peak hour charges

An energy storage system means storing excess power in batteries rather than having to use it right away as soon as it’s generated.

This means the energy doesn’t go to waste. It also means you aren’t hit by “peak hour” electricity prices, which usually come in during the evening when its dark and your PV has stopped working for the day. Instead of paying top dollar, you can simply drain power from the battery during this time – for free.

3. You get government incentives

Governments around the world are actively encouraging people to invest in solar and many offer generous rewards for those that do. Incentives range from tax credits and grants to cover installation costs, through to net metering – i.e. buying back excess electricity from individuals, and crediting them as this is added to the grid. Under the Inflation Reduction Act, Americans can now get a 30% tax credit against their federal tax bill to offset the costs of solar installations in their homes or communities, while programs like SolarAPP+ also aim to reduce the set up costs. Similar tax incentives are offered in countries all across Europe. The Australian city of Adelaide pays citizens $5,000 to install Solar PV, while small and medium businesses across the country can claim up to a third of their costs back as tax write-off. These kinds of incentives might not last forever, of course, making it an ideal time to take the leap. You can find more benefits for commercial solar systems here.

4. You become power-independent

We mentioned above that if you’re able to capture and store the solar energy you produce, the benefits are even greater. Battery storage means you can access electricity from your solar system whenever you need it, not only while the sun is shining. In other words, you’ll have power independence – you won’t be reliant on buying electricity from other companies at all. In fact, you might even be storing so much electricity that you don’t need it all for yourself and can start selling it back to the grid. This is a great additional source of income, and once you’ve paid off the costs of the installation, you’ll be getting your solar energy for free! It depends on your system design and how much power you use, of course, but if you’re using Hoymiles products, we estimate that you could start seeing return on investment in as little as three years. Plus, you can extend the warranty on our microinverters for up to 25 years, giving you even longer periods of optimal power production, and even greater returns on your investment.

5. It boosts your property value

Having access to your own, independent source of power isn’t only an investment for you, but also for anyone who might live in your house in the future. That means a high-quality solar PV system can also increase your property value in the long term.

What are the economic benefits of solar energy for installers?

As the solar industry continues to grow, contractors, builders, and dedicated installers of the technology have new opportunities coming their way, too. That means…

1. You can grow your customer base

Having the technical skills to install solar PV systems means you can branch out to more kinds of projects, diversifying your clients and significantly growing your business. It’s a great way to increase your earnings and ensure a steady supply of work.

2. You’ll Be in Short Supply!

What’s more, skilled installers are in very high demand. That means qualified installers will find themselves with plentiful jobs and customers. It also means you’re unlikely to be competing hard over price and can get paid well for your valuable services. It’s a good idea to get into the market now, though, while you’re still in relatively short supply.

3. It’s a Very Efficient Business Model

Full disclosure: this benefit only really applies if you’re using our products. At Hoymiles, we’re constantly striving to make our products quick and easy to install, but also robust and rugged enough to last for the long haul. Our plug-and-play microinverters are really simple to set up and make the system design super flexible. Our FLEX accessories also work like building blocks – they fit together with barely any wiring to worry about. This saves installers up to 70% of time – and frees them up to really focus on growing their business.

Conclusion: Is solar energy worth it in 2024?

As a planet, we’ve barely begun to tap the full economic potential of solar energy. Every 1.5 hours, enough sunlight hits the earth to cover the whole world’s electricity needs for an entire year, but only a tiny fraction of this is being harnessed…yet.

The earlier you decide to switch to solar, the faster you can reap the rewards and start seeing a return on investment. These savings will always be valuable of course, but right now, government incentives and the chance to sell excess electricity to the grid means it’s an especially good time to take the leap. If you’ve been weighing up the choice for a while, make 2024 the year you finally make it happen.

 

Want to learn more about designing a solar installation that will maximize the benefits and create faster return on investment? Give us a call or drop us a message today.

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