Green Energy Business – 4 Things To Know Before You Jump In
Green energy business as a concept has been bubbling for years – but things are now coming to a boil. In 2010, almost $50 billion from the Federal stimulus package went to green energy business and innovations that promoted higher energy efficiency and renewable energy technology. The U.S. President’s State of the Union address in 2011 stated the objective of having 80% of the nation’s energy come from green energy or renewable energy sources by 2035.
All this indicates a boom coming shortly in the green energy business space. Where Government invests, there’s sure to be a future market. Just about every developed country offers incentives, tax credits and other benefits to home owners and businesses alike that shift towards clean green energy for their needs. And renewable energy technology is inherently more efficient.
Stimulated by these benefits, home and business owners are in turn approaching contractors, window and door makers, landscapers and builders about installing green and environment friendly systems. The timing was never better to launch your own green energy franchise or business. But you’ll have to do some homework first.
What Exactly Is Green Energy Business?
Green energy is a source of power or energy that is environmentally friendly and non-polluting. While it is sometimes used interchangeably with the term ‘renewable energy’, there are stricter norms for defining green energy when it comes to claiming eligibility for tax breaks or rebates, subsidies or support from governments.
Green energy business is a broad term that includes involvement in various facets of producing, distributing and consulting upon green energy initiatives. With the current trend being to implement green technologies in every facet of life, this is a booming area of expansion and growth which many savvy and forward thinking business people are eagerly exploring.
Identify Your Green Energy Business Niche
The umbrella of ‘green energy business’ covers a slew of micro-sectors that is growing more diverse day by day. There are many things that can be done from a green standpoint. And this is simultaneously an opportunity and a danger. Small businesses need to research and identify their specific green energy business niche (such as solar energy business) before charging ahead, or else they may get stuck.
Most green energy business revolves around electricity. Many small businesses know little or nothing about electricity and its distribution. Renewable energy may bring to mind wind farms with hundreds of windmills turning turbines that throw off megawatts of electrical power, but those green energy business ventures are in the realm of big, deep-pocketed investors and manufacturers.
Getting into the wind turbine business and building wind farms or similar huge renewable energy sources can require serious investment capital. It is also inherently risky, with a lot of time and effort being expended into research that may or may not work. A typical green energy business venture to manufacture power generators that are fueled by renewable energy could cost $8 million or more.
As one alternative energy business entrepreneur put it, “You not only have to come up with something different in the green energy business arena – it has to be something different that actually works!”
But there’s still room for small players in the big field. On the periphery of green energy business, there are many opportunities with low start up costs that still retain high profit potential. Some of these include:
- selling green energy or technology
- installation of green energy systems
- research and development, with a view to selling it to bigger companies
Most renewable energy operations like wind energy business are funded by wealthy corporations. Some of them will actually be generating power without an established system to distribute it to end users. Buying up the surplus power at wholesale rates and then selling it directly to consumers at retail price is what made Ambit Energy, a green power business, the fastest growing company on the 2010 Inc.500 list. And there are many such ways to profit from green energy business.
Take Advantage of Green Energy Incentives
State governments are offering residents and business owners a range of grants, tax breaks, and rebates for taking green energy initiatives. By tapping into this scenario, a green energy business can quickly build a customer base that goes on to purchase expensive installations and ongoing upgrades of environment friendly technology.
When households are offered incentives to upgrade home heating and cooling systems, install solar panels, purchase energy efficient appliances or make weathering improvements, it is a natural extension for green energy business owners who meet such needs to step up to the plate and serve these specialized needs.
Many green energy business ideas can stem from this. You can act as consultants about the best systems and changes to consider. Or you can act as installers and repairers who will actually implement these changes for clients. This sort of assessment/retrofit work can keep a small business engaged in green energy projects without ever having to step into the hyper-competitive arena of providing comprehensive green energy solutions to buildings.
Contracting As Green Energy Business
Government agencies could save $200 million annually on energy costs according to the U.S. Department of Energy. And small green energy business can bid for contracts that these agencies are required to put out for modifying and upgrading their facilities. This makes for several exciting renewable energy business opportunities.
While a new small business won’t get big contracts right away, it is possible to work your way up by delivering on your promise and doing a good job. Getting green energy contracts from governments isn’t easy or non-competitive. But if you know your niche, have a clear understanding of what it takes, and can deliver what you contract for, this can be an ideal way to break into green energy business.
And in this area, being a small business can actually be an advantage since there are programs specifically meant to counsel businesses that are owned by veterans, women, or below a certain size, on how best to bid for and secure such contracts. What’s more, you can even sub-contract for work from bigger contractors who win federal contracts directly.
Getting “Green” Certification
In a competitive marketplace, having your business “green” certified carries significant advantages. Residents looking for energy efficiency or wanting to switch to renewable energy are more likely to work with a green certified energy business than another. Federal agencies are even required by law to seek out such businesses.
Standards for green certification vary by region. Complying with them and getting certified is an indication that you know what you’re doing. It carries a credibility boost in the eyes of your prospective customers. As a green energy business, this can be one of the smartest decisions you’ll make.
With residents, businesses and government all moving towards clean renewable energy sources, and offering incentives, rebates and grants for green energy business and their clients, this is the best time to be involved in green energy as an entrepreneur and go green business. The race is global. The stakes are high. And financing is abundant. Break in, find your niche, and reap rich rewards from your green energy business.
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