Start a Solar Company

Summary: The technology of converting solar energy into electricity has been highly developed so that manufacturing solar panels has now become a big business. Do you have what it takes to start a solar manufacturing business? Learn some basic information about the industry before deciding to start your own solar company.

Modern technology has made possible the use of solar energy to power homes and farms. Energy from the sun, which is limitless, is harnessed so that it is converted into a directly usable form.

As a source of energy, solar power produces significantly less pollution. It meets the current need for energy sources that is clean and renewable.

It is now possible to convert sunlight into electricity through the use of photovoltaic systems. The smallest PV component being manufactured and sold is called a “module,” which is basically made up of several solar “cells” connected together. When sunlight hits semiconductor materials in the cells, electrons are dislodged. The continuos flow of electrons is then captured as an electric current. Engineers and scientists have done a lot of research and came up with many improvements to this basic system.

If you are planning to put up a solar company, you must understand that this venture is serious business. To start, you must possess or procure two things: a great idea and the funding to develop this idea into a commercial product.

Solar Company -- Technology

In this era of rapid technological development and intense competition, you cannot enter the market without introducing improvements to the product or finding ways to make manufacturing more efficient. To start a solar company, you must have a novel idea that may be a product of your own research or someone else’s, but of which you have obtained a license to manufacture. In the field of solar technology, innovations usually come in the form of a process that will reduce the manufacturing cost of the PV module or that will increase the efficiency with which the PV system converts sunlight to electricity.

Solar Company -- Funding and Profitability

International solar manufacturers spend more than $100 million to build large factories to manufacture PV systems. A large part of funding for solar company startups come from venture capitalists. Further funding needs are supplied by the debt markets. The U.S. Department of Energy also provides loans for companies developing solar technologies.

Efforts to improve manufacturing process to reduce the production cost are driven by competition with coal prices. Solar energy system production remains expensive and must often be reduced so that it becomes less expensive or at least competitive with producing power from coal. The aim is to lower the cost of energy per watt supplied.

These are just some issues that one has to face when putting up a solar company. Another aspect of the business that needs significant attention is getting people to buy solar panels. For one planning to build a solar panel manufacturing facility, coming up with a strong marketing strategy during the planning process should be given as much importance as developing the technology and finding the finances to develop it.

Additional resources: American Solar Energy Society, Office of Energy Efficiency and Renewable Energy.