Barriers in the Way of Energy Democratization
I’m the founder of a solar energy startup, Longman Suntech Energy, which offers rooftop solar power purchase agreements to power consumers with sound credit histories. In simpler terms: LSE installs solar power plants at consumers’ locations free of cost, and consumers subsequently pay less for electricity.
LSE started its operations in 2012 with a direct sales model. However, while LSE was finalizing plans for the rollout of the PPA-based rooftop solar product in 2014, 1776 came to Delhi for the Challenge Cup. LSE was an energy finalist from Delhi and also represented India.
The recognition during Challenge Cup changed a lot for LSE. We were introduced to a Virginia, U.S.-based renewable energy investment bank, which improved financial models and brought in project finance deals. One such deal is currently funding an installation that will be India’s largest rooftop solar power-plant on a healthcare facility.
LSE also met some of the world’s largest PV module manufacturers, based in China, through some other Challenge Cup competitors. The manufacturers offered LSE utility-scale prices for our much smaller rooftop projects to create a dent in the market that we founded in India. Having inked these deals, LSE continues spearheading the solar revolution in India with a new vigor to overcome the barriers that stand in the way of widespread solar adoption.
Entrepreneurship has always been about finding solutions, and the new kid on the block — the startup — does that faster and often better than long-standing corporations. Cleantech startups all over the world are striving to find solutions to efficiently and profitably harness energy from new and renewable sources. Cleantech solutions will make worry of depleting energy sources and price fluctuations a relic of the past. However, startups working in the clean energy space still have numerous hurdles to jump. In particular, the initial cost of investment, the inconsistency of solar power, and the inefficient power distribution and transmission continue to make the race to a world of renewable energy an uphill battle.
Headwinds Solar Startups Face
Solar energy is practically free and cheaper in the long run. Still, the infrastructure required to harness solar energy calls for a higher initial investment than what’s required for conventional, non-renewable resources. Switching over to solar is a big tradeoff — spend more now, and have fun later or vice versa. Unfortunately, many consumers go for the vice versa and choose against going solar.
Longman removes the tradeoff from the table as the options it outlines are very different:
- Pay less for solar energy, and become a green champion today and forever.
- Pay more for the conventional energy, and suffer guilt for being irresponsible.
As more and more consumers now choose to go solar for obvious reasons, we are making solar energy cheaper than the conventional energy in a true sense. In essence, we are creating an ecosystem where apples can be compared to apples rather hamburgers!
Still, more problems exist for solar startups. Solar power is not a consistent source of energy as it fluctuates during the day and throughout the year. The power-generation graph below that our remote monitoring system created from one of our installations depicts the solar fluctuation clearly. Solar’s inconsistency will come up as a big problem when solar comes to command a major share in the overall power-generation pie.
Additionally, the developing world — with the steepest growing energy demand curves —has the creakiest and leakiest power transmission and distribution networks. For example, Indian power lines lose 32 percent of the power transmitted through them. Clearly, more still lies ahead of us.
Innovation for Democratization
On the bright side, the clean energy ecosystem around the world isn’t lost on these challenges. Companies like Tesla Energy have devised products such as Powerwall that store energy for future use. Clever algorithms in such new-age tech sharply reduce fluctuations caused by solar power and allow “distributed power generation solutions,” such as rooftop solar power plants, talk to each other.
Moreover, rooftop solar has an inherent advantage — it is located at the very point of consumption and loses less than 2 percent of the power generated. Thus, rooftop solar power plants talking to each other will ultimately overcome the power fluctuation issues and reduce the overall inefficiencies of the power infrastructure by reducing the overall reliance on the creaky power transmission infrastructure. Plus, innovative business models are making deployment of these technological innovations possible.
Lastly, the sun — the massive fission-based nuclear reactor hanging in the air — ensures that sunlight reaches everywhere for free and without any licensing requirements to harness it. Therefore, solar power adoption will give consumers the power to decide — how much energy to harness, how much of it to consume at the time of harnessing, how much of it to save for later use, and how much of it to sell or share with others over how much distance. We at Longman Suntech Energy are looking forward to the democratization of the energy industry.