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Renewable energy is clean energy that is generated from natural sources or processes which are continually replenished. For instance, sunlight or wind that constantly shines and blows, even to the limited extent that their availability is dependent on time and weather.

Renewable energy should no longer be regarded as a new technology because harnessing nature’s power has for ages been tried and used for transportation, heating, lighting, and much more. The sun has kept us warm in the day time, while wind has power-driven boats to sail in the water and windmills makes it possible to grind grain. But close to over 500 years ago, various governments have decided to use cheaper (in monetary terms) and environmentally unfriendly sources of energy such as fossil fuel and coal.

It is now widely acknowledged that the supply and reserves of all conventional fuels are relatively limited and the demand for them keep on rising which means that the continued supply to meet current and future demand may not be sustainable. Besides, the resources deployed to continue to generate these fuels is mounting and therefore it makes economic sense to look outside the conventional fuel sources and divert resources to renewable sources which are friendlier to the environment and cheaper to generate.

Some or all of these sources of renewable energy has been explored and found to be in commercial quantity and relatively cheaper to generate than the conventional fuel sources. It, therefore, means switching to renewable energy sources such as wind or geothermal, solar, bio-energy etc. are better alternatives than the conventional sources of energy in terms of economic viability and cleaner environment.

Without further ado, if you have been thinking or considering going into the business of renewable energy, this is the right path to toe as the viability of the project is no longer in doubt. In this article we have outlined in detail a guide on how to go about setting it up, so make sure you read on.

Decide what you want to do

The fact is that there are quite a few types of renewable energy that are considered viable people can rely on. It is therefore up to you to choose the type of renewable energy business you want to set up. Outside setting up your own renewable energy business, there are opportunities in the area of installation, distribution, storage, conservation or even consulting. Ponder on what environmentally-friendly consumers in your area might need and you may reach a decision on the business idea you want to pursue.

How to start a renewable energy business

1. Carry out a feasibility study and report

Feasibility studies conventionally tend to be used to answer the following questions:-

• Whether new or expanded small business operations are expedient in terms of:

1. technical feasibility
2. commercial viability in the light of factors such as likely market conditions (compelling products, public opinion, consumer and environmental legislation)

• Identification of those actions that if taken will help assure the success of the new small business ventures or the continued success of the existing business ventures.
• Highlight those factors that will create unusual high risks and probably lead to business losses and failure.
• Assist in raising needed funds for the smooth operations of small business enterprises.

Read Also: Why Market Research is Important to Small Business

Feasibility studies highlight the product or service the small business plans to make, the market segment/s to be explored, the potential consumers, number of competitors and other environmental factors in the industry such as renewable energy laws

The feasibility study also touches on the production process of the renewable energy product; whether wind, solar-based or bio-energy. It is also necessary to consider whether you are going to be within the renewable energy production or opt for ancillary services in renewable energy such as installation, storage, conservation or consulting.

You should develop a marketing plan to showcase all you have to do to use your available resources to serve your customers.

You must also estimate the capital expenditure (fixed assets) and the working capital for the day-to-today operations of the business.

You should draw up a cash budget highlighting the cash receipts and payments and cash requirements for the first twelve months. This is necessary to approximate when there will be cash surplus or shortage to be ready in advance what to do In the event of any of those things happening. Besides, you should project the expected income and expenditure and determine whether the business is going to make profit or loss.

2. Determine your target audience

Discover and communicate with your target market as soon as you have identified who they are, and implement your marketing strategies to start achieving results. Once you are financially equipped and have fully taken off, you must work with your target consumers with the view to generating sales.

If you desire to generate many potential customers, study local demographics; get in touch with companies, consumers, homeowners, schools and others so that you can market your renewable energy services in tune with their needs.

There is a great need for the world over for clean and renewable energy sources. The hydro-power produces electricity in large volume but fossil fuels are a non-renewable energy source and gulp a lot of resources. The amount of money spent on it is enormous and without the prospect of abating in the foreseeable future, so there is a dire need for a cheaper and more environmentally friendly energy source.

3. Develop your marketing strategy

Your marketing strategy for renewable energy should show in broad terms how you are going to attack the renewable energy market, providing information on who constitute your target market and how you are going to reach them through marketing information and distribution network. Marketing information designed to expose your product to the target market should include advertising in print and electronic media, social media platforms, sales interview and so on.

It is very important to have a great number of customers in this type of business since a large customer base will generate the expected revenue. To achieve this feat, it is necessary to go into the field to meet them and speak directly to them on the features and benefits of your product. Showing your potential customers evidence of different ways to produce renewable energy and probably they are going to be convinced. Stick to using personal contact to reach them instead of other forms of promotion since you need to explain and demonstrate the product features and benefits.

You can adopt different ways to meet with your potential customers so far they will patronize your product. Concentrate on meeting class A and B in the social class ranking since they are the influential members of your community. Find out where they can be found, if they are in the church go there if visit them in the clubhouse and so on. Besides, use networking to connect to potential customers who are not in your network. Connect them through the people you know. Use events, no matter how small the event is in your community to reach more potential customers. It could be a house party, wedding engagement of a distance friend or other acquaintance. You could organize or sponsor an event and have your flyers/brochures distributed. If the occasion permits, you can mount on a podium to explain the benefits of renewable energy and your business. Other promotional tactics you may need to consider include:

Local newspapers and technical magazines in your community to advertise your products. Also, make use of the social media such as Facebook, Instagram, Twitter and Myspace, together with others which are invaluable channels to disseminating information.. Make sure to open a business account with Facebook and work to drag traffic to your site.

4. Funding your Renewable Energy Business

Businesses which succeed or fail do so as a result of its ability to provide sufficient funding to sustain itself particularly at the early stages of its life. As time progresses, the company will generate sufficient revenue that will cover the cost and then break-even. Usually, businesses can use the various financing options available during start-ups, and they may include the following:

• Personal savings
• Contributions and loans from friends and family members
• Partnership
• Community schemes
• Bank loans and an overdraft.

Others such as government funding or venture capital are possible but they take long-time to be available and as a start-up, it may not be available as to when needed. As it were, personal savings account for over 70% of start-up funds for the vast majority of entrepreneurs, it shows that other methods of financing are more difficult to obtain. It is necessary to invest personal savings as it lends credibility to your business and stands you in good stead when seeking external funding. Investors will see you as a serious entrepreneur and will be willing to invest in your business.

Read Also: Funding Options for Small Businesses

5. The option of starting your business from scratch/buying a franchise

The renewable energy business, when starting from scratch, is a dicey one and need to be examined thoroughly before you dabble into it. That is why going for a franchise appear a better option because the entire business procedures have been created, business strategies are in place and basically, the business is ready-made. Your job is to study the entire system in-depth, establish good relationships with suppliers and be ready to take off.

The way forward, therefore, is to understudy some of the renewable energy franchise available and make a choice on the one to work with. As has been said, working with a franchise is easier but the cost of procurement may be enormous. As a newbie, it is the best option if funding is available. You can go along with the franchisor’s business plan or fine-tune it or form your business plan.

Challenges facing renewable energy business operators

The earth’s sources of energy are limited and the available ones are becoming increasingly expensive which is why a renewable energy business can be a commercially viable proposition. Most of the renewable energy businesses do need expensive start-up capital but require training so that you can master the rudiments of the business. Despite the manifest benefits of the renewable energy business, by and large, the renewable energy business has some challenges, and they include:

Capital – without adequate initial funding and steady access to sources of funding can hamper the smooth take-off and operation of the business.

Getting adequate training – training is another aspect of the business that need to be given attention. Even in the event of buying into a franchise, you need to have some level of training so that you will be able to manage the business and address some hiccups associated with the business when they arise.

Other challenges include meeting with all the legal requirements to own a renewable energy business and building up a huge network.

6. Choosing a business name and forming a legal entity for a Renewable energy Business

When choosing a business name, select a name that is catchy and get it filed with the country to make it unavailable when others want to use it. Once it is chosen, the next is to register it as a limited liability company (LLC). Other forms of business are available but the nature of this business suggests that LLC is the best option. For example, a sole proprietorship is possible but doesn’t protect you from personal liability Partnership is also another option, but unless two or more people are coming together to do business, but it doesn’t also protect you from personal liability. Forming a corporation is good but it requires the business to have done business for some time before going public.

7. Obtaining your licenses, permits and insurance.

You can’t operate your business in the US without operating licenses and obtaining permits before launch your business. Insurance is also of necessity. If you are in doubt of the nature of license and permit that are relevant to your business, contact your local authority for further details.

With the upgrading of renewable energy infrastructure, the need to obtain relevant insurance has become necessary. You may need to consider obtaining insurance cover in any of the following, but it depends on your area of business:

• Renewable energy insurance
• Community renewable energy insurance
• Wind turbine insurance
• Hydro insurance
• Community hydro insurance and so.

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8. Craft Strategies to Boost your Renewable Energy Brand Awareness

The renewable energy business is relatively at its infancy stage and needs to be branded. It would appear that people talk about it but they do not understand it. Actors in the oil industry over a century have been using different methods to give themselves a corporate identity and most of them have established themselves in the oil industry. Since renewable energy is still searching for their own identity, you must look for ways to provide your product with brand awareness. You can do this in the following ways:

• Research the customer’s mindset in the market you are interested in: once you discover the customers’ mindset, explore it to either change it or recognize it in the name you want to give your brand. Potential customers would prefer a name that is familiar to them or a name they can easily remember.
• Hammer your message: once you have selected a name that your customers will easily recognize and remember, plant it in their minds. These names are your identity and set you apart from other competitors.
• Use engaging content to show your difference: it is fine to identify your product and give it a name, it is even better to show this in all company documents and other forms of communication, particularly when you are engaging others. Do each time you put up a write-up, highlight your brand in such a way that people should recognize it.
• Provide knowledge: when you regularly dish out materials that will create brand identity, provide knowledge to people as well. This way, people will always look forward to reading your piece, and you will in this way plant your brand identity in their minds

9. Winning Competitors in the Renewable Energy industry

Once you have developed the concept, have your plan laid out and come up with how you are going to fund your business, you are almost a renewable energy business entrepreneur. But that is not the end of the matter but just the beginning. If you are not careful the competitors will swallow you up. Don’t start wondering,  “Where are all the customers”? The customers are there but wonder how you are going to capture them. It doesn’t mean people are no longer interested in renewable energy, or those in opposition to renewable energy are winning the debate, but it means that competitors are waxing strong. Here are some of the tips needed to win competitors.

• Know your products: it is not sufficient to theoretical talk about renewable energy, this is the time to demonstrate to your customers in concrete terms that renewable energy works by using pictures and videos to show them that renewable energy is indeed a reality. I can assure you, they will believe you.
• Show them the money: show your customers the economic benefits of switching to renewable energy. Demonstrate to them using your iPad or Laptop to show calculations indicating that renewable energy has the financial advantage. Here it is not about the green environment which we all know the environmental benefits but how they are going to pay less in electricity consumption if they come with you on this journey to renewable energy.
• Sell the Environmental Benefits of renewable energy

Now is the time to join the debate of the pros and cons of renewable energy and argue on the environmental benefits of renewable energy. Argue on the path of green environment, how peoples’ lives will be changed for better if the world would revert to environmentally friendly energy. Argue against the devastating effects of global warming and how it is affecting and impacting on people lives all over the world.

• Make it look easy: convince people to think that it is easy to switch over and implement the renewable energy set of rules and come up successful. Use pictures and video models of successful renewable energy companies such as:

First Solar. NextEra Energy, SolarCity Cooperation, ABB and Hannon Armstrong. These companies have made it big in the renewable energy industry and it can’t be contested. With these companies doing well and you are planning big too, your prospects are going to be convinced.

• Offer Referral Credits: provide generous discounts to first initial customers or similar incentives. People want to be convinced and be dragged into switching into renewable energy by offering them irresistible incentives. So go ahead and offer them something that brings about change of their mind. Use other methods to offer them something that will provide a clear advantage over fossil fuels.
• Be a thought leader in your space: if you have not started developing some thoughts on renewable energy, begin now to do so. Learn more by reading books and researched journals. Join associations of renewable energy people and over time, demonstrate your professionalism in this field. Begin to make your contributions at seminars, conferences as well as online materials. Don’t fold your hands and think knowledge will find its way to you, but get up and go into the field to look for knowledge and demonstrate it to the world, to your advantage.

10. Enlist your potential suppliers

Sometimes businesses in this field fail simply because they don’t exercise good caution about the quality of products they market. If you are certain about the type of renewable energy you want, you will begin to consider contacting suppliers you want to work with. This way, you will have the chance to study their products and eventually make the right choice. You can search for suppliers online by checking reviews and rating. Doing it early gives you ample opportunity to do some background checking and decide on which one to work with.

Read Also: How to Start Sales of Used Cars Business

Conclusion

As soon as you’ve had developed a concept, set out your plan, and work out how you are going to market and fund your business, you are few miles away to becoming a renewable energy entrepreneur.

But that is just a tip of the iceberg, a lot of work needs to be done to make it a reality. You’re going to market your product and convince consumers to patronize your product. That is the crux of the matter, and it is one of the difficult parts of an entrepreneurial function, but it can be worthwhile, particularly when you consider the fact that you’re making a living not only for yourself but others all over the world and also for generations yet unborn. Give renewable energy entrepreneurs chance to save the planet.

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