wind energy business plan

Renewable Energy – Business Plan

Renewable energy. Preparing a Business Plan and a complete Project Proposal for your business idea is the most important step in starting your business. Our expert team of engineers and economists with their knowledge and experience will fully respond to your requests and ideas, in accordance with all the rules of project documentation, writing a business plan, macro and micro economic situation at the time of writing the project. This guarantees the ultimate outcome of your project application and business plan. We make all kinds of projects, business plans based on renewable energy sources (solar systems, wind generators, heat pumps, etc.) for the purpose of obtaining loans, subsidies and other investments. We optimize energy systems in accordance with your requirements, we make a “payback” (payback analysis) period for the designed system. We do SWOT and market analysis of your idea, product and system. We improve processes, increase energy efficiency in existing systems and production processes. We perform this according to the most famous models of excellence TQL, TQM, Kaizen, Sixsigma and their tools (SiPoc, Ishikawa, etc.).

Figure 2. Project proposal and Business Plan for all types of energy systems

The advantages of our business plans are in a modern, effective and chronological content, which consists of:

SUMMARY OF BUSINESS PLAN

• Business idea
• The potential of a business idea
• The key to success
• Necessary financial resources MISSION AND GOALS PRODUCTS AND SERVICES MARKET STRATEGY
• Market analysis
• Competition
• Market performance
• Marketing and sales OPERATION PLAN
• Location and office space
• Human Resources
• Legal aspects
• Credit policy MANAGEMENT
• Team management
• Organization FINANCE
• Financial indicators

Figure 3. Installed wind turbines in an urban settlement

In addition to business plans and projects, we also offer wind generators – turbines, solar panels that can be ordered from us with all the accompanying electrical and mechanical equipment such as: inverter – domestic and EU production, supporting and prefabricated structures, complete design documentation, installation of support systems construction, electrical installation and connection to the electricity grid.

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Home  , navigation  , download page pdf, download files, investors  , search  , a wind project: step by step.

A Wind for Industry project goes through six main stages: screening, feasibility, development, contract execution, project delivery, and project operation.

WHAT’S ON THIS PAGE?

• Feasibility
• Development
• Contract Execution
• Project Delivery
• Project Operation

One Energy projects advance through the same general steps as most large wind projects. A key difference is that Wind for Industry projects tend to have a wider range of technical development activities that include a focus on a single customer’s electrical load and local permitting.

To decide if a Wind for Industry project is feasible, our first step is to screen for any issues that might prevent success. During this phase, we are identifying any red flags as early as we can. Filtering out projects that are not viable as soon as possible helps us be efficient with the customer’s time and our own. The main factors we assess when screening a project are:

Since our “fuel” is the wind, a strong wind resource is required for a strong wind project.

1. Airport Proximity: There are restrictions on building tall structures (including wind turbines) near airports. Typically, a project needs to be at least 15,000 feet from a public airport. Regulations vary by airport size and turbine height.

2. Wind Resource: Since our “fuel” is the wind, a strong wind resource is required for a strong wind project. Determining if a potential project site has good or great wind is complicated; however, we can usually tell right away when the wind resource is bad. Projects generally need at least a 25% capacity factor to be viable. One Energy uses national data sets and proprietary screening tools to filter for inadequate wind resources early.

3. Land Availability: Wind turbines are big. To install these large turbines on site, we’ll need a sufficient amount of land near the facility. Wind for Industry projects typically require an 800-foot square area (1.5 acres) of land per turbine that is free of buildings and obstructions. In the screening phase, we are not investigating acquiring the land yet; we are only checking that sufficient land is available.

4. Energy Consumption: Facilities must consume at least 4,000,000 kilowatt hours of electricity per year to be viable for a Wind for Industry project. The more energy a facility consumes, the larger your Wind for Industry project can be. And with economies of scale, larger projects usually have a lower energy cost.

Filtering out projects that are not viable as soon as possible helps us be efficient with the customer’s time and our own.

5. Power Pricing: One Energy has been modeling wind projects for more than a decade, and has developed a substantial predictive data set that helps us indicate the financial performance of a Wind for Industry project. By primarily considering the customer’s current utility rate, along with the wind resource in their area, One Energy can determine if a project will make financial sense for a customer.

Screening a single facility is the first step we take for new customers. If a customer has more than one facility, many times they request a nationwide screening to help determine which of their other locations should consider Wind for Industry .

Screenings are free and can be completed within two weeks; all we need from customers is basic information to fill in the blanks. While we are happy to enter into a non-disclosure agreement if the customer chooses, it’s not required on our end and screening is often conducted without an NDA. One Energy’s policy is to never talk about our customers without their permission, NDA or not.

IE Flowchart Click to view the general steps One Energy takes to complete an Initial Evaluation report.

We expect a project to mirror the predictions of its Initial Evaluation.

Upon receiving the report, customers have the information they need to decide on taking a project any further.

Feasibility:

In the feasibility step, One Energy produces an Initial Evaluation for potential customers. An Initial Evaluation is a comprehensive but preliminary report to determine the project’s size, siting, energy production, economics, and overall viability. Our in-house Project Planning team investigates the specific details of a project to determine if it is feasible, define its size, and give a recommendation about moving forward.

Our Initial Evaluation reports are expected to be done at 95% confidence and should function as the business case for a company’s internal decision about whether to continue pursuing a Wind for Industry project.

The main report is roughly 50 pages long and considers all aspects of a project, including permitting, land, energy production and consumption, and above-ground and below-ground obstacles.

The Initial Evaluation takes about a month to complete, with no charge to the customer. At this point in the process, One Energy has typically entered into an NDA with a customer. This step is completed without letting the public know a project is being considered. We keep your information and your potential project confidential until it is ready to be announced. We strongly recommend you do the same.

If the Initial Evaluation determines the project is viable, One Energy will also provide a term sheet for a CAPEX or REA project as appropriate based on the customer’s goals. Other firms have charged more than $30,000 for reports comparable to an Initial Evaluation. We don’t think it’s reasonable to charge a customer for a feasibility report.

Development:

Once the customer decides to move forward with a project, we enter the development phase. During this stage, One Energy will confirm the findings and predictions from the feasibility stage and the Initial Evaluation. The result of this step is a Detailed Evaluation – a standalone bankable report and associated engineering that takes a project to “shovel ready” status.

In this step, One Energy may also undertake activities to eliminate sources of execution risk prior to contract execution. This could include on-site geotechnical work, interconnection studies with the utility, special permitting work with the FAA, an on-site LiDAR deployment to gather high resolution wind data, a site survey, or a Phase 1 environmental study. The Initial Evaluation will inform the customer of the specific studies needed during this development stage to eliminate risk.

The Detailed Evaluation takes one to three months to complete, depending on the complexity of the project. If an on-site wind resource measurement campaign is needed, the final report can take up to eight months (if a full six months of wind data collection is required).

For REA projects, One Energy will cover the cost of the Detailed Evaluation

This report would typically cost $100,000 – $200,000 from a consultant. We have invested in the process over the last 10 years and have brought the cost down to less than $50,000.

For REA projects, One Energy will cover the cost of the Detailed Evaluation if the customer’s senior management (with approval authority over the project) has reviewed and approved the Initial Evaluation. We do not require letters of intent or any other commitment documents. We’re expecting you to trust us for 20 years, so we trust you when you say you are serious about the project.

For CAPEX projects, the customer pays the cost of the Detailed Evaluation. A quote will be provided in the term sheet with the Initial Evaluation.

All projects are kept confidential during this stage. There are some instances when a limited public disclosure may be required, depending on the specifics of the project. An example of a “limited public disclosure” is an interconnection study with the utility. Even then, One Energy is usually able to keep the project confidential throughout this process, and we always communicate with and get approval from the customer before anything goes public.

When the development step is completed, we are ready to contractually commit to your project.

Contract Execution:

Most companies have never signed a 20-year agreement and most companies have never bought a wind turbine. We know the approval process takes time to work through, as does contract review and execution. Typically, C-suite executives must approve contracts of this length.

We like to see the Contract Execution process run concurrently with the Development process, so we are being as efficient as possible with everyone’s time.

The only document that needs to be signed is the Renewable Energy Agreement. In some cases, the REA contains leases and easements as exhibits. You can review our standard REA now or at any time, and we are happy to answer any questions you have about it. In general, we hold to that form very strictly. We are happy to work through the document with your legal and accounting teams. We pride ourselves on the fact that our REA has been accepted by so many different organizations. We think that means we have written a fair contract. We will be the most reasonable group you have ever worked with.

Detailed Evaluation Click to view a generic version of One Energy’s Detailed Evaluation report. 

Corporate Value #7: Charge a Fair Price and Get Paid for Our Work.

The contract execution stage often involves a conversation with internal and external accountants and auditors, to ensure the project is not treated as a lease under GAAP. Our REA has been reviewed by a number of external auditors, including the Big 4 , to conclude in each case it is not a lease under GAAP.

If a customer is choosing the CAPEX option for their Wind for Industry project, then the contract execution stage will involve a DEPCO Agreement instead of an REA. This agreement confirms the development, engineering, procurement, construction, and operation (DEPCO) conditions of CAPEX projects.

Rotor Fly One Energy technicians attaching the blades and hub, or rotor , to a wind turbine generator.

Communities enjoy knowing one of their local industrial companies and major employers is making a 20-year commitment to the area.

Project Delivery:

The project delivery stage is made up of four concurrent activities: permitting, public rollout, procurement, and construction. This stage begins once the contract is signed.

During the delivery stage, One Energy works with the customer’s plant and corporate teams to decide how to announce the project to the public.

We believe wind projects benefit companies as well as their communities. Public rollout is important to One Energy because we believe we have a duty to be transparent with the communities we operate in. When we roll out a project, we want to get information out quickly and completely.

The project delivery stage is made up of four concurrent activities: permitting, public rollout, procurement, and construction.

Video FAQ Answers about project community rollout.

To begin public rollout, we typically hold a stakeholder meeting with all key government officials in the same room, at the same time. In this meeting we present the project to stakeholders for the first time. The presentation includes sharing feasibility studies, answering questions, and addressing any concerns from all parties. This meeting can take 1-4 hours depending on the project and the community.

Following the stakeholder meeting, we aim to publish a press release about the project within 48 hours. The sooner we’re able to share the news, the better we can prevent misinformation. In general, the response to Wind for Industry is tremendously positive. We find that communities enjoy knowing one of their local industrial companies and major employers is making a 20-year commitment to the area. 

After the project is public, One Energy immediately completes any remaining permitting that could not be finalized previously. This often includes zoning variances. (The Initial Evaluation and Detailed Evaluation explain the specific permitting requirements for each project.)

One Energy typically leads permitting activities and the public rollout. We will keep your team involved every step of the way, but the responsibility will be ours. As our customer, you can decide how involved you want to be. 

As a project is being rolled out, One Energy is also making sure turbines are available for the project. If we have the turbines in our on-site inventory, then this step is easy. If we need to order new turbines for your project, then the lead time is between 6 – 9 months. All the permitting and international logistics are our problem.

After we have all the permits we need and the project is public, we can begin construction. Our construction team has the extensive experience and training required to complete a Wind for Industry project independently. One Energy self-performs almost all construction activities for Wind for Industry projects – because we’ve found the best way to deliver on the safety and quality our customers demand is to do the work ourselves.

One Energy extensively trains and equips our construction and operation teams.

Required Training:

OSHA 30-Hour Construction

Qualified Electrical Workers

First Aid/CPR

Task- and Equipment-Specific Training

Additional Training:

MSHA Part 46 Surface Miners

Emergency Medical Technician (EMT)

Advanced Emergency Medical Technician (AEMT)

Competent Tower Rescue 

Tower Rescue Instructors 

Laydown Yard One Energy’s stock pile of turbine parts at the North Findlay Wind Campus headquarters.

We are proud of the feedback we’ve received about our safe and considerate construction crew. One Energy team members will be a pleasure to have on your site. We have never had a lost time injury.

As One Energy builds new access roads, foundations, electrical systems, and of course, wind turbines, we are happy to show your team every step of the construction process. Events like “team member days” allow our customers’ employees to visit the site and  see how cool Wind for Industry projects are up close.

We have never had a lost time injury.

As a One Energy customer, you do not need to be involved in day-to-day construction activities. One Energy will get the job done, and we will keep you informed along the way. We have developed proprietary software to track our quality program and documentation retention, and you’ll receive updates through our customer portal and regular reports. Curious about our progress? You are welcome to see the site any time.

The only thing One Energy needs from our customers during construction is coordination for the electrical tie-in of the project with your plant. One shutdown will usually be required for connection and, if we can, we will match your existing scheduled shutdowns.

As a vertically integrated company, One Energy controls the design, engineering, and construction of Wind for Industry projects. If a mistake is made, it is our responsibility to fix. In the history of our company, One Energy has never had an owner Change Order on any of our projects.

Construction takes 3-6 months depending on the complexity of your project. The project delivery phase ends when the turbines are operating.

Project Operation:

Once the project is operating, One Energy continues to monitor and take care of it.

We are responsible for the operation of the turbines and the project over its entire life. In REA projects we cover all the operational costs. In CAPEX projects, the customer is responsible for operational costs and service fees. 

In general, we prefer to have the original equipment manufacturer (OEM) of the turbines perform service; this service is often included in the warranty agreement for the turbines. Turbine warranties range from 5 to 20 years.

One Energy performs all balance-of-plant maintenance and service, acts as the system operators for the project, and responds to all grid and plant issues. Our 24/7 service team is always only one call away.

In addition, we produce monthly operating reports for the project and share them with our customers. Check in on your Wind for Industry project using our customer portal, and rest assured it’s in good hands.

One Energy performs all balance-of-plant maintenance and service, acts as the system operators for the project, and responds to all grid and plant issues.

Our 24/7 service team is always only one call away.

More From Forbes

Best practices for businesses making the transition to wind energy.

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CEO at Freen OU , a small wind turbine manufacturer. We're delivering sustainable energy projects across EU, Middle East, Africa & Asia.

The advantages of wind energy span far beyond the reduction of the carbon footprint and breaking ties with fossil fuels. The transition to renewable energy and more eco-friendly practices can improve a brand's reputation and establish stronger ties with environmentally conscious consumers, which could ultimately benefit a company's bottom line.

Being the CEO of a small wind turbine manufacturer, I'm particularly familiar with the benefits wind energy can provide. Let's take a look at how this transition can be executed, what challenges you might face in the process and how you can effectively minimize risks if you choose to switch to wind energy to power your business operations.

Economic Advantages Of Wind Energy

Tapping into wind energy offers economic advantages and can provide both immediate and long-term financial benefits for businesses. In the context of this article, I will be talking primarily about small wind energy, as it's typically a more financially feasible option for small and medium businesses striving to attain energy independence. Here are a few benefits businesses can see from adopting wind energy:

• Cost-effectiveness: The cost of wind energy has been steadily going down over the years and continues to decrease, which is making it a more financially viable option and can help offset traditional fossil-based energy sources.

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• Cost stability: Energy from renewable sources does not depend on supply/demand fluctuations or market trends. As such, wind energy can offer businesses an opportunity to become less dependent on varying fuel costs and enjoy more predictability in terms of energy expenses.

• Low maintenance: When installed, modern wind turbines require little maintenance, in my experience.

• Revenue generation potential: Unused energy produced by wind farms and energy parks can be sent back to the grid and potentially provide an additional revenue stream.

Steps For Implementing Wind Energy In Business

Energy business is a complex domain, and embarking on your first wind energy journey is no easy feat. For this reason, businesses can consider working with a trusted expert in the field to avoid costly mistakes and common pitfalls.

So, how do you approach something as complex as purchasing wind turbines and making them a part of your energy ecosystem? One viable scenario could look like the following:

1. Conduct the necessary research.

You'll need to assess your historical power consumption, grid availability and status, current and future power needs, as well as your financial capabilities and goals. If you partner with a renewable energy expert, you can work together on this. Use this information to make a purchasing decision, and leave ample room for future growth and expansion.

2. Consider key factors.

Make sure the following factors have been fully considered while choosing a potential installation site for your wind farm:

• Wind intensity and regularity.

• Distance to major transmission lines.

• Unobstructed access to land.

• Availability of purchasers for your excess power.

• Absence of major environmental concerns.

3. Assess the potential impact of your deployment.

Consider the impact on the environment and local communities, and take measures to minimize it. Obtain the necessary permits from local authorities. You can complete this step in cooperation with your partner as well.

4. Take your time.

Ensure you carefully set up the infrastructure, including the preparation of the designated site, installation of power lines and storage options like lithium-ion batteries, if necessary.

5. Complete the deployment.

You can start using wind energy, but ensure you are constantly measuring the effect on your business.

Many companies have already made steps toward renewables. Some have chosen to build their own wind farms, like Amazon in Ireland , or they have switched to predominantly renewable energy sources, something that Ikea has been pursuing .

Key Challenges In Adopting Wind Energy

As we begin 2024, the biggest challenge for potential adopters of conventional wind energy is the upfront cost factor. Inflation, supply chain disruptions and the generally high cost of wind energy equipment can turn such investments into a heavy burden for small and medium enterprises. In these instances, small wind energy could be an option to consider. Small wind turbines are more affordable than their larger counterparts, and their installation does not require the same level of infrastructure preparation and upfront investment.

In addition to cost concerns, other potential challenges can affect the decision to go ahead with wind energy or to consider alternatives, including:

1. Reliance On A Single Power Source

If an uninterrupted power supply is critical for the day-to-day operation of your business, you might want to think about a backup power source, such as an array of solar panels (location and weather permitting) or a connection to the grid. In either case, it will require additional investments in the infrastructure and smart power controllers.

2. Regulations And Permits

In many areas, businesses must navigate a complex regulatory landscape and obtain various permits to install and operate wind turbines. Your plan to switch to wind power may be blocked by local authorities and communities concerned with the potential ramifications of having a wind farm close to their homes.

3. Lower Efficiency Compared To Alternatives

Wind energy might not be the best choice for your area altogether. In areas where wind speeds are poor or land area is limited, solar energy might be a more suitable renewable energy alternative. Each type of renewable energy comes with its own set of prerequisites and challenges, so businesses should conduct a thorough analysis to determine the best fit for their needs.

Environmental Responsibility

With environmental consciousness being infinitely more than just a catchphrase these days, businesses have an important role to play in driving sustainability forward. Adopting renewable energy options is a strategic step toward building a greener future for all of us. Furthermore, by transitioning to renewable energy, businesses not only have the potential to reduce some of their operating costs but also demonstrate a commitment to environmental responsibility. This can positively resonate with customers, partners and stakeholders, and that is an argument that cannot be ignored.

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50 Best Renewable Energy Business ideas You Can Start Today

By: Author Tony Martins Ajaero

Home » Business ideas » Green & Eco-friendly » Renewable Energy

Do you want to profit from the fast growing global renewable energy trend? If YES, here are 50 lucrative innovative renewable energy business ideas to start today .

From photovoltaic solar panels to kinetic energy adapters for stationary bicycles that generate electricity from pedalling, entrepreneurs are taking advantage of the green revolution by finding renewable energy solutions.

Suggested for You

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• How to Start a Wind Farm Business

Since we use energy for almost everything, the recent trend towards greener, more sustainable technology is creating many opportunities for entrepreneurial-minded individuals. But is this just a fad? Or are there viable business opportunities for the long term?

Why Start a Renewable Energy Business?

Firms and investors looking for profits have taken advantage of consumer interest in cleaner energy alternatives and government-incentivized greener business initiatives. Furthermore, political instability in regions like the Middle East have set many nations on a quest for energy independence and security.

Solar, wind and geothermal energy sources can be tapped into from essentially anywhere in the world – at least in varying degrees – thus offering the hope of energy independence and security.

There are innumerable opportunities for implementing an innovative renewable energy solution. However, the best place to start looking is in your own area of expertise. Think about industries you’ve worked in and consider how renewable energy could benefit them.

Also, remember that becoming a renewable energy entrepreneur doesn’t mean you have to build your own wind farm or hydroelectric dam. Think broadly, and remember your areas of expertise. Finally, talk with friends, family, and colleagues as they will help push you towards ideas for things people want or need.

Some people build a business around an idea and then try to sell that idea rather than building the business around something people already want to buy. Green consumers are no different. Below are 50 Lucrative Renewable energy business ideas

Innovative Renewable Energy Business ideas

Solar panel sales and distribution.

Solar energy is really gaining prominence and a lot of people have started using solar energy not only in their homes but also in their factories and offices.

Solar energy is cheaper once it is installed, which makes it the favourite renewable energy source for many people. You can start importing solar panels in wholesale quantities from countries like China and Hong-Kong; where it is majorly produced and sell to solar panel installers and retailers.

Manufacturers in the industry are fighting hard for their position in the market, and they are trying to find ways to put their products in front of the customers. A distributorship is an ideal solution to this common need.

Solar Panel Installation

Electricity failure or cut is the common problem in every house around in any locality. Everyone wants relief from this cut, especially during summer days. The need of electricity can become a business opportunity for you where you can provide solutions to their energy needs by providing consultancy and doing customized solar power installation for your clients.

Before you can start this business, you would need to undergo some form of formal training in school or informal training from professionals already in the field.

Bio-fuel Production

Of course, protecting our planet is not a day’s job and it’s not something that can be done by only one individual but you can also play your own role too by setting up an eco-friendly business.

Yet most entrepreneurs seem not to know how to tap into the green energy industry because they can’t figure the best small green business ideas to pursue.

Setting up such an environmental friendly business would not only make your bank account swell up, it would also give you the opportunity to protect your environment and encourage other people too.

You can start to produce your own bio-fuel too and create your own invention that would run on bio-fuel. It could be a generator, a tricycle or even a motor vehicle.

Wind Energy Installation

Many of earth’s resources are depleting and depleting fast and we all have the duties to take steps to conserve our resources and manage them better.

Energy is top on the list of resources we have to keep our eyes on. Energy costs have become so high and it has had direct consequences on the costs of goods and services. A lot of people are also embracing wind energy.

It’s not uncommon to see an entire community that runs on wind energy. You could set up a wind farm in your area and have people pay you to supply their houses with wind energy. Like solar energy, wind energy is cost-effective.

Solar water pumping system

Water is very essential and everyone knows that water pumping machines sap a lot of energy. You could start a business that helps people install water pumping machines that run on solar power and makes it cheaper and easier to pump water.

Most renewable energy comes either directly or indirectly from the sun. Sunlight, or solar energy, can be used directly for heating and lighting homes and other buildings, for generating electricity, and for hot water heating, solar cooling, and a variety of commercial and industrial uses.

Solar refrigeration system

Solar is the Latin word for sun—a powerful source of energy that can be used to heat, cool, and light our homes and businesses. That’s because more energy from the sun falls on the earth in one hour than is used by everyone in the world in one year.

You could also start selling refrigerators that run on solar power. This would be received with open arms by hotels, bars and fast food outlets.

Power Storage (Inverters & UPS)

Uninterrupted power supply systems also known as UPS or inverters are gadgets used to store energy, so that when there is absence of power, the UPS can be used as a back-up source of power. UPS are used in hospitals, schools, information technology companies, individual homes and almost every company out there. You would definitely make good money from selling this hot item.

Photovoltaic system/modules

Another renewable energy source is photovoltaic system which converts solar radiation into electricity through semi-conductors. Businesses and industry also use these technologies to diversify their energy sources, improve efficiency, and save money.

Solar photovoltaic and concentrating solar power technologies are also being used by developers and utilities to produce electricity on a massive scale to power cities and small towns.

Consultancy Services

Well, you may not be interested in all the buying and selling or installation business but what about selling your knowledge and ideas to people who are interested in the industry? This could be people who need advice on the best renewable energy source to install in their homes and business premises or people who are just interested in learning about the industry.

Most people are unaware that they can start rendering consulting services based on their specific skill or knowledge and starting such a venture does not require any capital. The most important start up requirement is knowledge, good communication skills, marketing skills and networking skills.

Repair & Maintenance services

These systems though durable, have the tendency to breakdown; so they would need regular maintenance and repair. There’s no doubt that starting a repair and maintenance business which would focus on the renewable energy industry is a smart business idea.

Solar water heating system

This one is especially needed in hotels and homes. Instead of using the conventional electric water heaters, solar water heaters would help conserve energy and save money. A variety of technologies convert sunlight to usable energy for buildings.

The most commonly used solar technologies for homes and businesses are solar water heating, passive solar design for space heating and cooling, and solar photovoltaic for electricity.

Electric Vehicles

One major expense that people undergo daily is motor vehicle fuelling. Imagine a world where you didn’t have to fuel your vehicle. You can develop your own electric vehicle or employ people to develop one and sell the idea to you for reproduction.

I am certain that a lot of people would receive this innovation with open arms. However, you need to be deep-pocketed to do this kind of business.

And in case you are asking if it’s possible for cars to run on electric, i say yes it is. A little bit of research would clear your doubt. At least 250 million vehicles are in use in the united states today. They include all kinds of passenger cars, trucks, vans, buses, and large commercial vehicles.

Bio-fertilizer

The agricultural industry could also enjoy the benefits of renewable energy through the use of bio-fertilizers. Once you’ve had an idea, made a plan and figured out how to finance your business, you’re on your way to becoming an entrepreneur – though the work has just begun.

Now you’re going to have to convince consumers to spend money on your product or service instead of an alternative. This is not easy, but it can be very rewarding, especially since, with renewable energy, you are sustaining your livelihood as well as that of people all over the world for many generations to come.

Geothermal Energy Auditor

Humans are becoming aware of the need to protect and preserve the environment; thus sparking the rise of the green movement and an increasing demand for eco-friendly products. The business world is also not left out of this trend.

As the business world gets increasingly competitive, companies are concerned with how to cut costs of production and stay ahead of competitors. An energy auditor inspects homes or business premises and advises on the best way to optimize energy resources usually through renewable energy sources.

Research & Products development

When you invest in the renewable energy industry, you are not only investing in a business that would make you money.

You are also investing in a business that would help to better the lives of generations to come by protecting the environment and you are also investing in a business that has the backing of the government in terms of taxes and funding.

There are so many equipment that can make use of renewable energy sources and hopefully, there are other renewable energy sources that people are yet to discover.

You could start an R&D company with focus on the renewable energy industry. You could even sell your ideas to others, so that they can develop it or you could start developing your own products.

Geothermal Power

Geothermal energy is one of the alternative sources of energy that lots of companies, cities and individuals have adopted. The use of solar has enabled companies to cut costs and gain competitive advantage through reduction of costs.

Statistics all around the world have shown a steady increase in the use of alternative energy over the last five years. This growth is very impressive especially to people who are interested in investing in solar energy business. Geothermal power makes use of heat from the earth as a source of energy.

Financial Consultancy

Investing in the renewable energy industry is no small financial undertaking, which is why investors need financial support most of the time.

You could use your knowledge of the financial industry to seek for financial assistance in form of loans and grants for people looking to invest in the renewable energy industry. Solar is a not only about technology, it is also about knowledge.

If you are a solar expert, then you can become a consultant and sell advice to people who want to enter the market, install or finance a solar project, or even manufacture their own solar products.

Cell phone technologies

With Solar Energy – anybody can become a solar developer.   Find a good location, put together a team of experts (I recommend starting with an experienced solar consultant and contractor to handle the installation) develop a good business plan, raise the money, build your project – use your experience and completed projects to leverage yourself into other solar project. You could also develop cell phones that run on solar energy.

Trainer/Teacher

Another business idea is to set up a training institute that teaches people how to install these renewable energy systems and make money for themselves.

The proliferation of technological advances and the constant new stream of software applications and hardware devices means that there will always be lots of people in need of training or skills upgrading, so they can get the most benefit from renewable energy and programs.

Advertise your service with fliers, in newspaper classifieds, the Yellow Pages, and by networking at business and social functions.

As an author, you would write educational and informational materials about the renewable energy industry. It could be books, magazines or even start a blog.

Geothermal panel Installation

With the increase in the number of people embracing renewable energy, you can start a geothermal panel installation business to help people install good geothermal energy systems in their homes or business premises. Many technologies have been developed to take advantage of geothermal energy—the heat from the earth.

This heat can be drawn from several sources: hot water or steam reservoirs deep in the earth that are accessed by drilling; geothermal reservoirs located near the earth’s surface, mostly located in the western U.S., Alaska, and Hawaii; and the shallow ground near the Earth’s surface that maintains a relatively constant temperature of 50°–60°F.

Independent Solar Consultant

Solar energy consultants supervise, monitor and make recommendations when a solar installation project is being/about to be carried out. A lot of people would like to know if it makes sense to install solar on their property, and could benefit from a professional opinion that looks at the various options and guides them through the entire process.

Solar System repair

You can become a solar system repairer to help people maintain and service their solar panels whenever there is a breakdown or malfunction. Solar systems last a long time – but some maintenance is required from time to time, especially on older systems that might need to be upgraded with new inverters, wiring replaced, storm damage repairs, etc.

Solar projects development

There are a lot of inventions that you can make in the solar energy industry. You can start a company that would be involved in researching and developing innovative products that would enhance the use of solar energy power. Are you a bit of an inventor?

There’s a whole bunch of new solar products being developed.   Need an idea?   Take a look at any existing product that needs power to operate and think about how you could use solar energy to provide that power.  For example solar powered cooling systems (I’m already working on that one personally).

Solar product marketer

Becoming a solar product marketer is also a smart business idea. Some of your responsibilities will be to introduce the benefits of switching to solar energy as a source of power to business owners. You may do this as an independent solar product seller or as an affiliate of a solar installation company.

Solar brokerage Firm

A solar broker helps people save money and time when installing solar energy systems. They shop for the best products at the most affordable prices. They serve as a link between a person who want to install solar energy systems and companies such installations. Solar installations are expensive, and there are a lot of different government programs out there.

Also, some banks will lend money for solar installations – so why not provide your services to help clients find the money they need to build their projects.   Just as there are mortgage brokers – why not create your own “solar brokerage service.

Solar Panel Cleaning Firm

Solar panels need regular cleaning and maintenance and this is mostly done by professionals to prevent damage. You can seize this opportunity to offer cleaning services to people who are interested in having their solar panels cleaned the professional way.

Clean solar panels produce more electricity than dirty panels – and many customers would prefer to hire somebody to keep their solar panels clean rather than clean them themselves, especially if the panels are located on their roofs.

Geothermal Products distributor

A utility can use the hot water and steam from reservoirs to drive generators and produce electricity for its customers. Other applications apply the heat produced from geothermal directly to various uses in buildings, roads, agriculture, and industrial plants.

Still, others use the heat directly from the ground to provide heating and cooling in homes and other buildings.You can become a wholesaler of geothermal power products and to companies and individuals who deal with renewable installation.

Solar Training services

Another smart opportunity is to start a solar energy training school for people who want to learn about solar installation or how to start a solar installation business. You can also organize trainings and seminars for people interested in the use of solar energy.

Sales of informational products

Are you very knowledgeable about happenings in the solar energy industry? Do you have information on products and where to find them at cheaper rates?

Then you can write an e-book sharing your knowledge with the world or a weekly/monthly magazine to share information with interested people. Solar energy is not only about solar panels. In fact, there are many applications of solar, and each with their own set of components.

Solar PV systems, for example, require over 20 components to function at full capacity! The basic components are panels, inverters, batteries, combiner boxes, charge controllers, transformers, breakers and relays, AC & DC wires, grounding equipment, and mounting structures.

Financing consultant

Some companies may be interested in switching to the use of solar energy but may be restrained by the huge costs of embarking on such a project. You can start a business which is aimed at helping such companies raise the needed funds.

If you have the capability to provide financing or insurance, then you should keep an eye on solar. With the exponential increase of the market, there is an urgent need for financing of solar projects and their long-term (20-25 years) insurance. This is a great low risk opportunity with medium and sustainable returns.

Solar Appraisal Services

This service is very useful in the real estate industry. Your responsibility will be to help value homes with solar energy installations whenever they are to be sold. It is the job of the appraiser to prepare a written description of the property, and draw a diagram of the property that shows structures.

Appraisers must also verify legal descriptions of the property with county or city records, along with an estimated market value. Fair-market values are based on factors such as property condition, the values of homes in close proximity, and building replacement costs, using building valuation manuals and professional cost estimators.

Solar Energy Auditor

As a solar energy auditor, your job will be to visit the homes or business premises of people who are interested in cutting energy costs and switching to solar energy to conduct an inspection in order to recommend ways through which they can improve energy efficiency with the use of solar energy.

Another service that is growing in demand is to conduct energy audits and make recommendations how people can reduce their electrical consumption. If you’ve ever thought about having your own business – you might want to seriously look at the potential of doing something that helps promote solar energy.

Solar Insurance

Another smart idea is to offer insurance services to house owners and companies who have solar energy systems installed so that whenever there is a need for repair or replacement, it can be done easily.

Agriculture

You can become a consultant to farmers and teach them how to use solar energy to enhance the growth of crops.

Solar Health Consultant

It’s no news that solar energy is beneficial to human health. You can become a health consultant to help people with illnesses or diseases that can be healed with the use of solar energy.

Solar Energy Promoter

Despite the fact that solar energy is getting more popular, there are still lots of people who are know little about how solar energy can help them cut costs. You can start a business that helps to increase awareness for solar energy power and help more people know about the system.

Job placement Services

There are companies who require services of professionals who are very experienced with solar energy to help them manage their solar energy system on a full-time basis. You can start a recruitment agency to help such companies find professionals who are qualified and capable of filing such positions.

Solar energy storage

Starting and managing a solar energy business can offer a rewarding opportunity to take part in this growing industry while offering a service that helps to reduce energy production’s impact on the environment. Solar technology businesses face distinct challenges.

However, including the cost of materials, but savvy entrepreneurs can reap generous profits from the generation and sale of solar energy .

Another angle of business you can look into is solar energy storage. This involves creating products that can store solar energy as a backup like batteries or generators.

Solar chargers

Conclusively, you can create cell-phones that use solar energy and solar chargers for phones, laptops and even machine.  This is a great business to start because there is room to make lots of money in this field since it isn’t too saturated.

Invent new solar solutions

If you are an engineer, why not apply your skills to designing solar energy products or projects? Entering the solar industry is not difficult for those with basic electrical and mechanical engineering knowledge.

You can learn how to design solar projects and even progress into installing them. Many engineers have turned entrepreneurs and are providing solar power systems to end users.

You can also enter the product design and development segment. You will need a little more electrical knowledge, but with your engineering background it should not be difficult at all. Just note that anything that works on electricity (AC or DC) generated from traditional power sources can work with solar power as well.

Solar mobile power banks

You can create and market power banks that can be charged through solar. It might seem an impossible idea but can be done. You have to do a good research here to be sure that you have all the information that is needed to launch out in this industry.

Non-profit projects

Not everything has to be about money. If you find fulfilment in empowering poor communities and bringing them electricity, or with environmental causes such as reducing fossil fuel emissions to mitigate global warming, then you can start your own non-profit organization.

Many international organizations are looking for partners who can help them spread the message about solar and other clean, renewable forms for energy. Think about it, our planet depends on it.

Produce awareness Products

With everything going on in the solar industry – there is a strong demand for good quality information.   If you are good at research – consider producing research reports, how to eBooks, instructional videos, solar training classes, the list of things you can make is limited only by your imagination.

Start a human resource management business

On one hand, you have a lot of companies in the solar industry that need to hire people … and on the other, you have a lot of people who would like to work in the solar industry.   Start a solar job placement service – offer tips and advice to employers and job seekers alike.

You would be helping a lot of people, including yourself. If you’re a human resources expert, you can solve these problems by offering your expertise as a virtual human resources service. You’ll do it all, from writing employee handbooks to handling personnel forms to setting up and administering 401(k) programs.

Start a School

Have a skill already – like knowing how to install solar panels or solar heaters – teach others. There is a big demand for skilled workers – and you can provide training (either online … or hands on). There is a growing need for skilled installers. That’s just one example; there are many other skills you could teach people.

Other than being a consultant, you can monetize your expertise in other ways: so why not create an information portal online about products and services? Or even start a training school? The market is thirsty for quality information, so do good research, create your own reports, sell your e-books or start filming videos for solar trainings.

Nutritional Advice

Money makes the world go round”: whoever said that first was correct. If we want to solve climate change and change our energy infrastructure, we need to be innovative and entrepreneurial. We need to have green ideas that make more money than their dirty predecessors.

If you look into the world, a very high percentage of the population are vitamin D deficient – and so there is a great need for vitamin D awareness, testing, counselling, vitamin D supplements, etc.

Alternative energy Broker

There is a growing market for companies looking to acquire and develop portfolios of solar projects (at least in Europe).  Typically, they will buy FIT eligible projects that are connected to the grid – but in some cases you can also sell “shovel ready” solar projects with permits.

Solar application and maintenance

Solar applications also include solar thermal systems, street lights, water heaters, cookers, gadgets, home lighting systems, air conditioners, refrigerators, toys and even vehicles. With such a wide variety of choices, why not create a company specializing in one of these applications?

You should also consider the aftermarket products or solar servicing solutions for people who already have a solar installation. While solar panels, and the system at large, require minimal maintenance, they do require proper cleanliness for maximum efficiency.

This is especially true in dusty areas such as near deserts or desert like conditions that are often found in countries like india. Solar installations are also common on large unusable land. So, you can sell your services as a solar cleaner or a solar fixer.

Our sources of energy are becoming more and scarcer and increasingly expensive and eco-friendly green living is becoming more an essential than optional.

Correspondingly, starting a renewable product or energy business can be a profitable endeavour that does our environment some good as well. Many renewable energy businesses require no start-up fees or formal training.

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How To Write a Renewable Energy Business Plan (Template, Sample)

Published Nov.07, 2022

Updated Aug.08, 2024

By: Jakub Babkins

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Table of Content

Renewable energy business plan for starting your own business

Do you aspire to keep both your bank account and the environment happy? A renewable business may be the best choice for you, then. By launching it, you can generate profits while doing your bit for the planet.

A renewable energy enterprise supplies green and clean energy produced by solar, wind, or water resources. The business has immense potential especially due to the launch of B3W in near future.

To commence this business, you require a business plan for renewable energy that covers every aspect. For an insight into how to start an alternative energy company and how to document a perfect operational plan, you can read this article. In this blog, we have given a sample business plan for Clean Power, a startup based in Phoenix. Before entering the business world, it will be helpful to also read a solar photovoltaic feasibility study .

Executive Summary

2.1 the business.

Clean Power is a renewable energy startup based in Phoenix. The company aims at offering clean and green energy solutions to households, institutes, companies, and manufacturing plants.

2.2 Management of renewable energy business

After you have developed an operational plan for starting a renewable energy business, you need to devise a strategy to manage it. Your management strategy should include planning about where to procure the equipment from, where to launch your plant, and how to manage the transitions from raw product to successful installation while remaining within your finances.

In this business plan for renewable energy projects we are documenting how to start a renewable company. We will include segments from business plan for banks to help you with the financial part.

Moreover, in this renewable energy business plan pdf, we’ll also jot down the staff and other requirements to run the company.

2.3 Customers of the renewable energy business

Customer groups may be diverse, based on your preferences. Those of Clean Power are:

• Industrial Complex
• Manufacturing Hubs

2.4 Business Target

The business targets of Clean Power are centered around environmental protection and customer satisfaction. They will be mentioned in the later sections. However, monetary goals are partially demonstrated here:

Company Summary

3.1 company owner.

Clean Power will be owned by Martha Ben. Martha is an Electrical Engineer. She has specialized in Energy Systems Engineering at the prestigious Massachusetts Institute in Amherst.

3.2 Why the renewable energy business is being started

Martha always wished to start a business in the engineering niche. Due to immense renewable energy business opportunities, she decided to go for it.

3.3 How the renewable energy business will be started

If you are worried about how to start a career in renewable energy, just follow these simple steps.

Step1: Create Business Plan for Renewable Energy Company

To initiate the launch, you need to make business plan renewable energy. For reference, you may use this renewable energy business plan template or solar energy business plan .

Step2: Acquire Resources

Subsequently, you are required to procure all the equipment that may be needed to generate renewable energy. You will need to hire the personnel and staff that can help you operate.

Step3: Make you Known

The next step is to advertise your venture and competitive advantage. You should be clear and concise about how you are different and better than your competitors. A good practice these days is to exploit online media, Google Ads, and websites to make you known to the public.

Step4: Manage Finances

As you are finished with devising a business plan, you need to start operating and managing the financial flows.

Services of renewable energy business

Services for startup renewable energy business must be decided as you explore how to get into renewable energy industry. Due to diverse business opportunities in renewable energy, you are fortunate to provide services in any niche. To decide on the services, you should study several renewable energy business plans and explore renewable energy business ideas from online companies.

Whatever services you decide for renewable energy for business, make sure to include all its aspects in your business plan template for renewable energy.

The services of Clean Power are:

• Manufacturing & Setting Up Solar Cells

Our basic service will be to manufacture solar panels, solar tiles, and solar cells to be installed in small and large spaces.

• Generating Hydra Power

We will develop optimized solutions to generate clean energy by exploiting water resources.

• Wind-Powered Projects

We will also establish and install wind power plants in the city outskirts.

• Installing Power Protection Systems

We will also set up power protection systems with relaying networks wherever we install the renewable energy setup.

Marketing Analysis of renewable energy business

There are many factors to be considered before establishing a business in renewable energy. First, you need to explore how to start a renewable energy business in a specific location. You need to check out for average income of people in your vicinity to know whether they would avail of renewable energy solutions or not.

All of this information can be summarized in the marketing analysis segment of your renewable energy business plan. You can further make sections for customer segments, market trends, and prevalent pricing strategies to have a clearer idea of renewable energy business opportunity in your area.

For developing a marketing analysis that considers all business opportunities renewable energy, an expert person who knows how to gather statistical data for secondary analysis is required. You may consider hiring a professional or if you want to do the task yourself, you should thoroughly study a renewable energy business plan sample. A good practice would be to also go through biotech startup business plans to have in-depth knowledge of the field.

5.1 Market Trends

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All the graphs related to renewable energy are seeing an upward trajectory. At present, the market size is $17 billion according to IBISWorld and the figure is expected to rise in the near future. Most of the solar, hydro, and wind power projects are expected to be assigned by the U.S. government in the wake of clean energy programs sought after by B3W countries.

5.2 Marketing Segmentation

In this renewable energy company business plan the market segments identified by Clean Power are given below. Since some of the segments also do overlap with those in gas station business plan and business plan for a biodiesel , you can take guidance from them as well.

Business plan for investors

5.2.1 households.

This segment is expected to make small purchases for mainly solar panels at us.

5.2.2 Industrial Complex

This segment will be making large purchases and they are expected to avail of all of our services including the installation of protection systems.

5.2.3 Institutes

Government and non-government institutions are expected to avail of our hydro, wind, and solar energy services. They might also hire us for installing power system installation systems for generation grids.

5.2.4 Manufacturing Hubs

This segment will form most of our customers. It is because manufacturers look for ways to optimize their operations even when the initial setup costs are high. They are also expected to avail of our power system protection services.

5.3 Business Target

• Maintaining a CSAT score above 90% throughout the service years.
• Capturing 25% of the market share within three years of operation.

5.4 Product Pricing

As per this solar farm business plan , Clean Power will keep its prices in the same range as the market average. However, certain discounts will be provided at the start to attract customers.

Marketing Strategy of renewable energy business

Though there are immense business opportunities in renewable energy, they can yield you profits only when you reach out to a maximum of customers.

A major challenge in renewable energy entrepreneurship is to convince people how renewable energy is ultimately going to save them money as the initial installation costs are high. Therefore, while you learn how to get into the renewable energy industry, you should also explore how to market renewable energy for businesses’ success.

In this blog on how to make a renewable energy project, we are providing the sales strategy developed by Clean Power.

6.1 Competitive Analysis

• Our employees are highly specialized and experts in their domains.
• We are offering several discounts, in the beginning, to get known.
• Customers are our topmost priority, we are willing to go to all lengths to facilitate them.

6.2 Sales Strategy

• We’ll offer a 50% discount to our first 50 customers.
• We’ll offer a 20% discount on all our services in the months of June and July.
• We’ll advertise our startup on social media, in local newspapers, and in magazines.
• We’ll hold seminars to elucidate the importance of climate conservation by turning to renewable energy.

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

Personnel plan of renewable energy business

If you have decided to build your own renewable energy source and help others in doing the same, you should go for planning about staffing requirements. The business renewable energy cannot be run without an expert, dedicated, and talented bunch of workers. You need to devise a criterion for employment and a policy to assign weightage to candidates’ test or interview scores, educational qualifications, experience, etc. to find the ideal one.

7.1 Company Staff

In this renewable energy business plan pdf, we are providing the list of company staff developed for Clean Power.

• 1 CEO to oversee all operations
• 1 Financial Manager
• 3 Electrical Engineers
• 1 Software Engineer
• 5 Electricians & Technical Assistants
• 1 Legal Expert
• 1 Web Developer & Graphic Designer

7.2  Average Salary of Employees

Financial plan of renewable energy business.

The costs incurred in running a renewable energy business are high. At the customer end as well, getting renewable energy setup installed is an expensive venture. The renewable energy suppliers must, therefore, develop a long-term financial plan. Individual financial strategies for each project will also be needed to demonstrate to the consumer how renewable energy is going to save them their dollars in the long run.

It is recommended to hire a professional financial analyst for developing an accurate financial plan. The professional expert in the field will ask you for your fundamental policies and monetary goals and develop a plan with accurate profit margins and loss assessment tables. In case you are looking for a renewable energy business for sale you may get a pre-developed financial plan for that business.

The financial plan of Clean Power is given below.

8.1 Important Assumptions

8.2 break-even analysis.

8.3 Projected Profit and Loss

8.3.1 profit monthly.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 business ratios.

All tables in PDF

• How do I start a renewable energy business?

To offer renewable energy service, you need to make renewable energy plan. If your business plan renewable energy covers all the aspects of your business, you are only left with the task of executing it. You need to procure the machinery, rent the space, and hire some engineers, technical assistants, and managers and you are good to go!

• Which renewable energy is profitable?

If you compare renewable energy sources, you can figure out that solar is the most profitable. It is because its scale can be minimized and extended without many constraints. In this business plan for renewable energy projects we have provided the unit sales and income generated from the solar products.

• How can I start a small energy company?

You can read the complete guide on starting a small energy company in this renewable energy company business plan. The steps would be the same except that your sphere of activity will be confined to a smaller area and your manufacturing scale may be lower than others.

• What is renewable energy in business?

In business, renewable energy is offering those resources to generate power that are never prone to depletion. As elucidated in this renewable energy business plan sample, the business includes designing customized solutions according to your consumer needs on a small and large scale.

• What are the 7 types of renewable resources?

The seven types of renewable resources are:

• Hydroelectric
• Who is the largest renewable energy company?

Tesla is the largest and most renowned renewable energy company in the United States.

• Is renewable energy profitable?

Yes! In the financial part of this renewable energy company business plan, you can see how much profits can be generated as per investment by launching this business. To ensure your business never runs into loss, you just need to make an accurate renewable energy business plan template.

• How do renewable energy companies make money?

Renewable energy companies make money by offering clean, green, and sustainable energy solutions to their customers. In this renewable energy business plan pdf, we have provided all stats for Clean Power for you to gauge how much revenue can be earned through it.

• How can I invest in renewable energy?

You can launch a franchise, start your own company, as well as invest in other startups by buying their shares or stocks. In this renewable energy business plan, you can see a stepwise guide for if you want to launch your own business.

Download Renewable Energy Business Plan Sample in pdf

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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How to Start a Windmill Business

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Windmills have evolved beyond the traditional water-pumping machinations of older days and today generate energy around the world. Define the role your business will play in the wind-energy market, and the market segment it will serve, early in your planning, and then determine whether you will build windmills or service them -- and if you will serve commercial or residential clients. Consider the financial resources at your disposal, and then use those parameters to define the volume of business your venture can initially accommodate, such as how many employees you can afford to hire and train, the size of the facility you can rent or buy or the number of windmills you can build.

Starting the Business

The wind-energy market has grown by 35 percent over the last four years, according to the American Wind Energy Association, which indicates an increase in demand for wind energy -- and an opportunity for entrepreneurs. Focus on one segment of the market, such as servicing or building commercial windmills, and then concentrate your resources on building a positive reputation in that segment.

Write a business plan that details the size, capacity and uses for the windmills you will build or service, who will buy them, how you will finance the business and how it will become profitable. The plan should be between 15 and 20 pages, according to "Entrepreneur" magazine, but that isn't a set measurement; the plan can be as long or as short as necessary. Include how much revenue your business will generate by building, servicing or selling windmills as well as the expenses it will incur, such as employee compensation and annual maintenance and insurance costs per windmill, which RenewableUK estimates to be between 2 and 3 percent of the value of the windmill.

Incorporate the business as a limited liability company -- or LLC, which limits each partner's legal liability to the sum she has invested in the venture, according to the Internal Revenue Service, which also allows LLC partners to claim the business' profit as income on their personal tax paperwork. Structuring your company as an LLC also allows you to take advantage of tax credits and other incentives the IRS offers to wind-energy companies, according to windustry.org. Such incentives include the production tax credit -- or PTC, as well as other incentives introduced as part of the American Recovery and Reinvestment Act.

Locate and rent an industrial space that suits your needs. Commercial-grade, energy-generating windmills can be up to 260 feet tall with blades up to 135 feet long, according to the Tennessee Valley Authority, though energy windmills for home use are considerably smaller. If you will be building custom windmills, confirm that the electrical wiring in your prospective industrial space can accommodate the demand for energy your work will create -- this will vary depending upon the type, number and size of your windmills.

Finding and Serving Your Niche

Identify and locate your customers by joining professional organizations, such as AWEA, and networking with other wind energy companies. Not only will you meet potential business partners and even customers, you will also gain exposure for your business and have access to market research and other data collected by AWEA. Always exchange contact information when you meet a new business associate.

Approach potential customers with a sales pitch, the focus of which will vary depending upon whether your business sells, installs or services windmills. Ensure that each customer's location produces enough wind to operate the type of turbine you are servicing or installing; wind farms need an annual average wind velocity of 16 mph, according to the U. S. Department of Energy. Turbines should be spaced at least five to 10 times the length of a rotor in order to generate energy.

Adhere to industry, national and international professional standards, which include regular maintenance and installation procedures, windmill performance and safety as well as windmill operation. AWEA also offers a Seal of Approval program for academic programs that train service technicians. Third-party approval of your business operations and employee training not only help you perform better, they also help generate confidence in your company and encourage repeat business.

• American Wind Energy Association: Industry Statistics
• "Entrepreneur"; An Introduction to Business Plans
• RenewableUK; Financial Viability of Wind Power; 1998
• U. S. Department of Energy: Tax Breaks for Businesses, Utilities and Governments
• Tennessee Valley Authority: Wind Turbine Energy
• Windustry: Choosing a Business Model
• U. S. Department of Energy; Frequently Asked Questions About Wind Development; Jay Haley

Ben Taylor has been writing since 2005 and has had work published by WEKU-FM and West Virginia Public Broadcasting both on air and online. Taylor holds a Master of Arts in English from Eastern Kentucky University and currently teaches composition and ESL there.

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How to Become a Renewable Energy Entrepreneur

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

From photovoltaic solar panels to kinetic energy adapters that generate electricity from pedaling stationary bicycles, entrepreneurs are taking advantage of the green revolution by finding and marketing renewable energy solutions.

Since we use energy for almost everything, the recent trend towards greener, more sustainable technology is creating many opportunities for entrepreneurial-minded individuals.

But is this just a fad? Or are there viable business opportunities for the long term?

Key Takeaways

• Not every entrepreneur is an investor. Consider opportunities for green services.
• Focus on the industries you're most familiar with.
• Consider government financing sources.

Renewables Are Here to Stay

As the global population rises, the reality of finite resources is sinking in. Our energy requirements cannot depend on fossil fuels forever. Advances in technology have allowed us to tap into reserves that were inaccessible in the past, but that only delays the inevitable.

These concerns, along with the negative impacts of burning fossil fuels, have created an environmentally and socially conscious mindset among different sets of economic actors, including consumers, investors, corporations, and governments. Companies and investors looking for profits have taken advantage of consumer interest in cleaner energy alternatives and government-incentivized green business initiatives.

With all these factors driving the shift towards renewable energy, now is the time to start looking for opportunities to help solve the world’s energy problems and, perhaps, make money doing it.

Recognizing the Opportunity

There are innumerable opportunities for implementing an innovative renewable energy solution. However, the best place to start looking is in your own area of expertise. Think about the industries you’ve worked in and how renewable energy could benefit them.

Also, remember that becoming a renewable energy entrepreneur doesn’t mean you have to build your own wind farm or hydroelectric dam. Renewable energy is about more than just electricity generation. It is also about storage, conservation, and distribution.

Product or Service?

You also don’t need to invent a new product or technology. You can get involved in installation, repair and maintenance, or consulting.

Think broadly, and focus on your areas of expertise.

Finally, brainstorm with friends, family, and colleagues about things that people want or need.

Some people build a business around an idea and then try to sell that idea rather than building the business around something people already want to buy. Green consumers are no different.

Green Consumer Challenge

Despite all the hype about environmental sustainability, the evidence suggests that green consumers look for the same things most consumers want: individual benefit at a low cost.

Although the environmentally conscientious market, labeled LOHAS (Lifestyles of Health and Sustainability), is growing, the green market is still relatively niche. Marketing to everyone else means educating consumers on the advantages of renewable energy, including showing them how it can add value to their lives at a lower cost.

Beyond the LOHAS

Consumers are not the only group that one needs to consider when looking for the right opportunity. Think about how the product or service will affect or be affected by others, such as suppliers, the government, the competition, and financing organizations like banks.

All of these actors could have an impact on the success of your business, so it is helpful to think about the role they will play while you’re in the development stage .

Developing a Business Plan

In devising a business plan , it is helpful to determine if there are other businesses in other regions of the world that are already offering a similar product or service. Look at the fundamentals of those businesses and use them as models for developing your own plan.

The percentage of entrepreneurs who invest some personal savings in the early stages.

Regardless of how extensive you decide to make your business plan, you definitely need to do some initial market research and summarize a business concept. You will want to analyze costs, make revenue projections, and set out some key milestones for developing and launching your business.

Talk to Potential Customers

Remember to conduct interviews with potential customers in order to get a sense of the demand for your product or service and how best to introduce it to the market.

Also, contact suppliers to get price quotes on materials and services that you will need to manufacture your product or deliver your service.

Once you’ve completed your business plan, it is time to figure out how you are going to finance your business.

Financing Your Business

Every business succeeds or fails on the basis of its ability to sustain itself financially, but it could take some time before revenues are large enough to cover costs.

Although there are a number of financing options for new businesses and startups, the research shows that almost 90% of entrepreneurs invest some personal savings at the early stages of their business. And more than 74% said that personal savings were the primary source of initial financing. Using your own savings may also show other potential investors that you are serious about the future of your new venture.

The Options for Financing

Some entrepreneurs obtain financing from banks, venture capital , angel investors, or the government. The first two options may be harder to obtain in the early stages as they tend to demand to see an existing company with strong growth potential before forking over the money. Angel investors, those who offer new and fledgling businesses capital in exchange for equity, are also possible funding options, but tend to offer smaller amounts.

While it can take some time to receive approval and not all businesses are eligible, government funding could be a good way to go given the numerous incentives for cleaner, more sustainable technologies and services.

Visit the U.S. Department of Energy site for current energy efficiency and renewable energy funding opportunities and the National Renewable Energy Laboratory (NREL) site for renewable energy project financing information.

The Bottom Line

Once you’ve had an idea, made a plan, and figured out how to finance your business, you’re on your way to becoming a renewable energy entrepreneur.

But the work has just begun. Now you’re going to have to convince consumers to spend money on your product or service. This is not easy, but it can be rewarding, especially considering that you're sustaining not only your livelihood but that of people all over the world for generations to come. Renewable energy entrepreneurs may just save the planet yet.

RetailMeNot. " 4 in 5 Consumers Think Eco-Friendly Products Cost More 'Green .'"

Eric Koester. " Green Entrepreneur Handbook: The Guide to Building and Growing a Green Business ," Page 88. CRC Press, 2016.

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FACT SHEET: Biden Administration Jumpstarts Offshore Wind Energy Projects to Create   Jobs

Interior, Energy, Commerce, and Transportation Departments Announce New Leasing, Funding, and Development Goals to Accelerate and Deploy Offshore Wind Energy and Jobs

Today, the White House convened leaders from across the Administration to announce a set of bold actions that will catalyze offshore wind energy, strengthen the domestic supply chain, and create good-paying, union jobs.

National Climate Advisor Gina McCarthy, Interior Secretary Deb Haaland, Energy Secretary Jennifer Granholm, Commerce Secretary Gina Raimondo, and Transportation Secretary Pete Buttigieg met today with state officials, industry executives, and labor leaders to announce new leasing, funding, and goals that employ President Biden’s whole-of-government approach, position America to lead a clean energy revolution, and create thousands of jobs across the country with the choice to join a union.

In his first week in office, President Biden issued an Executive Order that calls on our nation to build a new American infrastructure and clean energy economy that will create millions of new jobs. In particular, the President’s Order committed to expand opportunities for the offshore wind industry. The President recognizes that a thriving offshore wind industry will drive new jobs and economic opportunity up and down the Atlantic Coast, in the Gulf of Mexico, and in Pacific waters. The industry will also spawn new supply chains that stretch into America’s heartland, as illustrated by the 10,000 tons of domestic steel that workers in Alabama and West Virginia are supplying to a Texas shipyard where Dominion Energy is building the Nation’s first Jones Act compliant wind turbine installation vessel.

Federal leadership, in close coordination with states and in partnership with the private sector, unions and other key stakeholders, is needed to catalyze the deployment of offshore wind at scale.

Today, the Administration is taking coordinated steps to support rapid offshore wind deployment and job creation:

• Advance ambitious wind energy projects to create good-paying, union jobs
• Investing in American infrastructure to strengthen the domestic supply chain and deploy offshore wind energy
• Supporting critical research and development and data-sharing.

Advance Ambitious Wind Energy Projects to Create Good-Paying, Union Jobs

• Announcing a New Wind Energy Area.  The Interior Department’s Bureau of Ocean Energy Management (BOEM) is announcing a new priority Wind Energy Area in the New York Bight—an area of shallow waters between Long Island and the New Jersey coast—which a recent study from Wood Mackenzie shows can support up to 25,000 development and construction jobs from 2022 to 2030, as well as an additional 7,000 jobs in communities supported by this development. The study indicates the New York Bight lease area also has the potential to support up to 4,000 operations and maintenance jobs annually, and approximately 2,000 community jobs, in the years following. This new Wind Energy Area is adjacent to the greater metropolitan Tri-State area— the largest metropolitan population center in the United States that is home to more than 20 million people and their energy needs. The next step is for BOEM to publish a Proposed Sale Notice, followed by a formal public comment period and a lease sale in late 2021 or early 2022.
• DOI action to unlock deployment potential:  To position the domestic offshore wind industry to meet the 2030 target, DOI’s Bureau of Ocean Energy Management (BOEM) plans to advance new lease sales and complete review of at least 16 Construction and Operations Plans (COPs) by 2025, representing more than 19 GW of new clean energy for our nation.
• Massive supply chain benefits of deploying offshore wind energy at scale:  Meeting the 2030 target will catalyze significant supply chain benefits, including new port upgrade investments totaling more than $500 million; one to two new U.S. factories for each major windfarm component including wind turbine nacelles, blades, towers, foundations, and subsea cables; additional cumulative demand of more than 7 million tons of steel—equivalent to 4 years of output for a typical U.S. steel mill; and the construction of 4 to 6 specialized turbine installation vessels in U.S. shipyards, each representing an investment between $250 and $500 million.
• 2050 implications of meeting the 2030 goal:  Achieving this target also will unlock a pathway to 110 GW by 2050, generating 77,000 offshore wind jobs and more than 57,000 additional jobs in communities supported by offshore wind activity – all while creating further economic opportunity and ensuring future generations have access to clean air and abundant renewable power.
• Advancing critical permitting milestones for the Ocean Wind Offshore Wind Project.  BOEM is announcing a Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for Ocean Wind, putting it in line to become America’s third commercial scale offshore wind project. Ocean Wind has proposed an offshore wind project with a total capacity of 1,100 megawatts (MW) — enough to power 500,000 homes across New Jersey. BOEM previously announced environmental reviews for Vineyard Wind (MA) and South Fork (RI), and anticipates initiating the environmental reviews for up to ten additional projects later this year.

Investing in American Infrastructure to Strengthen the Domestic Supply Chain and Deploy Offshore Wind Energy

• Investing in Port Infrastructure to Support  Offshore Wind.  The U.S. Department of Transportation’s (DOT) Maritime Administration today is announcing a Notice of Funding Opportunity for port authorities and other applicants to apply for $230 million for port and intermodal infrastructure-related projects through the Port Infrastructure Development Program. Port Infrastructure Development Grants support projects that strengthen and modernize port infrastructure, and can support shore-side wind energy projects, such as storage areas, laydown areas, and docking of wind energy vessels to load and move items to offshore wind farms. In addition to supporting our nation’s long-term economic vitality, DOT’s review process will consider how proposed projects can most effectively address climate change and environmental justice imperatives.
• Access to $3 billion in Debt Capital to Support Offshore Wind Industry through DOE Loan Programs Office.  DOE’s Loan Programs Office (LPO) released a fact sheet to facilitate access for the offshore wind industry for $3 billion in funding through LPO’s Title XVII Innovative Energy Loan Guarantee Program. The fact sheet signals that LPO is open for business and ready to partner with offshore wind and offshore transmission developers, suppliers, and other financing partners to scale the U.S. offshore industry and support well-paying jobs. To date, LPO has provided $1.6 billion in support of projects totaling about 1,000 MW of onshore wind.

Supporting Critical Research and Development and Data-Sharing

• Announcing offshore wind R&D funding through the National Offshore Wind R&D Consortium.  The National Offshore Wind Research and Development Consortium (NOWRDC), created by the DOE and the New York State Energy Research and Development Authority (NYSERDA), is announcing the award of $8 million to 15 offshore wind research and development projects that were selected through a competitive process. The new projects will focus on offshore support structure innovation, supply chain development, electrical systems innovation, and mitigation of use conflicts that will help reduce barriers and costs for offshore wind deployment. The NOWRDC was established in 2018 with a $20.5 million DOE investment, matching funds from NYSERDA, and with follow-on contributions from state agencies in Maryland, Virginia, Massachusetts, and Maine—all resulting in a total investment of around $47 million.
• Partnering with Industry on Data-Sharing.  The Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) is signing a Memorandum of Agreement with Ørsted, an offshore wind development company, to share physical and biological data in Ørsted-leased waters subject to U.S. jurisdiction. This agreement is the first of its kind between an offshore wind developer and NOAA, and paves the way for future data-sharing agreements that NOAA expects to enter into with other developers. NOAA anticipates that Ørsted’s and other companies’ data will fill gaps in ocean science areas—particularly in ocean mapping and observing—in service of NOAA’s mission to advance climate adaptation and mitigation, weather-readiness, healthy oceans, and resilient coastal communities and economies. 
• Studying Offshore Wind Impacts.  NOAA’s Northeast Sea Grant programs, in partnership with DOE, DOC, and NOAA’s Northeast Fisheries Science Center, is releasing a request for research proposals to support more than $1 million in grant funding to improve understanding of offshore renewable energy for the benefit of a diversity of stakeholders, including fishing and coastal communities. Grant funding will support objective community-based research in the Northeast to further understanding of the effects of offshore renewable energy on the ocean and local communities and economies as well as opportunities to optimize ocean co-use.

At today’s convening, leaders from across the Administration shared their commitment to work closely with one another and with key stakeholders to deliver the economic potential presented by offshore wind energy resources.

• National Climate Advisor Gina McCarthy:  “President Biden has declared very clearly that when he thinks of climate, he thinks of people and jobs—good-paying, union jobs. That’s because President Biden believes we have an enormous opportunity in front of us to not only address the threats of climate change, but use it as a chance to create millions of good-paying, union jobs that will fuel America’s economic recovery, rebuild the middle class, and make sure we bounce back from the crises we face. Nowhere is the scale of that opportunity clearer than for offshore wind. This commitment to a new, untapped industry will create pathways to the middle class for people from all backgrounds and communities.”
• Secretary of Interior Deb Haaland:  “For generations, we’ve put off the transition to clean energy and now we’re facing a climate crisis. It’s a crisis that doesn’t discriminate – every community is facing more extreme weather and the costs associated with that. But not every community has the resources to rebuild, or even get up and relocate when a climate event happens in their backyards. The climate crisis disproportionately impacts communities of color and low-income families. As our country faces the interlocking challenges of a global pandemic, economic downturn, racial injustice, and the climate crisis – we have to transition to a brighter future for everyone.”
• Secretary of Energy Jennifer Granholm:  “This offshore wind goal is proof of our commitment to using American ingenuity and might to invest in our nation, advance our own energy security, and combat the climate crisis,” said Secretary of Energy Jennifer M. Granholm. “DOE is going to marshal every resource we have to get as many American companies, using as many sheets of American steel, employing as many American workers as possible in offshore wind energy—driving economic growth from coast to coast.”
• Secretary of Commerce Gina Raimondo:  “The Commerce Department is committed to innovative partnerships that advance the best science and data to ensure the development of offshore wind is transparent and inclusive of all stakeholders,” said Secretary Raimondo. “We look forward to engaging the public and private sectors to invest in clean energy solutions, like offshore wind, that will contribute to our whole-of-government approach to combat the climate crisis and create high-paying, high-skilled American jobs.”
• Secretary of Transportation Pete Buttigieg:  “Tackling the climate crisis is vital to our nation’s future,” said U.S. Secretary of Transportation Pete Buttigieg. “The Biden-Harris Administration is taking actions that show how creating jobs and addressing climate change can and must go hand in hand. Today’s announcement makes a critical investment in our nation’s ports, which in turn builds up the resilience and sustainability of America’s economy.” 

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How Much Capital Is Needed To Start A Wind Energy Business?

By alex ryzhkov, get full bundle.

Startup Costs

Introduction.

The wind energy industry is on the rise, experiencing significant growth and advancements in recent years. According to the latest statistics, the global wind energy capacity reached a staggering 651 gigawatts (GW) by the end of 2020, with the United States being one of the leading countries in wind power generation.

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As the world focuses on sustainability and reducing carbon emissions, small-scale wind energy solutions have emerged as an attractive option for residential areas, farms, and small businesses. These solutions provide environmentally-friendly and cost-effective alternatives to traditional energy sources, empowering individuals and communities to embrace renewable energy.

In this blog post, we delve into the startup expenses involved in opening a small-scale wind energy solutions business. From designing and engineering innovative wind turbines to establishing a production facility, we will explore the various one-time costs that need to be considered. Let's dive in!

Research and Development for Innovative Wind Turbines

Purchase and Installation of Manufacturing Equipment

Acquiring Raw Materials and Components

Setting Up Production Facility and Office Space

Investment in Marketing and Advertising

Hiring Qualified Personnel and Training

Purchasing Vehicles and Transportation Equipment

Investment in Advanced Technology and Software

Legal and Administrative Fees

Now that we have highlighted the key startup expenses, let's explore each of them in detail and understand the costs involved in launching a small-scale wind energy solutions business. Stay tuned for our upcoming blog posts where we delve into each expense category and provide valuable insights for aspiring entrepreneurs in the renewable energy sector.

Starting a small-scale wind energy solutions business requires careful planning and financial investment. Here are the key startup costs involved:

1. Research and development for designing and engineering efficient and innovative wind turbines for different energy needs.

Research and development (R&D) plays a crucial role in the design and engineering of efficient and innovative wind turbines for various energy needs. It involves extensive testing, analysis, and optimization to ensure the turbines are capable of producing maximum energy output while minimizing maintenance and operational costs.

According to recent statistical data, the average cost of R&D for designing and engineering a small-scale wind turbine ranges from $100,000 to $500,000. This includes expenses related to conducting feasibility studies, prototype development, and performance testing. The complexity of the turbine design and the scale of the project can significantly impact the overall R&D costs.

During the R&D process, engineers and designers explore different technologies and materials to enhance turbine performance and durability. They analyze wind patterns, site-specific conditions, and energy requirements to customize turbines that can efficiently harness wind energy in diverse geographical locations. Additionally, R&D efforts focus on improving the efficiency of components such as blades, generators, and control systems to optimize power generation and reduce maintenance needs.

Successful R&D in wind turbine design often involves collaboration with universities, research institutions, and industry experts. This collaboration helps in accessing cutting-edge knowledge, advanced simulation tools, and expertise in aerodynamics, materials science, and renewable energy. By leveraging such resources, companies can develop cost-effective and sustainable solutions that meet the evolving energy needs of residential, agricultural, and small business sectors.

To accelerate R&D efforts, companies may also invest in innovative technologies like artificial intelligence (AI) and data analytics. These technologies enable the analysis of vast amounts of data, including weather patterns, wind speeds, and energy consumption trends, to optimize turbine performance and enhance energy production. Machine learning algorithms can identify patterns and make real-time adjustments to maximize energy output and minimize downtime.

In conclusion, research and development for designing and engineering efficient and innovative wind turbines involves substantial costs but is essential for the success of small-scale wind energy solutions. By continuously investing in R&D, businesses can stay at the forefront of technological advancements, deliver customized solutions, and contribute to the widespread adoption of renewable energy sources.

2. Purchase and installation of manufacturing equipment and machinery for producing wind turbines.

The purchase and installation of manufacturing equipment and machinery for producing wind turbines is a crucial step in starting a small-scale wind energy solutions business. It involves investing in high-quality equipment that can efficiently manufacture wind turbines to meet the demand of residential areas, farms, and small businesses across the US.

The cost of purchasing and installing manufacturing equipment and machinery can vary depending on various factors, including the size and capacity of the manufacturing facility, the number of wind turbines to be produced, and the level of automation in the production process. On average, the cost can range from $500,000 to $1 million . This includes the cost of the equipment, installation, and any necessary modifications to the facility.

Some examples of the manufacturing equipment and machinery required for producing wind turbines include:

• Blade manufacturing equipment: This includes equipment for shaping and molding the blades, such as molds, cutting machines, and curing ovens. The cost of blade manufacturing equipment can range from $100,000 to $500,000.
• Generator manufacturing equipment: This includes equipment for producing generators, such as winding machines, assembly machines, and testing equipment. The cost of generator manufacturing equipment can range from $100,000 to $300,000.
• Tower manufacturing equipment: This includes equipment for fabricating and assembling the towers, such as welding machines, cutting machines, and painting equipment. The cost of tower manufacturing equipment can range from $100,000 to $500,000.

In addition to the cost of equipment, there are also ongoing costs associated with maintenance and repair of the manufacturing machinery. These costs can include regular inspections, replacement parts, and repairs. It is important to budget for these expenses to ensure the smooth operation of the manufacturing process.

Overall, the purchase and installation of manufacturing equipment and machinery for producing wind turbines requires a significant upfront investment. However, with the growing demand for renewable energy solutions, the potential for long-term profitability and positive environmental impact makes it a worthwhile endeavor for entrepreneurs in the wind energy industry.

3. Acquisition of raw materials and components necessary for turbine production.

When starting a small-scale wind energy solutions business, one of the crucial aspects to consider is the acquisition of raw materials and components necessary for turbine production. The cost of these materials can vary depending on factors such as the size and complexity of the turbines, the quality of the components, and the scale of production.

The average cost of raw materials and components for small-scale wind turbines can range from $10,000 to $50,000 . This includes the materials needed for turbine blades, tower structures, generators, control systems, and electrical components.

For instance, the cost of turbine blades, which are usually made of fiberglass or carbon fiber, can range from $5,000 to $15,000 per blade. The tower structures, essential for supporting the turbine, can cost $10,000 to $30,000 depending on their height and construction materials.

Additionally, the cost of the generator and control systems can vary significantly depending on the specifications and brand chosen. On average, these components can cost $5,000 to $10,000 . Electrical components, such as wiring, switches, and inverters, can add further costs ranging from $2,000 to $5,000 .

To ensure the quality and reliability of the raw materials and components, it is important to establish partnerships with reputable suppliers. This may involve conducting thorough research, comparing prices, and evaluating the reputation and track record of potential suppliers.

It is also essential to consider importing certain components and materials if they are more cost-effective or of superior quality. However, it is important to factor in additional costs such as shipping, customs duties, and import taxes when calculating the overall expenses.

Moreover, keeping track of the latest trends and advancements in the wind energy industry can help identify cost-effective alternatives or new materials that may enhance the performance and efficiency of the turbines. Utilizing innovative materials or components can contribute to the overall sustainability of the business and ensure competitiveness in the market.

4. Initial setup costs for establishing a production facility and office space.

Starting a small-scale wind energy solutions business requires careful planning and investment in a production facility and office space. The initial setup costs for these essential components can vary depending on several factors, including location, size of the facility, and equipment requirements.

On average, the cost of establishing a production facility for manufacturing wind turbines ranges from $500,000 to $1 million USD . This cost includes the purchase or lease of a suitable building or land, installation of necessary production machinery, and obtaining permits and licenses. Additionally, expenses for renovating the space, installing utilities, and setting up safety measures should be taken into account.

When it comes to office space, the costs are relatively lower compared to the production facility. Renting or leasing an office can range from $10 to $50 per square foot per year. The size of the office, location, and amenities provided can all impact the cost. Other expenses to consider include furnishing the office, setting up communication systems, and acquiring necessary office equipment.

It is important to note that the initial setup costs mentioned above are just estimates and can vary significantly based on specific circumstances. For example, establishing a production facility in an urban area with higher real estate prices may increase the costs. Similarly, opting for a larger office space with additional amenities can also impact the expenses.

Moreover, it is advisable to consult industry experts or companies that specialize in small-scale wind energy solutions to get a more accurate estimate of the initial setup costs. They can provide guidance based on market trends, equipment prices, and other factors that may affect the overall expenditure.

• Example 1: A small-scale wind energy solutions company in a rural area may opt for a smaller production facility and find a cheaper office space, resulting in lower setup costs.
• Example 2: On the other hand, a company aiming for rapid growth and high production capacity may invest in a larger facility and a more spacious office, leading to higher initial setup costs.

5. Investment in marketing and advertising to promote the business and reach target customers.

Investing in marketing and advertising is essential for promoting the small-scale wind energy solutions business and reaching its target customers. By implementing effective marketing strategies and campaigns, the company can raise awareness about its environmentally-friendly and cost-effective wind turbines, attract potential customers, and establish a strong brand presence in the market.

According to recent statistical information, the average investment in marketing and advertising for a small-scale wind energy solutions business ranges from $10,000 to $50,000 annually. This amount typically covers various marketing activities, such as creating a professional website, designing and printing brochures, developing online advertisements, participating in industry trade shows and exhibitions, and implementing targeted social media campaigns.

The funds allocated to marketing and advertising should be used strategically to maximize their impact. For example, the company can focus on digital marketing channels, such as search engine optimization (SEO) and pay-per-click (PPC) advertising, to increase online visibility and attract potential customers actively searching for renewable energy solutions. By investing in targeted Google Ads or Facebook Ads campaigns, the business can reach specific demographics and geographical areas that align with its target market.

Furthermore, partnering with local environmental organizations, renewable energy associations, and sustainability-focused events can provide opportunities for the business to promote its wind turbines to like-minded individuals and communities. Sponsoring educational workshops or giving presentations on the benefits of wind energy solutions can help establish credibility and enhance brand recognition.

To track the effectiveness of marketing investments, it is crucial to regularly analyze key performance indicators (KPIs), such as website traffic, conversion rates, and customer inquiries. This data will provide insights into which marketing channels and campaigns are yielding the best results and help optimize future marketing strategies.

• Investment in marketing and advertising is vital for promoting a small-scale wind energy solutions business.
• On average, businesses allocate $10,000 to $50,000 annually for marketing and advertising expenses.
• Strategic use of digital marketing channels and partnerships with environmental organizations can enhance brand visibility.
• Monitoring key performance indicators (KPIs) is crucial for evaluating marketing campaign effectiveness.

6. Training and hiring qualified personnel to handle turbine installation, maintenance, and repair services.

Training and hiring qualified personnel is crucial for ensuring the successful installation, maintenance, and repair of wind turbines. Skilled technicians are essential to optimize the performance and longevity of the turbines while ensuring the safety of both the technicians and customers.

The cost of training and hiring qualified personnel can vary depending on factors such as the level of expertise required, geographical location, and market demand for skilled technicians. On average, the cost of providing comprehensive training and certification for wind turbine technicians can range from $10,000 to $30,000 per employee . This includes both theoretical and hands-on training to equip technicians with the necessary knowledge and skills.

When hiring qualified personnel, it is important to consider salaries and benefits to attract and retain skilled individuals. The average annual salary for wind turbine technicians in the United States is approximately $54,370 . However, this amount can vary based on factors such as experience, location, and company size.

In addition to salaries, other costs associated with hiring qualified personnel include employment taxes, insurance, and any additional benefits provided. These costs can range from $5,000 to $10,000 per employee per year , depending on the company's policies and the specific requirements of individual employees.

To ensure ongoing expertise and stay up-to-date with the latest industry advancements, continuous training is essential. Investing in regular training programs and certifications for technicians can cost approximately $2,000 to $5,000 per employee annually.

• For example, a small-scale wind energy solutions business looking to hire and train two technicians for turbine installation and maintenance can expect to spend around $20,000 on training and certification for both individuals.
• When considering annual costs, including salaries, taxes, insurance, and benefits, the business might allocate an additional $100,000 per year for these two employees.
• Furthermore, with ongoing training and certification expenses, the company might budget an additional $4,000 per year for both technicians, ensuring their knowledge and skills remain up-to-date.

By investing in training and hiring qualified personnel, small-scale wind energy solutions businesses can ensure the efficient and safe operation of wind turbines, providing reliable services to their customers while contributing to the growth of the renewable energy sector.

7. Purchase of vehicles and transportation equipment for delivering turbines to customers' locations.

Purchasing vehicles and transportation equipment is an essential aspect of running a small-scale wind energy solutions business. These assets enable the smooth delivery of wind turbines to customers' locations, ensuring timely installation and customer satisfaction.

When it comes to the cost of purchasing vehicles and transportation equipment, it largely depends on the specific requirements of the business. Factors such as the number of turbines being delivered, the distance to customers' locations, and the terrain to be covered can influence the investment necessary.

Typically, the budget for purchasing vehicles and transportation equipment can range from $50,000 to $150,000 or more, depending on the scale of the operations. This budget includes the cost of acquiring utility trucks, trailers, cranes, and other necessary equipment for safe and efficient transportation.

For example, a small-scale wind energy solutions business may opt to purchase a utility truck with a towing capacity of at least 10,000 pounds to transport wind turbines. Additionally, a trailer suitable for carrying the size and weight of the turbines may cost around $10,000 to $20,000, depending on the specific requirements.

Moreover, investing in specialized equipment such as cranes or lifts can be necessary to safely unload and install the wind turbines at customers' locations. The cost of such equipment can vary significantly, ranging from $20,000 for a smaller crane to over $100,000 for a larger, more powerful one.

It is crucial for small-scale wind energy solutions businesses to include the costs of purchasing vehicles and transportation equipment in their overall budget. This investment ensures the reliable and efficient delivery of turbines, contributing to customer satisfaction and the successful operation of the business.

8. Investment in advanced technology and software for efficient project management and data analysis.

Investing in advanced technology and software is crucial for the success of a small-scale wind energy solutions business. These tools not only streamline project management processes but also enable efficient data analysis for better decision-making. The costs associated with this investment can vary depending on the specific requirements and the scale of the business.

On average, small-scale wind energy solutions businesses spend around $10,000 to $50,000 on advanced technology and software for project management and data analysis. This includes the purchase and installation of software programs, hardware equipment, and necessary infrastructure. It is essential to consider the scalability of these investments to accommodate future growth and expansion.

For example, a business may invest in project management software that allows for effective task delegation, progress tracking, and resource management. This could cost around $5,000 to $10,000 initially, including licensing fees and implementation costs. Similarly, data analysis software for monitoring and analyzing wind turbine performance and energy production may range from $2,000 to $15,000 depending on the complexity of features.

Furthermore, an additional cost to consider is the training and education of employees to effectively utilize the technology and software. This can include hiring professionals who specialize in project management and data analysis or providing training programs for existing staff members. Small-scale wind energy solutions businesses typically allocate a budget of $5,000 to $20,000 for employee training and education in advanced technology and software.

In summary, investing in advanced technology and software for efficient project management and data analysis is essential for the success and growth of a small-scale wind energy solutions business. The costs associated with this investment can vary depending on the specific requirements and scale of the business, but on average, it ranges from $10,000 to $50,000. It is important to consider the scalability of these investments and allocate a budget for employee training and education to maximize the benefits of these tools.

9. Legal and administrative fees associated with obtaining necessary licenses, permits, and certifications.

When starting a small-scale wind energy solutions business, it is crucial to obtain the necessary licenses, permits, and certifications to operate legally and ensure compliance with regulations. These legal and administrative requirements may vary depending on the location and specific industry regulations in the United States.

The cost of obtaining licenses, permits, and certifications can range from a few hundred to several thousand dollars. This includes fees for application processing, approvals, and inspections. For example, obtaining a general business license might cost around $50 to $400, depending on the state and local requirements.

In addition to general business licenses, specific permits are also necessary to operate a wind energy solutions company. This may include obtaining permits for construction, electrical work, and environmental impact assessments. Costs for these permits can vary significantly depending on the location and complexity of the project.

For instance, a construction permit might cost around $500 to $2,000, while an environmental impact assessment can range from $1,000 to $10,000. It is important to consult with local authorities and professional experts to determine the specific permits required and their associated costs for your small-scale wind energy business.

Certifications and accreditations are another important aspect of the legal and administrative requirements. For example, becoming certified as a qualified wind turbine installer by recognized organizations such as the North American Board of Certified Energy Practitioners (NABCEP) can enhance credibility and provide assurance to customers. However, obtaining such certifications may involve additional costs, including application fees and examination fees, which can range from $500 to $2,000.

It is essential to factor in these legal and administrative fees when budgeting for the start-up costs of your small-scale wind energy solutions business. Allocating funds for licenses, permits, and certifications will ensure compliance with regulations, minimize potential legal issues, and build trust with customers and stakeholders.

• General business license: $50 to $400
• Construction permit: $500 to $2,000
• Environmental impact assessment: $1,000 to $10,000
• Certification fees: $500 to $2,000

Note that these figures are general estimates and may vary depending on your location and specific circumstances. It is advisable to consult with relevant authorities and professionals to obtain accurate cost information related to obtaining necessary licenses, permits, and certifications for your small-scale wind energy solutions business.

In conclusion, starting a small-scale wind energy solutions business requires a significant investment in research and development, manufacturing equipment, raw materials, production facilities, marketing, personnel, vehicles, technology, and legal fees. The total cost to open such a business can vary depending on factors such as scale, location, and specific requirements.

It is important to carefully analyze and budget for each expense category to ensure a successful and sustainable launch. By embracing renewable energy solutions and offering cost-effective wind turbines, entrepreneurs in this sector have the opportunity to contribute to the reduction of carbon emissions and promote a greener future.

Stay tuned for our upcoming blog posts where we will delve into each expense category in detail, providing valuable insights and guidance for aspiring entrepreneurs in the renewable energy industry.

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How to succeed in the expanding global offshore wind market

Offshore wind —now widely recognized as a proven and reliable source of renewable energy—is likely to grow in the coming years. According to our research, global installed offshore wind capacity is expected to reach 630 gigawatts (GW) by 2050, up from 40 GW in 2020, and with upside potential of 1,000 GW in a 1.5° pathway scenario. 1 McKinsey Global Energy Perspectives proprietary model.

About the authors

Rapidly expanding government commitments and technological progress are contributing to the positive outlook in established markets and countries new to offshore wind. More companies are pursuing offshore wind projects, some of which may involve challenges and risks, including commercial requirements from authorities, difficult project economics, and the requirement to build or bolster capabilities.

This article describes the offshore wind opportunity, progress at the regional and country levels, and tailwinds that could support growth. It also discusses the challenges companies could face and how success in four areas can help them win auctions, execute projects, and support profitable growth.

Global support and technological progress fuel growth in offshore wind

All regions globally are expected to contribute to growth in offshore wind, which can help curb climate change (Exhibit 1). Europe is starting from the largest base (25 GW in 2020) and is expected to increase capacity by 7 percent annually to 190 GW in 2050 in the base case.

The Asia–Pacific region (APAC), which had 11 GW of installed offshore wind in 2020, is projected to strongly increase its capacity, surpassing Europe, the Middle East, and Africa (EMEA) by the mid-2030s and installing 410 GW by 2050 in the base case, including 240 GW in Mainland China. In Asia, Taiwan has positioned itself as the offshore wind pioneer, alongside Mainland China. Japan issued its third tender—the instrument most governments use to allocate offshore wind capacity—in December 2021. 2 Adnan Durakovic, “Japan launches third offshore wind auction,” OffshoreWIND.biz, December 10, 2021. Australia, South Korea, and Vietnam are also beginning to act on their ambitions.

Offshore wind in the Americas is still in its infancy, but the region is projected to build approximately 35 GW of capacity by 2050. 3 Global Energy Perspective 2021 , reference case, McKinsey, January 2021. In March 2021, US President Joe Biden issued an executive order calling for 30 GW of offshore wind capacity to be installed by 2030. Complementing the federal trend, states with access to marine areas suitable for offshore wind have set ambitious state-level targets. While much of this activity is taking place on the East Coast, areas in California, the Gulf of Mexico, Alaska, and Hawaii also are starting to recognize their offshore wind potential, including in floating technologies.

Meanwhile, many other countries are exploring offshore wind, including Azerbaijan, Brazil, Canada, Colombia, India, Oman, the Philippines, Sri Lanka, and Trinidad and Tobago. 4 “New program to accelerate expansion of offshore wind power in developing countries,” World Bank, March 6, 2019.

Technological progress is also boosting the outlook for offshore wind. Until recently, turbines have been installed onto bottom-fixed foundations that are grounded in waters with typical depths of up to 50 meters, requiring a relatively shallow continental shelf. Newer, floating foundations, however, can be installed irrespective of the terrain that lies below and may become viable for water depths of 1,000 meters and beyond 5 “Tetra offshore foundations for any water depth,” Stiesdal, accessed February 1, 2022. —an advancement that increases the viable sea area for offshore wind by a factor of five. 6 “Overview of floating offshore wind (text version),” National Renewable Energy Laboratory, Office of Energy Efficiency and Renewable Energy, US Department of Energy, February 26, 2020. France has already completed a tender for its first commercial floating project. Italy has identified more than 17 GW of offshore wind potential, 70 percent of which lies in deep waters requiring floating foundations. 7 Alessando Ferro, “L’ ‘impero’ dell’eolico off shore dell’Italia,” Il Giornale , January 2, 2022.

Additionally, excess offshore wind capacity can now serve as an alternative fuel source for hydrogen electrolysis, a versatile energy storage, transmission, and fuel technology that can be used to decarbonize many hard-to-abate industries and applications. Because electrolysis is so capital intensive to build, companies are eager to maximize utilization, an objective that offshore wind also supports due to its high capacity. In 2021, Denmark approved a project to construct an offshore hub with up to 10 GW of capacity in the form of an artificial island in the North Sea that, using on-site electrolyzers, can store electricity and produce green hydrogen. 8 “Denmark parliament approves giant artificial island off Copenhagen,” BBC News, June 4, 2021.

Finally, the power rating of wind turbines is growing significantly. Turbines with a capacity of more than 15 megawatts (MW) are expected to be available within five years. In comparison, the average turbine size installed in 2020 was around 8 MW. The leading three Western OEMs have announced that models in the range of 13–15 MW will be available for installation by 2024. 9 John Parnell, “Vestas launches world’s largest turbines as ‘big 3’ competition ramps up,” Greentech Media, February 12, 2021; “GE Renewable Energy’s Haliade-X prototype starts operating at 14 MW,” GE, October 5, 2021.

As a result of these advancements, the levelized cost of electricity (LCOE) for offshore wind is falling substantially, from around €150 per megawatt-hour (MWh) in 2015 to a projected less than €50 per MWh by around 2024. 10 Based on the auction price of the United Kingdom’s third contract-for-difference tender, which is expected to be commissioned around that time. In fact, 2021 has turned out to be a defining year for offshore wind. Established offshore wind veterans and oil majors, including BP, Equinor, Shell Energy, and TotalEnergies, have announced ambitious pipeline plans (Exhibit 2). This is advantageous because much of the capacity announced through 2030 had already been auctioned by the beginning of 2022.

Companies pursuing offshore wind can expect challenges

The industry’s growth prospects and the race to net-zero emissions are attracting more companies with adjacent capabilities. In addition to offshore wind veterans, utilities, oil majors, and other large capital project developers are entering the market.

Along with increasing competition, governments are strengthening commercial requirements that apply to companies bidding for offshore wind projects. Some governments use tenders to determine either the electricity price for a long-lasting offtake agreement 11 In project financing, an agreement to purchase all or a substantial part of the output or product produced by a project. or the seabed lease price. In some geographies, this has led to inflated seabed lease prices. Along the US Atlantic coast, for example, lease prices increased more than tenfold from 2017 to 2018. 12 $74 per acre at area North Carolina WEA OCS-A 0508 in 2017; $1,059 per acre at area Massachusetts WEA OCS-A 0521 in 2019. Companies are also trying to improve their competitive positions with low offtake pricing (Exhibit 3).

In several recent European tenders, zero-subsidy bids have won capacity. A recent tender in Denmark even required what could be interpreted as developers making payments to the government in the form of a bid that included full construction of both generation and transmission assets.

After being awarded capacity, some companies may face risks to their capital-project development costs. Offshore wind projects typically take several years to complete but are based on cost calculations made months in advance of the auction—and several years before the project is commissioned into service. In the meantime, raw-material prices fluctuate; for example, prices for steel, which makes up 70 to 80 percent of the total mass of each offshore wind turbine, were at all-time highs for most of 2021. 13 Grace Donnelly, “Record-high steel prices could hamper renewable rollout in near-term,” Emerging Tech Brew , March 28, 2022. Additionally, some construction equipment and wind turbine installation vessels (WTIVs) are scarce for the larger turbine sizes that are being deployed; globally, there are only about ten WTIVs that can accommodate ten-MW turbines.

Moreover, many offshore wind projects require extensive upgrades to port infrastructure and local supply chains, partly based on explicit government requirements that aim to create local jobs. In the face of this increasing variability and uncertainty, offshore wind participants need to build capabilities in several areas to effectively participate.

Strategies to support growth in offshore wind

Established producers and newcomers can overcome the challenges by committing to excellence along the offshore wind value chain by excelling in several foundational, high-value areas (Exhibit 4).

The goal of development is to open new markets, acquire strong sites, and succeed at auctions. Currently, local markets can be divided into two archetypes with respect to development. In some countries, such as the United States and the United Kingdom, sites are selected and leased by government entities, and then developed by companies to secure remuneration at official capacity tenders for those locations. In other countries, such as Denmark and the Netherlands, sites are centrally developed by government entities, and offshore wind bidders then compete in the tender process for one or several locations. In both archetypes, the starting point for success in offshore wind is a clear strategy. Excellence in development also demands bidding prowess and a smart approach to predevelopment, such as building connections with the local community.

Clear strategy: A clear offshore wind strategy starts with a company deciding which technologies to include in its portfolio. Solely focusing on offshore wind is a high-stakes, high-capital-expenditure undertaking that poses more clustered risk than a diversified portfolio that also includes, for example, solar photovoltaic (PV) and onshore wind.

Second, companies could consider which geographic markets to target for participation. Offshore wind markets vary widely, especially with respect to their regulatory and political environments and maturity. Viable target markets typically have regulatory environments supporting renewable energy and for offshore wind specifically. Most leaders of viable markets either have already established a market and regulatory framework or have made plans to do so. Notably, a broader portfolio comes with the upside of diversification but also with increased complexity.

Third, companies may want to understand their capabilities and limitations. For example, an experienced project developer such as an oil major may build on its extensive experience securing financing for and managing large-scale capital projects. A regulated utility may choose to build on its knowledge of local communities and institutions. Following a thorough capabilities assessment, participants can determine where and how to add capabilities (for example, develop them in-house, selectively hire, or partner with others).

Predevelopment including links to local communities: As offshore wind tender processes become more competitive, participants need to successfully manage a broad range of stakeholders. Some companies use innovative strategies to involve local communities in their offshore wind plans from the start. For example, the joint venture between Ørsted and Eversource solicited opinions from the local fishing community when scouting and monitoring sites off the coast of Rhode Island. The two companies also upgraded a fleet of local fishing boats to meet industry safety standards to minimize the risks of incidents at sea. 14 Adrijana Buljan, “Ørsted, Eversource team up with US fishermen,” Offshore WIND, May 20, 2021.

Additional complex decisions that need to be made before development may include whether and where to build a local manufacturing footprint for turbine assembly. This can be a critical differentiator for tender participants, given the economic impact on communities. Ultimately, organizations such as turbine OEMs and foundation manufacturers are responsible for building their respective manufacturing footprints, which means the offshore wind developer needs to work closely with these stakeholders and, often, to navigate and resolve competing interests.

Entering new offshore wind markets is challenging given the local knowledge required. Only a few experienced international players have managed to organically penetrate new markets around the world, although many partner with or acquire local utilities, companies, or projects to gain market entry (Exhibit 5). Notably, there could be large adjacent value pools forming for infrastructure players. For instance, in the United States, the Biden administration projects that multibillion-dollar investments in ports and vessels will be needed to meet the 2030 target. 15 “Fact sheet: Biden administration jumpstarts offshore wind energy projects to create jobs,” White House, March 29, 2021.

Implementing successful bidding: As new participants enter the market, companies could focus more time on planning and executing their bid process to improve their bid success. A thoughtful approach to auction excellence can help companies remain level-headed and focus on the critical elements of an auction.

First, participants need to establish a fact base about the auction. This involves scrutinizing the government’s core assessment criteria and auction rules. Collecting and analyzing previous auction results can provide meaningful insights into long-term price trends to inform bid development. Auction participants can also attempt to estimate ranges of bids from competitors for a given auction. Combining deep industry intelligence, competitive economics, and informed assumptions can help participants anticipate competitors’ likely auction behaviors. By using publicly available information, auction participants can approximate competitors’ walk-away prices, hurdle rates, and minimum required rate of return on a project.

As new participants enter the market, companies could focus more time on planning and executing their bid process to improve their bid success.

Second, after establishing a deep understanding of competitors, companies may want to determine their own valuation of the project, including a business case for capital expenditures, operating expenditures, and commercial risk. Best practices include defining the specific walk-away price for a given lease by solving backward from the expected offtake price and taking into account project risks along the value chain.

Multitechnology integration: As the offshore wind industry matures, governments and experienced companies are increasingly linking offshore wind projects to a specific use rather than simply feeding into the larger electricity grid. For example, integrating offshore wind with hydrogen electrolysis will become more commonplace; developers may benefit from investing in technology integration capabilities. Ørsted recently announced plans to connect one of the world’s largest electrolyzer projects to 2 GW of new offshore wind capacity in the North Sea. It plans to power the electrolysis process with electric power from offshore wind and thus enable the build-out of infrastructure required to sustainably produce steel, ammonia, ethylene, and other hydrogen-based chemicals and materials in Europe. 16 Stefan de Bruijn and Michael Korsgaard, “Ørsted to develop one of the world’s largest renewable hydrogen plants to be linked to industrial demand in the Netherlands and Belgium,” Ørsted, March 31, 2021.

Securing offshore wind capacity is the first step in a long journey. The next step is to effectively execute engineering, procurement, construction, and installation (EPCI) processes to achieve the cost targets that informed the successful auction strategy.

Fit-for-purpose operating model: Successful offshore wind projects require a well-structured organization and a detailed strategy for in-house versus outsourced activities. Key elements—including the organizational structure, staffing model, and governance—must be designed with the company’s core competencies and the specific opportunity in mind.

EPCI package structure: Participants can consider a number of offshore packaging archetypes. For example, in a full EPCI model, the developer contracts both supply and installation for each group of components (most importantly, turbine, wind-turbine-generator foundation, array cables, export cables, and offshore substations). In multicontracting, in contrast, the developer contracts out supply and installation separately for all components.

In mature markets, offshore wind veterans can often achieve cost advantages by using a multicontracting approach—procuring key components or packages directly from suppliers and handling installation separately (Exhibit 6). A multicontracting strategy, however, requires a complete understanding of the offshore wind value chain, good availability of supply and installation resources, and deep in-house project execution capabilities—which is why it is typically only available to experienced participants. Furthermore, not all local markets offer the supplier landscape required to contract out in packages using this strategy.

Procurement excellence: Material costs have been rising, mostly driven by an unprecedented surge in steel prices, making procurement excellence an essential skill for offshore wind developers. Overall, material cost fluctuations create uncertainty that can pose a significant risk to projects. To decrease fluctuations and lower EPCI costs overall, offshore wind developers can employ advanced procurement tools and strategies to ensure low cost and early technology access. These include rigorous spend analysis, clean sheeting—analyzing a product’s cost structure from top to bottom to optimize design and capture savings—and excellence in supplier negotiations.

Claims management excellence in construction: Excellence in construction in a number of key areas, including claims management, is crucial. Claims can amount to 10 to 20 percent of total contract cost. Best-in-class claims management can decrease penalties and build thriving, collaborative relationships with contractors. This includes having the right organizational structure and standardized processes in place for recording and processing claims; creating transparency to identify, analyze, and counteract the most common, high-value causes of claims; and changing the culture to anticipate and prevent claims—rather than simply respond to them—by collecting evidence on contractor behavior and carefully reviewing contract terms to eliminate clauses that previously led to claims. These practices can help limit the overall number of claims.

Operations and maintenance (O&M) excellence can be a major source of competitive advantage. Based on today’s installed capacity in Europe, our research suggests there would be a savings opportunity of more than €600 million per year if all participants adopted best-in-class O&M practices. Turbines to be installed in the future will have significantly more mature technology but also more complexity resulting from significantly larger blades, gearboxes, and generators, for example.

O&M costs are hard to predict and heavily based on assumptions such as the number of major component failures expected over a 20- to 30-year asset lifetime. Given the significant reduction in offshore wind capital expenditure over time and the longer lifetime of assets, achieving low O&M cost and reliable performance is crucial. As a starting point, companies may want to decide whether to have third parties (for example, OEMs or other O&M service providers) perform maintenance services or to perform O&M in-house.

In the case of third parties providing O&M services, rigorous performance measurement and consequence management in case of deviations from contractual obligations are key to ensure that risk and cost are adequately passed on to the service provider. If O&M is performed in-house, excellent execution based on lean principles and the use of digital technologies—for example, to enable predictive maintenance—can help bolster effectiveness.

While cost fluctuations are the norm in large offshore wind projects, government pricing mechanisms and long-term offtake agreements have historically ensured relatively stable revenues. However, going forward, the exposure of the industry to market prices (so-called merchant risk) and thus to revenue fluctuation is likely to increase significantly. More and more existing assets are leaving the subsidy phase, and new assets that are selling electricity at current wholesale prices are coming online “subsidy free.” At the same time, any additional volatility on the revenue side comes with a potentially significant impact on financing terms.

Managing merchant risk starts with defining a clear strategy: How much merchant exposure is a company comfortable with, and what share of revenues should be locked in? The question becomes even more challenging with power prices skyrocketing in some regions of the world and demand for green electricity likely continuing to surge.

For the portion of revenues that are locked in, companies may want to develop the right approach to identify and secure offtake. Options for corporate offtakers range from investing outright in a project to striking deals with a limited number of large offtakers to having a broader portfolio of offtakers. For production, the company will need to decide how much to hedge and over what period of time.

Ultimately, participants could consider developing the right operating model across the front-, middle-, and back-office systems underpinning their strategy. Options include maintaining full trading and structuring capabilities in-house and outsourcing most activity while retaining a small but highly capable team in-house to avoid excessive value leakage.

Looking ahead

By the end of this decade, thousands of turbines will likely be turning along the coasts of Asia, Europe, North America, and other regions. The offshore wind industry has the potential to create significant value for companies, communities, regions, and countries while making a major contribution to reliable, low-cost, and clean electricity. Companies that intend to capture their share of this value pool have considerable work to do to build excellence along the value chain. Sizable investments—in organizations, processes, technology, and people—will be required to master the challenges ahead and to effectively compete with other players.

Florian Kühn is a partner in McKinsey’s Oslo office, Friederike Liebach is a consultant in the Frankfurt office, Tim Matthey is a consultant in the Boston office, Andreas Schlosser is a partner in the Munich office, and Jakub Zivansky is an associate partner in the Prague office.

The authors wish to thank Peter Claus, Emil Hosius, Nadine Janecke, Boris Naar, Fridolin Pflugmann, Bogdan Rozhkov, Joscha Schabram, Thomas Schrade, Christian Staudt, Humayun Tai, Alexander Weiss, and Raffael Winter for their contributions to this article.

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The United States is home to one of the largest and fastest-growing  wind markets  in the world. To stay competitive in this sector, the Energy Department invests in wind  research and development projects , both on land and offshore, to advance technology innovations,  create job opportunities  and boost economic growth.

Moving forward, the U.S. wind industry remains a critical part of the Energy Department’s all-of-the-above energy strategy to cut carbon pollution, diversify our energy economy and bring the  next generation  of American-made  clean energy technologies  to market.

The Wind Energy Technologies Office leads the nation's efforts to improve the performance, lower the costs, and accelerate the deployment of wind power technologies.

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