What is solar energy and how is it generated into electricity?

While we are still far from eliminating fossil fuels, renewable energy is gradually reducing our dependence on polluting sources. In 2021, sources such as wind and solar provided about 10% of the world’s electricity. This trend shows that the move towards a cleaner future is underway.

In addition to its environmental benefits, solar energy can provide significant opportunities for businesses. Here are some of the main benefits of using this energy source:

1. The sun, an endless source of energy

The most obvious advantage of solar energy is that the sun isn’t going to go out anytime soon. Scientists estimate that the sun will continue to shine for at least another 5 billion years, so there’s no need to worry about running out of this energy source.

2. Panel efficiency is improving

The efficiency of solar panels has improved dramatically over the years. In 2012, the highest efficiency of solar cells was just under 18%, but by 2020, researchers at NREL had managed to create a device with an efficiency of 47.1%. Although this record has not yet been put into mass production, the average efficiency of current panels is between 15 and 20%—enough to power many businesses every day.

3. Significant reduction in energy bills

Solar panels help businesses become more resilient to fluctuations in electricity prices. Because the electricity is generated on-site, dependence on traditional suppliers is reduced and costs are reduced.

According to EnergySage, businesses that previously spent about $1,950 per month on electricity have seen their electricity bill drop to about $500 after installing a solar system. If your system produces excess energy, you can even sell it back to the grid for extra revenue—although this option varies depending on local energy regulations.

4. Significant reduction in installation costs

The cost of installing solar systems has dropped dramatically over the past decade. According to the U.S. Department of Energy, installation costs have fallen by 75% since 2010 and are still falling. Furthermore, panels last an average of 25 years, often recouping the entire investment within the first 5 to 7 years—and then the electricity is virtually free.

5. Simple and low-cost maintenance

Solar panels require little maintenance. They have no moving parts and are weatherproof. Typically, the system will remain in top condition with just a cleaning once or twice a year. This means that ongoing maintenance costs are also very low.

6. Reducing carbon footprint and being environmentally friendly

The sun is one of the cleanest sources of energy in the world. Unlike fossil fuels, solar energy does not cause air pollution or produce greenhouse gases. The carbon footprint of solar panels is up to 20 times smaller than that of coal-fired power plants.

This benefit isn’t just limited to the environment. In a Statista survey, 45% of consumers said they prefer to buy from brands that operate sustainably. 92% said they trust companies that are environmentally and socially conscious more. So using solar energy can create a real competitive advantage in the marketplace.

7. Strengthening energy security and grid independence

With the increasing volatility of fossil fuel prices and the risk of power outages, relying on solar energy can increase your business’s energy security. Because you are no longer reliant on traditional suppliers, market fluctuations affect you less.

Also, if you have an energy storage system, you can store excess electricity for use when needed—for example, on cloudy days or during grid outages—and rest assured that you will have a stable power supply.