More than 100 solar-related investment opportunities have launched on equity crowdfunding platforms since 2018. Today, it’s pretty easy for founders to launch solar-related startups. Photovoltaic panel technology is mature and getting continuously cheaper.
But the competition in the solar industry is fierce. Few startups have what it takes to grow into industry giants. So it’s not easy for investors to choose the right solar startups to put their money into.
So to help you find the right solar investments, I’ll share three trends in the solar sector that are projected to grow in the next decade. Because when there’s a need for innovation, startup growth is usually right around the corner.
Solar Investment Opportunity No. 1: Increasing Distributed Energy Production
Utility-scale solar farms are a great way to reduce greenhouse gas emissions and help individuals access green electricity. But they’re not the only way to decarbonize electricity production. Many consumers and businesses are installing solar systems without having to wait for the grid to completely decarbonize. It helps them save money and access reliable electricity. And it benefits everyone, as it increases the speed of electricity decarbonization and sometimes reduces the need for costly new infrastructures like transmission lines.
Nearly 4% of homes in the U.S. have installed solar panel systems. The residential solar market is set to grow at a rate of 15.3% annually. As an increasing number of houses join the solar movement, startups and more mature companies are developing new technologies to improve these systems. Investors can look out for innovations regarding batteries — like Joule Case’s stackable and portable solution — inverters, or even electric vehicle (EV) chargers. The publicly traded company Enphase Energy recently commercialized an emerging technology allowing for bidirectional EV charging. Enphase’s EV chargers can charge a car during the day and use the car’s battery to power a home — or even send the energy to the grid to reduce homeowners’ electricity bills.
For homes that can’t use solar panels on their roofs, community solar is a growing solution. Community solar companies install small solar farms in various areas to give households the opportunity to own part of a solar project and power their homes with cheap and clean energy. A few companies are part of this trend: Neighborhood Sun — which KingsCrowd recently rated as a Deal to Watch — RTH Solar and Solar for Us.
Finally, roofs and community farms aren’t the only places for solar panels. Startups are putting solar panels everywhere: on cars, on public bathrooms, like Throne (a Deal to Watch currently raising on Wefunder), and even in stores, like SolarGaps. Though some of these solar-augmented objects can be pricey and might have trouble reaching a large customer base.
Solar Investment Opportunity No. 2: Developing Alternatives to Lithium-Ion Energy Storage for Daily Use
Lithium-ion batteries are a great solution for building compact and efficient energy storage solutions. That’s why they’re used to power smartphones, earbuds, and electric cars. But they have their own challenges. Lithium extraction is highly pollutive and emits large quantities of greenhouse gasses. Large lithium-ion batteries can also be a fire hazard and are too expensive for large-scale storage of more than four hours.
Therefore, when it comes to storing energy in houses or renewable energy farms to provide energy at night, lithium-ion batteries might not be the best choice. So a few startups are providing alternatives.
StorEn Technologies, a recent Neutral Deal, sells vanadium batteries for residential energy storage. They can charge by sunlight and deliver electricity at night. While vanadium batteries take up more space than lithium-ion batteries, vanadium lasts up to three times longer than lithium-ion with no degradation. So it’s cheaper in the long term.
Qnetic is trying to disrupt large-scale energy storage systems. Ideally, energy storage solutions would be able to power the grid all night long to avoid grid regulators having to rely on natural gas peaker plants. Qnetic’s solution is a large-scale flywheel that can easily power the grid for eight hours.
Solar Investment Opportunity No. 3: Expanding Green Electricity Access in Emerging Countries
While many of us may take for granted that we can easily plug in our phones, watch our TVs, and use our microwaves, 770 million people in the world live without access to electricity — mostly in Africa and Asia. The drop in solar panel costs is an opportunity for startups to help households, villages, schools, and small businesses in underserved areas. Easy-to-install solar+battery systems can bring solar energy anywhere — as long as customers can finance them.
This is what Amped Innovation, previously rated a Top Deal, aims to do. The company builds solar+battery systems specifically designed for tough living conditions in emerging countries. For example, Amped Innovation’s battery doesn’t have a fan, as fans can be damaged by dust. Its glue is ant-resistant. And, most importantly, the startup offers a pay-as-you-go system that allows customers to pay for their systems over a couple of months with no interest.