Passive income is the goal of anyone trying to make money. An initial investment, and then the money just rolls in. That, in a broad, general sense, is the case with solar panels and what is known as net metering. With sustainable energy practices the way the world will likely proceed with energy production, investing early could be key to making a profit while there is still profit to be made.
If you watch the meter on the side of your house or business, it spins around according to how fast you are using electricity. But what if it spun the other way? That’s what net metering is in a nutshell. Instead of only using energy, solar panels are creating excess energy. This means two things: That you don’t have an energy bill, and that you can sell the excess energy.
The first is pretty self-explanatory. You won’t be billed for using energy because, essentially, you aren’t actually using any. If you are creating an excess, that means you aren’t using all you are generating, and there’s no point in charging you. Hiring a company to install solar panels is a pretty easy process, and there’s often grants and subsidies to be found if you dig around, giving you very little excuse for personal solar panels.
While companies that provide renewable energy don’t get the same tax breaks as fossil fuel companies, a bill was introduced in October to level the proverbial playing field. However, if this isn’t the sole focus of your company, it probably won’t have a huge affect.
All of this is a long way of getting to the second point: Making money off of excess electricity.
In the United States, whether you can sell excess energy is up to state laws and your local energy provider. For the most part, you will likely be able to sell, though there may be a cap to how much you can sell in a year.
You can find information regarding your state’s rules at the Department of Energy’s website. For example, in California, Pacific Gas and Electric has the highest cap at 2,409 megawatts. Credits for excess energy can either be carried over and used the next month, or sold to PG&E. There is a tariff for the energy, but other than a one-time interconnection fee, it’s relatively small — just a few cents per kilowatt-hour.
Selling as a Business
Can you sell excess solar energy if, instead of a private citizen with solar panels on your roof, you are part of a company with solar panels? In 2016, Apple won the right to sell power from three of its facilities.
That, in and of itself, isn’t rare, as the Federal Energy Regulatory Commission allows companies to sell excess electricity to their local energy provider, just like private citizens. But Apple was able to obtain waivers from FERC in order to sell directly to six regional markets at the market rate, bypassing the energy company middleman.
Speaking of cutting out the middleman, that’s exactly what the future of excess solar energy could be. In Brooklyn, a startup is allowing its customers to sell electricity directly to each other. The technology uses a blockchain, the same technology that creates a ledger for Bitcoins, as a way of keeping track and validating purchases.
This isn’t limited to the United States, either. Companies offering peer-to-peer electricity trading are popping up in Bangladesh, Germany, the UK, China, Africa, and Australia, and more — and still growing.
Whether you are a company or a consumer looking to earn some passive income without a major upfront investment, solar could be the way to go. Be sure to check with your local government and utilities to ensure you can actually sell the electricity. Otherwise, enjoy not having an energy bill, while the electric company pays you instead!