Ask HN: How can I start a business to generate electricity?

[tareqak]

I know that the capital costs for building a working power plant of any kind are pretty high. However, I still want to learn and see what is possible.

1. What is the thinnest vertical slice of end-to-end power-generation functionality that an individual would be able deploy and maintain on their own?

2. What are the names of necessary things that I would need to learn and research?

3. What parts are too easy to dismiss early on, but are likely to bite me later on?

[WJW]

I don't want to be discouraging but if this is the level you are at right now, "deploy and maintain on your own" is very likely to get you electrocuted. Grid level electricity generation is not something to "move fast and break things" with.

That said, get acquainted with:

- How the electrical grid works. You will at the least want to have a working understanding on how generators synchronize to produce a coherent grid and how frequency regulation works. You should be able to at least immediately tell the difference between a MW and a MVAR, or to clearly explain the impact of power factor correction on transmission line capacity.

- The various different primary energy sources (fossil fuels, nuclear, wind, solar) and how they differ.

- Your local electricity grid regulator will have published rules for the local wholesale electricity market. Learn those and how to interact with them. You should probably be aware that for most markets the minimum bid size is in the order of megawatts, which is enough for about a thousand homes.

- The economics of how power generation works. Power generation has massive economies of scale and single-person initiatives are unlikely to be able to compete.

- Last but certainly not least, get yourself up to date with safety regulations. Grid level electricity will not only kill you, it will hurt the entire time too.

If you want to "just" make enough electricity for yourself, get some solar panels on your roof. I'm sorry this post is probably not what you were hoping for but electricity is really really dangerous and not something you should be going into if you don't have a firm grasp of what you are doing.

[salty_biscuits]

> The economics of how power generation works. Power generation has massive economies of scale and single-person initiatives are unlikely to be able to compete.

The only "in" for a small player is remote/rural where the cost of distribution infrastructure dominates. Also dispatchable service to provide frequency stability seems to be a niche.

[gridspy]

> Last but certainly not least, get yourself up to date with safety regulations. Grid level electricity will not only kill you, it will hurt the entire time too.

Building-level electricity is the type where a dropped spanner instantly becomes a faceful of gaseous metal. If you think you have time to feel the pain, you don't understand grid level energy yet.

[onlyrealcuzzo]

> Your local electricity grid regulator will have published rules for the local wholesale electricity market. Learn those and how to interact with them. You should probably be aware that for most markets the minimum bid size is in the order of megawatts, which is enough for about a thousand homes.

And for reference, a MW of Solar panels costs close to $1M - so this is not really a feasible industry for the average Joe to enter.

[huijzer]

> I'm sorry this post is probably not what you were hoping for but electricity is really really dangerous […].

People probably discouraged the Wright Brothers, Amelia Earhart, and Thomas Edison too for safety reasons.

Don’t be discouraged OP. If you want to do it, go for it.

[qbasic_forever]

Put solar panels on your roof and contact your energy company so they can be hooked up to provide power onto the grid and give you energy credits. Not every area allows this but from what I understand some folks make money in the summer and then that offsets the costs they spend pulling power from the grid in the winter.

You really need to do a lot of research to figure out if it's feasible and if you have enough sunlight, area for panels, etc. to make it worthwhile. There's a lot of upfront costs too with the panels, meters, and extra protections necessary for when you're interfacing with sending power onto the grid--a lot of folks need to run their system for 5-10 years or more before it breaks even and starts making them money vs. all the initial costs.

[don-code]

"Make money" in many energy markets is a misnomer, because not all markets pay out. For instance, I have home solar in Massachusetts, where I get a billing credit at the end of the month for excess generation. I can't cash that in (so I'll never be paid), but it does give me a "free" way to use electricity in the future. (Yes, I know it's not really free, because there's no return - I effectively lose money to inflation.)

I could do something economically productive with the billing credit, like charge EVs or mine crypto, but I consider that more a knock-on effect than a moneymaker.

[nathanaldensr]

Be aware that the risk of fire increases with roof-mounted solar panels. Also be aware of effects on homeowners insurance policies.

[swarnie]

For reference in the UK this is around 7.5p per KWH put in to the grid.

[engineerDave]

Depending on where you live, e.g. proximity to the equator, you will probably never recoup the initial investment or if you do the panels will probably be at their end of life when you do. So you'll never really "make money". But you will insulate yourself from demand spikes and give you an emergency backup.

[bloudermilk]

The last thing I want to do is discourage anyone from learning, but I'm afraid you're looking at this (fascinating) field the wrong way. To the extent that this is unlikely to be an interesting intellectual pursuit for you, as it's currently framed.

If you really do want to operate a business generating electricity, start by learning how the power market operates in your area. Unless you live off-grid with a high degree of autonomy, you're likely to find that there are zero opportunities for an individual to enter this market on their own. Providing stable power to the grid requires unbelievable amounts of capital, planning, compliance, person-hours, and way too many other elements to list here.

If what you're actually interested in is generating electricity for yourself or your community, the good news is this is much more approachable. Developing and operating small-scale off-grid renewable energy system for a small home is achievable with off-the-shelf components and a basic understanding of electronics. You'll still want an electrician to validate and perhaps perform some of the work, but it's all pretty basic.

If what you're actually interested in is spearheading a renewable energy campaign for a large community currently dependent on other forms of power, take a look at community solar programs and energy cooperatives. Both are in practice all over the US.

[tareqak]

Thank you very much for your kind, considerate, and cautionary response. I can totally understand that out of my depth, and I am asking the wrong questions based on my vantage point. One question that I would now add to my list of questions would be form of the 3rd question, but more like: “what are the right kind of questions I should be asking myself when approaching this broad topic?”.

I kind of want of something in between the first two potential interests. Imagine something that is like a cross between a solar panel and a night light that you plug in to an AC outlet, but that plays nice with the local power grid in every which way. Sure the amount of power it could produce would be negligible, but being able to create something that is able to feed the grid and meet all appropriate regulations for the electrical code would be an accomplishment in itself. I don’t know what the physics and capital costs behind creating something like that would be or if this idea absolutely infeasible because of the same physics and capital costs, but that is also what I am trying to learn. I am also not married to this idea at all: it is just an illustration of my level of knowledge on the subject matter as a whole, and the kinds of questions that first come to my mind.

[analyte123]

Indeed participating in a power market whatsoever (even paper trading) usually has regulatory and collateral requirements to get in the door. For example, on MISO in the US: https://cdn.misoenergy.org/Minimum%20Participation%20Require...

[chomp]

1. Depends on where you live. In the Houston area, it’s any power generation from 0 to 10MW for connecting to Centerpoint. You can generate (solar) from your home. As you approach larger numbers (like say 20 - 30 kilowatts) is going to require special design because you’ll push the limits of a single meter. The cheapest and easiest way to get started is to just offset your home usage with solar.

2. There is a tariff for interconnection, and you need anti islanding. Inspections are backlogged by 6-12 months in the area. You’ll need an electrician to draw up the plans for submission to Centerpoint.

3. Even though Texas’s power market is famously “unregulated”, it’s still very regulated. I recommend starting here: https://www.ercot.com/services/training/courses/details?name...

ERCOT has a wealth of information available so that you can get up to speed.

[alfl]

I tried this. As other commenters have pointed out the big challenge is regulatory.

That said, my approach was to find businesses or individuals as near as possible to a given piece of land (a lot I own) and see if they would buy power directly from me. I also contacted the local utility provider (as other commenters suggest) to see if I could sell them power or lease them equipment or land.

The idea was something like: find a large power consumer nearby - someone heating a hot tub, running a woodworking shop, data centre, whatever; undercut the local utility, see what the payback period would be on the capital equipment, then get a legal consult on how to paper it, then hire electricians to hook it all up.

tldr I suggest validating the market first.

[3np]

If you're comfortable sharing: Which countries was this? What was your power source(s)?

[colechristensen]

> What is the thinnest vertical slice of end-to-end power-generation functionality that an individual would be able deploy and maintain on their own?

Becoming a solar installer and engaging in some kind of revenue sharing or a loan kind of structure for getting residential or commercial customers in on it.

Building solar powered vehicle charging stations.

Building backup generation facilities for things like data centers or hospitals.

[daniel-cussen]

Oh you know what the OP could do? Two-for-one: install solar panels while simultaneously operating bouncy castles around the perimeter of the roof. So the kids beg for their parents to install solar so they get their bouncy castles for a day, birthday maybe, the synergy being that solar panel installers can fall off safely because there's a bouncy castle right there breaking their fall (I've fallen off 3 meters onto school gymnastics mattresses, it's amazing), so then you get first off no deaths from installing solar panels, meaning you get the best ratings for human death for any electricity source (it's mostly people falling off roofs, hence the bouncy castles), you don't have to transport that much weight (bouncy castles unlike bulky mattresses are just plastic balloons you can fold), it's an event and a sales thing that should work, gets people thinking. Gets the littlest people thinking. And plus it's a line item, you don't need as much liability insurance and harness shit, which is crazy expensive and often impedes the job completely, or compromises it, everything takes a lot longer and you need more experience, can't get unemployed guys off the street like the Alphabet Soup agencies in the Depression, just telling broke guys under 25 hey pick up a shovel and come along, dig holes because you're a man and you can get work done with your hands and legs and arms and feet and back.

So get on a roof and put solar panels on, you can do it! Fall off? Relax! Fall on the bouncy castle, sprained ankle at worst.

And you align solar with the future, which is to say the children.

OP please steal this idea. Please. Never give me credit, I just would love seeing a pamphlet saying "bouncy castle solar" on it, ideally handed to me in an inconvenient time and demanding my attention rudely. That level of success.

[contingencies]

AC power is very different to DC power. A great deal of the efficiency loss and cost associated with small-scale renewable power is in DC-AC conversion, grid connectivity and associated regulatory concerns. Third party professional installations for house-type solar will bundle all of this and be expensive.

More progressive installations and new builds can just go 100% DC and drop the AC and the grid entirely. Whether this is appropriate is case-dependent. It's easier if you cook, shower and heat with gas. This obviously restricts internal design decisions but is totally possible, provides better results, greatly reduces regulatory overheads and safety concerns and is closer to what we see on cruising yachts which often have combinations of wind generation, solar generation and propeller-based generation.

Another concern is energy storage methodology. If you are building a new site you can consider interesting storage technologies such as buried flywheels vs. batteries. Some of these techniques will cost more up front but function far longer with far less maintenance. Fossil-fuel based generators are a good backup option. You really need to profile the loads in terms of peak and continuous draw plus cycle time and frequency before specifying storage.

Note that distribution cabling is expensive. Both copper and aluminium are going up in price and even at wholesale rates here in China heavier gauge copper cable is USD$1.5/meter or so (bare). Cheaper aluminium cables cost about 25% of that but Al is brittle and develops resistance over time owing to surface oxidation, contributing to the probability of delayed failures.

You could start with reading your national electrical code and national building code to understand the installation applicable regulations.

[tomrod]

In regards to (2), names of necessary things on the ecosystem

If you are an an electric deregulated market:

- Utility commission (PUC, etc.). They will typically have a lot of sway in your day to day.

- Retail Electric Providers: companies that operate as hedge funds and try to buy from you cheaply and sell to customers on a spread

- Aggregators: aggregate customers that purchase energy as a bloc

- Transmission & Distribution: the wires folks

- Power market: your area will vary, but this is an open market where you can sell. Typically you'll sell forward or futures contracts of a sort. There is often a day-ahead market and a real time market as well to help plug any gaps. A power provider that can spin up quickly does well here. Someone with a bunch of airplane turbines can also help here when supply > demand if they wire their turbines up (turbine = generators, backwards). There is a lot of creative financial focus in this space since the returns are more apparent than in power generation

[uberman]

The first thing you will need is a suitable tie in to the commercial grid. This large overhead powerlines.

Without it that access, you are likely going nowhere even with a small commercial solar farm.

[liketochill]

Before that you need land on which to build your plant

[ggm]

Start by doing an electrical engineering degree, or commerce law, or take the trade route in to power engineering from the apprenticeship level up.

Think about the supply chain. Is there a consumable which you could source and supply at better margin and lower cost? Is there a niche in replacement china insulation pots for the posts and wires? Can you make a better self tensioning high current wire connector?

Think about software. Is there a gap on demand management, software for power monitoring, weather prediction.

Do you know enough about it, to take baby steps?

[dzink]

Viable business plan: Buy an abandoned strip mall in the south. Cover it with solar panels. Use the energy to fill portable batteries. Provide a EV charging service or subscription on wheels for Tesla owners or other EVs who are struggling to find charging spots or superchargers nearby. Raleigh NC, Charleston SC, etc are possible test spots and anywhere else EV infrastructure is not going on full swing.

[pomian]

I think the first question, as mentioned, in one of the previous comments, is your location. There are many opportunities in smaller, distant communities that don't have grid service, or don't have good, grid service. Those are places that have room for ideas and opportunities, hence business feasibility. Things like small river turbines, or other combined power sources, possibly wind and solar, even fuel generators as back up. The systems are not really complicated, depending on the end user. Obviously you are not trying to compete with the city of Austin or Dallas, Texas. But tiny remote villages, need electricity. Start small, and as with most successful business, then grow. Find a niche. Then expand when you see the need or opportunity. In the beginning, people without power, are happy to charge cell phones, or power a well pump. Great idea!

[AdamH12113]

Serious question: Why do you want to start a business making electricity if you don’t know anything about power generation? “Business” implies you want to make money, so what are you bringing to the table that would help you turn a profit? Capital? Land? Friends in high places? Why electricity and not something else?

[pedalpete]

I'm surprised to see this type of comment on HN. Many people have been successful because they aren't in the industry and "don't know anything". The OP is asking the question and learning, not jumping in and saying "I know how to do it better than anyone else", but because they don't have the ingrained "knowledge" of how things are done, they just may find a better way.

[liketochill]

1. Find someone who wants to buy electricity. Seriously what grid operator has open offers for proposals to connect new generation, on any scale? Start there.

2. Find land that works for building your plant. It should be near existing transmission or distribution infrastructure so you don’t have to build as much yourself, which is expensive, and it should have good road access already, so you don’t have to build as much yourself, which is expensive.

3. Get a connection study done by the utility which proves it is possible for them to accept the energy at the location you want to build your plant

4. Sign contract to sell your energy

4. Get environmental studies done to prove you won’t harm birds fish insects etc

5. Get financing and insurance

6. Contract out design and construction of your plant. Probably operation too.

The technical side is the easy part. Getting the contracts and permits in place is harder.

[brudgers]

The thinnest slice is remote power systems for off grid locations at the scale of a few solar panels, a small generator, a wind turbine, or hydroelectric…in order of increasing regulatory hurdles and real estate acquisition.

Under capitalization is most likely to bite you. That’s true of all business.

Good luck.

[tuatoru]

The thinnest slice of ... end to end...? Maintainable by one person?

Something like a microcontroller based remote weather sensing node, or a garden night-light, powered by a 1-watt PV panel. That has generation, transmission, conversion, storage and end use all in one package. End to end. Very thin. Maintainable by an individual.

A business? Hire a registered electrical engineer who specialized in Power Systems Engineering. Likely, you'll need several, because of the sub-specialties. Lawyers too. This is not 1887. We have a lot of laws about consumer and third-party safety now.

If you just want to learn about generation and distribution, get an EE degree specialising in Power Systems.

[perlgeek]

> 3. What parts are too easy to dismiss early on, but are likely to bite me later on?

Regulation. (Highly depends on where you live, though).

[DoreenMichele]

Some thoughts from some random internet stranger:

1. Connectivity is an issue that isn't power generation per se but a potential business opportunity. From what I gather, the power grid would be more stable if we had better connectivity and the isolation of Texas from other parts of the US has been a factor in some of their issues of late.

2. Electricity generation is very much an environmental issue. Regulation is a big thing generally, but environmental regulation is something likely to bit you at some point. If you can do something that is so high quality in that regard that it is likely to exceed any standards that may be instituted in the near future, you would have an edge on competitors.

3. Energy storage is a big issue. We are moving towards solar and wind, both of which put out energy but don't create stored energy, unlike historical hydro which dammed up water and thus created a store of potential energy that could be adjusted at times.

4. Both solar and wind are variable in their ability to produce energy. Wind power has the issue that when a big storm comes, they may need to shut things down to prevent damage to the system and cannot handle the potential big influx of power the high winds represent. We are apparently failing to capture a lot of value in that regard.

5. Wind and solar tend to be complementary but I don't know how often they get packaged together for off-grid applications. It's common for it to be windier than usual when the sun is not available (during storms, shortly after dark).

I think there is lots of ways you could create new businesses related to energy. I encourage you to find some means to just start reading, come up with your own ideas of where some of our energy generation pain points are and go from there.

People tend to do more of the same old, same old. If you find some new angle, keep it quiet until you get traction etc, you can potentially make a mint and also go down in history as some kind of hero for solving this. We currently do a lot of hand-wringing about how there are too many people, there are not enough resources to support them, we are doomed, we need to stop consuming so much electricity, etc ad nauseum.

Best of luck.

[alfl]

A condo building I know of runs a bioreactor / waste water compost. They sell heat to a nearby hotel (ie, warm their water off-site) and fertilizer (IIRC). Not electricity, but heat and chemical energy.

[loxias]

Ignore the haters. Spend a few thousand bucks on some used PV panels on ebay, get a bunch of used batteries, and teach yourself enough electronics to DIY build everything else. That'll take you a bit of time, but you'll learn a TON and it's fun.

It'll be a while before you get to the point where you can safely hook up to the grid "DIY", so don't do that. As other posts have mentioned, how the national grid works is fascinating and non-trivial. (I love knowing that stuff, just because I'm a dork)