How to Overcome the Challenges of Small Scale Renewable Energy Projects

How to Overcome the Challenges of Small Scale Renewable Energy Projects

How to Overcome the Challenges of Small Scale Renewable Energy Projects

Implementing small scale renewable energy projects can be extremely rewarding, but also comes with unique challenges. As someone passionate about renewable energy, I have learned a great deal about how to successfully navigate these hurdles. Here is my guide on overcoming the key challenges of small scale renewable energy projects.

Choosing the Right Technology

The first step is deciding which renewable energy technology is best suited for your particular application and location. There are pros and cons to each approach that must be carefully weighed.


Solar photovoltaic (PV) systems directly convert sunlight into electricity. Key advantages: simple design, no moving parts, long lifespan, and modular nature allowing incremental capacity increases. Downsides include intermittency, large footprint, and degradation over time. Solar works best in sunny climates and on rooftops or ground mounts with unobstructed solar access.


Wind turbines harness the kinetic energy of moving air to spin a generator. Benefits are no fuel required and excellent scalability. However, limitations include intermittency, wildlife impacts, aesthetic concerns, spacing requirements, and zoning issues. Wind power is ideal for rural, open areas with consistently high wind speeds.


Micro hydro systems leverage flowing water to spin a turbine connected to a generator. This provides reliable base load power. But it requires sufficient hydrological head and flow, which can be hard to find at a small scale. Licensing and permitting is also extensive.


Bioenergy utilizes organic matter like wood chips, agricultural residues, or methane from waste as fuel to produce heat and electricity. This provides dispatchable renewable power and waste utilization. Yet fuel supply logistics and costs can be challenging. Emissions control is also a concern.

Securing Upfront Project Funding

Renewable energy equipment carries steep upfront capital costs. As an individual or small business, self-financing is difficult. Here are some options to secure funding:

  • Apply for grants and incentives from government, utility, or nonprofit programs
  • Seek investments from angel investors or crowdfunding platforms
  • Get a loan from green banks/credit unions or secured/unsecured loans
  • Enter power purchase agreements where a third party owns and operates the system
  • Consider renewable energy cooperatives where members collectively fund and share benefits

Having a detailed business plan and clear value proposition is key to attracting financing through these routes.

Navigating Permitting and Regulations

Small renewables must comply with regulations like zoning laws, grid interconnection standards, environmental rules, construction codes, and electrical/structural engineering criteria.

To succeed, partner with experts including local permitting offices, experienced solar/wind installers, utilities, engineers, and real estate attorneys. Be proactive and patient with regulatory processes. Consider sites with fewer restrictions. Design systems conservatively to avoid issues.

Ensuring Technical Performance and Reliability

Once installed, system reliability and output depends on factors like:

  • Technology quality, sizing, and siting
  • Equipment durability, maintenance, and monitoring
  • Weather-related factors (e.g. solar intensity or wind speeds)
  • Grid stability and outages

To optimize performance:

  • Select proven technologies and experienced installers
  • Right-size systems using historical resource data
  • Validate designs through energy modeling software
  • Use remote monitoring and analytics to catch problems early
  • Establish preventative maintenance contracts
  • For critical loads, consider energy storage or backup power

Maximizing Financial Return

To maximize revenues and payback period, utilize all available incentives, optimize system design, control costs, and leverage innovative funding models.

Key strategies include:

  • Selling excess power to the grid under net metering or feed-in-tariff programs
  • Monetizing renewable energy credits (RECs)
  • Qualifying for tax credits, cash rebates, and renewable portfolio standard (RPS) payments
  • Structuring deals to maximize tax benefits if unable to utilize them directly
  • Securing low equipment prices through competitive supplier bids
  • Reducing balance of system costs through modularized solutions
  • Using power purchase agreements (PPAs) to reduce upfront expenditures

Building Community Buy-In

Neighborhood resistance can hinder renewable energy projects. Proactively communicate about project benefits, listen to concerns, and mitigate impacts.

Steps to build support include:

  • Holding community meetings to educate and solicit feedback
  • Addressing visual impacts via careful system siting and screening
  • Preventing reflective glare through anti-reflective solar panel coatings
  • Reducing wind turbine noise through engineering controls
  • Monitoring wildlife impacts and adjusting operations accordingly
  • Demonstrating positive economic effects like local job creation
  • Offering community shared solar or ownership opportunities


By selecting the optimal technology, securing financing, navigating regulations, ensuring performance, maximizing financials, and building community support, small scale renewable projects can overcome common pitfalls. With passion and persistence, we can accelerate the transition to local renewable energy, one project at a time.