The world is taking a huge shift to renewable energy, and India ranked 3rd for renewable energy production with a capacity of 168.96 GW. As renewable energy is much more beneficial for the economy, environment, and development, many investors plan to invest in renewable energy in India for higher returns and profitability.
When it comes to investing in renewable energy, then, solar and geothermal energy in India are the two most growing areas, so it needs to be clarified between solar vs. geothermal energy in India – which to invest in.
So if you want to invest in renewable energy but have yet to decide which one is better, don’t worry. At SustVest, we will help you to make the right investments for better returns.
In this article, we will take a closer look at geothermal and solar energy, their pros & cons, and identify where you should invest for higher returns and profitability.
Let’s dive in!
What is Geothermal Energy?
Geothermal Energy is the heat energy that comes from Earth’s natural heat. It’s a renewable & limitless source of energy produced from the earth’s surface near tectonically active areas. It’s used for producing clean electricity or for heating & cooling systems. However, geothermal will not replace electricity, but it will lower your heating and cooling bills for a long period.
According to statistics, India will harness 10 GW of geothermal energy by 2023. It’s clearly showing geothermal energy usage in the future and how it’s shaping the world of the renewable sector.
However, the availability of geothermal energy in India is limited to certain areas because generating geothermal energy requires several feet loops of pipes for generating energy. It is based on land that is sustainable for energy sources.
There are various areas where geothermal energy is used, such as spin turbines for electricity production, water heaters, and heating/cooling pump systems.
Pros of Geothermal Energy:
- It’s renewable energy.
- Geothermal power plants have small land footprints.
- Used for electricity production and heating/cooling systems.
- It requires minimal fuel costs and is cost-effective in the long run.
- It has a low carbon footprint and minimal environmental impact.
- Rapid evolution and Innovation for the use of geothermal energy.
Cons of Geothermal Energy:
- Availability of geothermal is limited to certain areas due to high heat flow.
- Geothermal power plants require high upfront construction costs.
- It impacts the environment and also causes earthquakes.
- It comes with a risk of exploration and is expensive.
- Faces various regulatory challenges and obstacles.
- It requires specialized knowledge and expertise in exploration, drilling, and operations of geothermal power plants.
What is Solar Energy?
Sun is a limitless and natural source of solar energy. It’s one of the best renewable energy assets that doesn’t deplete or degrade. As the sun spreads light to the whole world, it becomes easier to expand the reach of solar energy for electricity production across the globe. Solar panels are used to collect the energy from the sun’s rays and convert it into electricity.
According to statistics, solar energy is currently contributing 3.6% to worldwide electricity production, and soon it will be the biggest source of electricity production globally.
Solar Energy is limitless, renewable, and environmentally friendly energy that has no harmful effects and reduces climate change risks.
Solar Energy is surely a source of electricity compared to traditional electricity, which requires too many resources such as fossil fuels, coal, and water. Current governments across the globe are putting efforts into increasing solar energy awareness and its benefits by creating new policies and offering tax incentives and rebates that encourage people to make rapid shifts to solar energy.
Check out our article on How to Make A Solar Investment In India here.
Pros of Solar Energy:
- It’s an unlimited source of clean & renewable energy.
- It’s the most affordable and cost-effective source for electricity production.
- It has a long life span, low maintenance, and minimal operational costs.
- Solar Energy is accessible across the globe.
- Constantly improving technology and innovations to get the most out of it from solar energy.
- A home with solar panels installed is more valuable and increases its resale value.
Cons of Solar Energy:
- Required high upfront costs for installation.
- Dependency on weather conditions for energy production.
- It requires a lot of space for storing solar energy.
- Solar panels require a significant amount of space for the installation.
Solar vs. Geothermal Energy in India- Which To Invest In?
Solar energy and geothermal energy in India are two useful renewable energy sources that are now replacing traditional energy. However, there are many key differences between both energy sources, and they come with pros & cons that we’ve discussed above. Now it’s time to identify which can be more profitable for investment. So we compared both sources in four parameters to identify the best one for investment.
Let’s find out!
1. Potential Comparison
Geothermal energy is renewable energy that comes from the earth’s internal heat surface. These are areas where volcanic activities are found, such as Iceland, Japan, and New Zealand. However, there are limited areas to generate geothermal energy in India, so geothermal energy generation is quite limited compared to solar energy.
Solar Energy, on the other hand, is the best renewable energy, and the sun is an unlimited source of solar energy with reach across the globe. India ranks 3rd for solar energy usage and rapidly shifts to solar consumption because it’s clean, environmentally friendly, cost-effective, and non-maintenance. Solar Energy will be the largest source of electricity production across the globe, opening new employment opportunities and changing the world.
So when it comes to potential comparison, solar energy is way ahead in the long term.
2. Return Comparison
Geothermal energy requires a high capital investment at the initial stage because it requires finding the right earth’s heat surface and deep digging to access the geothermal reservoirs.
On the other hand, Solar Energy is more affordable than geothermal energy because the sun is a source of solar energy, so there are minimal resources required for solar energy production, and it’s more affordable for people to adapt to solar energy. In recent years, solar energy has given higher returns as its demand is growing rapidly compared to geothermal energy in India.
3. Industry Comparison
As the sources of geothermal energy in India are limited, it’s not heavily used compared to solar energy. Geothermal energy is still in the early stages in India and requires high resource costs. Currently, the investors and government invest limited in the geothermal sector because the opportunity to gain higher returns seems to be in the solar energy sector.
Solar Energy is rapidly growing in India as the Government is supporting, spreading awareness of solar energy, and offering great inventive and tax rebates that make the faster shift to solar energy. The Indian Government has set a potential target of achieving 100 GW of solar power and 175 GW of total renewable energy capacity. It shows that the solar industry is growing rapidly and seems a great time to invest for higher returns and long-term profitability.
4. Climatic Comparison
Geothermal energy is less affected by climate change because geothermal energy plants can run without depending on weather conditions. It relies on the earth’s heat surface, which is limited in India. So there’s less climatic effect as compared to solar energy.
Solar Energy heavily depends on climate conditions, such as cloudy weather affecting solar energy production. However, India is well-suited for solar energy production due to the highest solar irradiance and getting the most sunny days every year.
Still, solar energy is a more attractive option in India for investment because of its climate conditions and opportunities.
For details about sustainable investing check out our blog- Is It worth Investing In Environmental Sustainability?
FAQs: Solar vs. Geothermal Energy in India – Which To Invest In?
Which state produces the most geothermal energy in India?
Ladakh, Jammu and Kashmir, has been identified as the most resource-rich region in terms of geothermal energy in India.
What is the difference between solar energy and geothermal energy?
The basic difference between, solar energy and geothermal energy is that geothermal energy uses the heat of magma that is buried deep in the earth, whereas solar energy uses heat from the sun to generate energy.
After having a detailed discussion on geothermal and solar energy and their pros & cons, we hope this article helps you to identify solar vs. geothermal energy in India -which to invest in. As the demand for solar energy is increasing rapidly in India, there’s no doubt that solar energy is a better option for getting higher returns and long-term profitability by seeing the favorable climate in India. However, there are so many things that you need to understand before investing in solar energy.
With SustVest, you can take your first step in investing in Solar Energy under expert guidance, get higher investment returns, and build passive income for long-term profitability.
Founder of Sustvest
Hardik completed his B.Tech from BITS Pilani. Keeping the current global scenario, the growth of renewable energy in mind, and people looking for investment opportunities in mind he founded SustVest ( formerly, Solar Grid X ) in 2018. This venture led him to achieve the ‘Emerging Fintech Talent of the Year in MENA region ‘ in October 2019.