Businesses Continue to Choose Renewable Energy
February 22, 2018
In a recent article, GreenBiz noted the corporate sector’s continued push towards renewable energy. Demand is growing as companies work to meet the expectations of stakeholders to improve sustainability efforts, while taking advantage of falling prices.
As noted by GreenBiz, businesses committed to 3,110 megawatts (MW) of wind and solar via power purchase agreements (PPA) last year, which is almost double 2016 capacity but still below a 2015 high point.
For example, technology infrastructure company Switch partnered with its customers to fund construction of what will be the single largest solar project portfolio in the United States, called Gigawatt 1 in Nevada.
There are other innovative forms of sourcing renewable energy that are making the transition to clean energy easier for companies. This includes green tariff deals directly with utilities, which in 2017 grew 2.5 times above prior year to 560 MW, and virtual power purchase agreements (VPPA) as just announced by AT&T.
VPPAs are available even in markets where the utility has a monopoly. A company will sign a long-term contract to purchase at a fixed price the renewable energy certificates (REC) generated from a new wind or solar farm, which helps the developer finance the project. When the developer sells the electricity generated by the facility into the wholesale market, a portion of the proceeds flow back to the company to help offset its monthly utility bill.
Even with all of these options, onsite generation is still a popular and growing option for companies. During the first three quarters of 2017, 1,372 MW of commercial and institutional solar capacity was installed, up 3 percent year-over-year, according to the Solar Energy Industries Association and GTM Research.
Many companies find that solar arrays can pay for themselves in a handful of years due to reduced operating costs, tax breaks, and other federal and local incentives. “Our system is expected to pay for itself in less than four years,” says Peter Rehme, owner of Rehme Steel. “Solar is just a great business decision. It’s really a no-brainer because it makes financial sense, environmental sense, and it’s a great marketing tool.”