Corporations have become major drivers of solar and renewable energy growth in the U.S. over the course of recent years. Along with a growing number of U.S. towns, cities and states, major corporations are setting 100% renewable or zero-carbon energy goals. Some already are poised to achieve them.

Medical and health care services providers, for example, have an acute need for reliable and resilient power and energy. So much the better if it’s cost-competitive, emissions-free energy, and on-site solar-plus-storage or hybrid clean energy systems are now competitive with the combination of grid power and back-up, off-grid diesel or gas-fueled power generation in a growing number of U.S. states.

Novo Nordisk recently announced it’s investing in a new, 672-acre (271 hectares) solar power farm in North Carolina. Not only will it enable the Denmark-based pharmaceutical multinational to power all its North American production with renewable electricity, but Novo Nordisk will also be able to power all its production facilities with 100% renewable energy.

Medical and health care services providers aren’t the only corporations increasing their investments in and use of solar and other forms of renewable energy. The trend is increasingly in evidence among U.S. agricultural, commercial and industrial companies.

Corporate solar and renewable energy: “Tremendous room for growth”

The sharp, fast fall in the installed and ongoing costs of advanced solar, wind and energy storage systems is driving renewable energy growth among corporations in the U.S. and globally, according to Wood Mackenzie Power & Renewables Senior Research Analyst Colin Smith.

First and foremost, generally speaking, it’s very inexpensive for corporations to invest in renewable energy now, wind and solar in particular. The savings can amount to millions of dollars.

—Smith told Solar Magazine.

Pressure from consumers and advocacy groups to address the issues of climate change and environmental pollution, along with government policy mandates, is adding to the trend, Smith continued. “We’ve seen some companies willing to pay a slight premium for clean energy, and we’ve also seen companies signing up for ‘green’ energy tariff programs offered by utilities.”

Taken together, “there’s tremendous room for growth in the renewable energy sector to meet corporate demand,” Smith said in an interview. “For the same reasons cities are announcing 100% renewable, or zero-carbon, energy targets, corporations want to be seen by their consumer base and others as ethical companies. There’re a cost component and social responsibility component contributing to growth.”

U.S. federal government investment and production tax credits for solar and wind power projects have been keys to establishing a viable financial basis for renewable energy development and growth in the U.S. They are set to be phased out beginning next year, however. Smith believes that won’t derail the growth trend, however.

We don’t know if the investment tax credits will be extended, but even given the current situation wind and solar are likely to be the lowest cost options for electricity.

Major corporations at the forefront of the renewable energy transition

The world’s largest Internet companies and data center operators have been at the forefront of the corporate renewable energy growth trend. “Take a data center, for example. They have hefty electricity bills. They can save millions of dollars per year and bring their operating costs down just by shaving a couple of cents per kilowatt-hour (kWh) off their electricity bills,” Smith pointed out.

Akin to data center operators, energy reliability, resilience and security are critical to ensuring the sustainability of medical and health care services providers. “We’re seeing movement [towards greater renewable energy investments and use] in the health care sector,” Smith said.

Medical and health care services provider DaVita recently signed two virtual power purchase agreements (VPPAs) with Longroad Energy that will generate enough emissions-free electricity to power all the company’s North American operations by 2022. DaVita’s share in one solar and one wind power farm in Texas is expected to generate some 625,000 megawatt-hours (MWh) of clean energy a year, the equivalent of avoiding the equivalent carbon dioxide (CO2) emissions produced by the annual electricity use of about 52,000 average U.S. homes, according to the management.

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Manufacturing companies, such as GM and Toyota, as well as big-box retailers, such as IKEA, Target and Walmart, are raising their investments in renewable energy, Smith continued. Leading industrial companies are finding it makes bottom-line financial, as good environmental and social, sense to invest in and make greater use of renewable energy, as well.

LEGO recently announced it had reached its 100% renewable energy goals three years ahead of schedule. The company reached the goal upon completion of a 258-MW offshore wind farm in the Irish Sea. “We work to leave a positive impact on the planet and I am truly excited about the inauguration of the Burbo Bank Extension wind farm,” LEGO CEO Bali Padda was quoted in a news release.

A USD21-plus billion corporation that produces aerospace technology as well as packaging (including the iconic Mason jar), the Ball Corp. recently signed two VPPAs—one for a new wind and one for solar power farm for a total of 388 MW—that will enable the company to power all its aerospace, packaging and corporate operations in North America with renewable energy by year-end 2021.

A privately held, USD4 billion producer of fruits and nuts, including pistachios, almonds, citrus and pomegranates, Los-Angeles-based The Wonderful Company recently announced renewable electricity will power all its U.S. operations come 2025.

A pivotal role for utilities

Utilities naturally play a key, pivotal role in advancing the renewable energy transition and achieving GHG emissions reduction and climate change goals. “First and foremost, a utility’s goal is to provide reliable power at the lowest possible cost,” Smith noted.

Deregulation and regulatory reform are opening up new avenues for independent renewable energy developers to develop and introduce new clean energy business models and services, which puts competitive pressure on utilities but also opens up new opportunities, Smith continued.

It comes back to wind and solar being incredibly inexpensive now. Utilities in some states are realizing that operating a coal plant isn’t nearly as cost-effective as operating a solar-storage facility, so they’re expediting development.

Furthermore, utilities need to respond to customer choice and fast-growing solar and renewable energy demand, Smith pointed out. “As demand grows, more and more utilities will have to respond.” The stakes are high. Offering a reliable, cost-effective supply of solar or wind power could mean the difference between a huge corporation, an Amazon, Google or Microsoft say, deciding to build a new facility in their state and service territory,” Smith said.

Smith cited Georgia Power’s REDI program as a good example of the steps utilities are taking to hold down costs while investing in solar, wind and other renewable energy capacity.

Georgia Power launched its REDI (Renewable Energy Development Initiative) in the summer of 2018 with the goal of adding 177 MW of new solar power for commercial and industrial customers that have set aggressive renewable energy goals and demand for renewable energy credits (RECs) for projects ranging from 1 kW to 3 MW in capacity. Google and Target, among others, have signed up for the program.

In sum, the economics, as well as economically intangible benefits, of establishing and working to achieve 100% renewable or zero-carbon energy are proving increasingly attractive to any group in which energy accounts for a large part of operating costs. It will be a good number of years before the renewable energy trend matures fully, however, Smith said.

Renewable energy’s role in corporate sustainability, corporate social responsibility initiatives

Corporations’ 100% renewable electricity or zero-carbon energy initiatives are often part and parcel of broader-based, strategic sustainability and corporate social and environmental responsibility programs.

This is changing, but outside the power and energy sectors, the vast majority of companies are strictly energy consumers as opposed to energy prosumers (producer-consumers). Hence, their initial focus is typically on reducing their Scope 2 emissions. Scope 2 emissions are indirect GHG emissions from electricity purchases.

Ball Corp., for example, expects to reduce what’s known as Scope 2 GHG emissions by 50% globally, equivalent to the carbon reduction of removing 180,000 passenger vehicles from the road annually .

Ball says its latest solar and wind VPPAs will contribute nearly 5,000% more renewable energy to its North American electricity portfolio. Combined, they’ll produce 1,200,000 MWh of clean, emissions-free energy per year. That’s equivalent to the amount of electricity used by 100,000 U.S. homes each year, management points out.

Leading corporations are moving forward and working to reduce even more indirect, Scope 3 emissions, those that are produced by a corporation’s supply chain and channel partners, for instance, Smith pointed out. “I think we’ll see more and more attention on Scope 3 emissions. The further along companies get in terms of achieving their own renewable energy, emissions reduction and sustainability goals the more pressure they’ll add on to channel partners, suppliers, etc. Their sphere of influence will expand geometrically,” Smith said.

The “Big Takeaway”

The “big takeaway” from all this is going to be ongoing growth in demand for the solar, wind, energy storage and other clean energy technology that enables corporations to reduce the negative impacts their activities have on human and environmental health and quality of life while at the same time yielding cost savings or new revenue streams, according to Smith.

“Companies are now able to achieve economic savings and meet the demands of stakeholders who want them to meet carbon-neutral goals. There are limitations as to how fast they can achieve them, however. The answers aren’t always straightforward or simple to achieve.”

Smith sees many more corporations achieving their renewable energy and carbon-neutral targets, and much sooner than many may have expected. “Solar energy technology is being adopted in virtually all [U.S.] states at this point, but activity varies widely across the U.S.,” Smith highlighted. Smith sees many more corporations achieving their renewable energy and carbon-neutral targets, and. “Solar energy technology is being adopted in virtually all [U.S.] states at this point, but activity varies widely across the U.S.,” Smith highlighted.

“Solar is booming in Texas [at present] but not in Kentucky, but that doesn’t mean solar developers aren’t active in those regions. The most coal-hardened state in the U.S., Kentucky has put solar panels on the roof of its coal museum. That’s a very symbolic development,” Smith said.

Adoption of new, clean energy technology, battery energy storage in particular, will play an increasingly large role in corporations realizing their renewable energy and sustainability goals, Smith continued. So will electrification of transportation as growing numbers of companies “with massive transportation networks” roll out fleets of electric vehicles. “That infrastructure is just being built. The energy storage market is still in its infancy,” Smith pointed out. “It may be around 10 yrs behind solar in terms of megawatts deployed, but its gearing up.”

“All these technologies are being influenced by multiple factors, and they’re going to be adopted at different rates in different regions. Some companies are going to move faster than others and they’re going to leverage different technologies to meet those goals. In two to three years I think we’ll be seeing a lot more companies hitting these targets,” Smith concluded.