U.S. Corporate Buyers Set Massive New Record for Renewable Energy Procurement
Non-utility renewable energy buyers in the United States hit an annual record by August 2018, closing more than 3.5 gigawatts of new projects, and the total is expected to hit five gigawatts by year’s end, Greentech Media reports, citing data from the Rocky Mountain Institute’s Business Renewables Center.
The previous record, set in 2015, was 3.12 GW. Last year’s corporate renewable energy deals totalled 2.87 GW.
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And the top-line figure doesn’t even tell the whole story. “The total number of commercial and industrial renewable energy deals will be even higher, as RMI’s numbers refer only to contracts for large, offsite renewable energy projects,” Greentech states. “That means rooftop solar projects deployed by the likes of Ikea and Target are not included in the RMI deal tracker.”
Business Renewables Center Program Manager Kevin Haley sees two factors behind the increase. “First, there’s been strong, continued support from major tech companies with large electricity loads. Facebook and AT&T, for instance, have procured the most new renewable energy capacity in 2018, with other large deals from Microsoft, Apple, and Walmart,” writes Greentech reporter Julia Pyper.
And second, “a strong number of new first-time buyers are continuing to enter into the market,” Haley said, with nearly 20 corporate buyers making their first renewable energy purchases in 2018. “A lot of this growth is being driven by companies that may not have done a deal yet.”
While U.S. tax credits for solar and wind are ramping down over the next couple of years, Haley said that hasn’t been the impetus for this year’s growth spurt—at least, not yet. “It’s still very much market interest, and new buyers, and that sort of thing,” he told Pyper. “But we do anticipate companies will want to lock in lower prices as the expiration of the [two tax credits] comes up.”
Greentech says many companies are paying close attention to the 100% renewable energy trend because it’s good for business—now, and in the future. “At the time of publication, 152 companies of various sizes have made a commitment to go 100% renewable through RE100, Pyper wrote last week. “Big names like Apple and Google have already met their targets, while other companies are looking out further into the future, some as far as 2040. That timeline indicates companies are looking beyond today’s prices and present-day marketing benefits.”
“I think it’s something they’re seeing as achievable, as power purchase agreements and other transactions become more streamlined and easier to use and de-risked,” Haley said. Renewables also look more attractive “as they look at the future of the grid and the future of policy and consider what impact a potential carbon tax may have on their business,” he added.
Greentech’s coverage includes a more detailed look at methods of de-risking corporate renewable energy projects, as well as a state-by-state inventory of deals to date that shows Texas leading the field of 26 jurisdictions, with 42 out of 155 signed agreements in 2018. Oklahoma and North Dakota are next, with 14 each, followed by Illinois with nine, Nevada with eight, Virginia with seven, and California with six.