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Switch to renewable energy
Energy is a major CO2 emitter. Source renewable energy to cut your emissions.
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Why you should take this step
Every business needs energy to operate. Energy generation emits carbon dioxide – it may even be your largest emissions source. But it’s also one of the areas where you can radically reduce your emissions, become more efficient and even identify savings on your energy bills! Dive into the three main solutions for sourcing clean, renewable energy to determine the best fit for your business.Questions on your mind
- Where does my electricity come from currently?
- What are my options for sourcing renewable electricity?
- Is renewable energy more expensive than traditional fuels?
- Do I have to buy renewable electricity, or can my business produce its own?
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To determine your best renewable energy options, first understand electricity procurement at all your sites. Create an overview: annual electricity consumption (current and projected), current amount of renewable energy sourced, duration of existing contracts and the prices you currently pay.Know your options
Here’s the good news: There are three, reliable ways to power your business with renewable energy. The challenge: Navigating the ins and outs of each option, including their availability, cost and related regulations in the countries where you operate. Read on for a brief introduction to Renewable Energy Certificates (RECs), Power Purchase Agreements (PPAs) and on-site installations.Renewable energy certificates (RECs)
RECs are certificates that prove the electricity you buy is generated from a renewable source (wind, solar, hydro, geothermal or biomass).
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RECs are the least complex of the three renewable energy options, due to a straightforward and fast purchasing process. PPAs and on-site installations can be more complex to set up, usually taking between six months to two years. But, the time and resources invested in these options can pay off!Power purchase agreements (PPAs)
A Power Purchase Agreement (PPA) is a long-term contract for the purchase of electricity, between your company and a renewable energy project owner (e.g., a wind farm or solar system owner).
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PPAs or on-site installations can replace your existing energy contract, while RECs supplement your regular energy contract (which is certified as “green” by the REC). Note that PPAs are only feasible in deregulated energy markets, while RECs and on-site installations are feasible almost anywhere.On-site installations
When your business owns an on-site installation (e.g. a wind turbine or solar panel), you would typically consume the electricity it generates “behind the meter” – meaning you source the electricity directly from your installation, rather than from the electricity grid. As the installation’s owner, you are responsible for project development, permitting and maintenance.
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Both on-site installations and PPAs can be highly profitable, or result in financial losses, depending on how energy market prices develop during their lifetime. However, RECs always add a cost to your business, as they supplement (rather than replace) your existing energy contract.How long does each option last?
RECs
RECs last for one year.
PPAs
PPAs are typically negotiated to cover 10-15 years, and potentially much longer.
On-site installations
On-site installations typically produce energy for 10-20 years. For example, wind turbines are certified for between 20 and 25 years of operation.
Our road to renewable energy
We established workstreams to pursue PPAs and on-site installations, with the goal of eventually eliminating the need for RECs. Now, we’ve started to see results. In March 2018, our Dabaspet, India factory signed a solar PPA which delivered $177,000 savings in its first five months!