When it comes to renewable energy, most people think they don’t have many options. They assume that power is power; they know they need it, so they simply buy into the first or the most familiar energy provision they find. Don’t be fooled: you have options!
In addition to the numerous paths you can take to obtain traditional energy (aka, “brown power”), there are a host of renewable energy options and design solutions that can help meet your goals and exceed your expectations. The key is to find an energy advisor who has the experience and expertise to help you navigate all of these considerations to create a smart energy solution for your business.
From purchasing renewable energy credits (REC’s) to installing an independent, onsite solar power system, you have many options for customizing your energy.
Be sure to talk to your trusted renewable energy advisor about these three considerations to ensure you’re getting the best deal to support your green goals (both the cash and eco kind).
Consideration 1: On-Site v.s. Off-Site Solar
Thanks to major advances in technology that have made solar power more applicable and accessible to businesses, solar power is no longer a one-size-fits-all solution. Rather, you have the option of choosing to procure energy from off-site sources such as through paper transactions or to build an on-site system.
There are four main options for going green that give you the freedom and flexibility to find the smartest strategy for your unique situation:
On-Site Solar
- Power Purchase Agreements (PPAs) – A great option for businesses that can’t afford the large lump sum investment of building their own solar power system, a PPA is an arrangement in which a developer builds the solar system on a business’s property free of charge and then “sells the power generated to the host customer at a fixed rate that is typically lower than the local utility’s retail rate.”
- Solar Acquisition – Occurs when a consumer purchases a behind-the-meter solar array, such as when a business purchases their own photovoltaic system and remains grid-tied in order to engage in net metering.
Off-Site Solar
- Renewable Energy Credits (RECs) – According to the EPA, “RECs are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from a renewable energy resource.” The value of the credit is determined by several factors, including the facility location, system build date, and emissions rate. RECs can be procured on your behalf to “green-up” current or future “brown power” contracts.
- Retail Electric Provider (REP) Products – REPs are energy providers that use the local utility company to deliver the electricity they generate to their customers. They often provide better rates and service than public utility companies and offer various renewable products. These products may contain a percentage of renewable power or be entirely green.
When considering onsite options like a PPA or Solar Acquisition, an important factor is the amount of space available for either a ground, roof, or covered parking installation. While most people assume a solar power system – also known as a photovoltaic or PV system – has to be installed on a roof, ground mount installations can be more cost-effective and produce more power. Similarly, a carport array is an environmentally friendly way to get covered parking (which is a fantastic employee benefit) and may be tax-deductible!!
As the renewable energy market becomes more diverse, it’s critical to consult with a trusted energy advisor about which method maximizes value for your business.
Consideration 2: Renewable Energy Financing
Another common misconception is that in order to take advantage of renewable energy sources, you need to buy a PV system outright. However, there are several options for financing your renewable energy initiative.
Before shrugging renewable energy aside because you don’t have the cash to throw at a new PV system, consider opting for a solar PPA or lease. Each comes with a different set of liabilities, upfront costs, and tax benefits.
With a PPA or lease, the owner of the system can take advantage of tax equity savings for exempt organizations like schools and potentially pass on some of the earned value on to the buyer (you!). Another benefit of PPAs and lease agreements is that the liability of the equipment lies with the official owner, which is one less thing you have to worry about as you run your business.
Consideration 3: Location
A third common misconception is that if you opt for purchasing renewable energy credits, you must buy them from within your state. However, that’s not necessarily the case.
Ultimately, the decision comes down to how “green” you want to get. For example, in Texas, wind-generated energy is usually the cheapest and will likely continue to get cheaper since policymakers are working to get rid of the renewable requirement statewide.
Similarly, Texas has the largest wind capacity in the nation and is continuing to grow its wind-generated energy volume (which is why it’s not uncommon to see massive wind turbine blades rolling down the freeway on flatbed trucks!). According to the U.S. Energy Department, “in 2017, wind-generated about 15 percent of the electricity in Texas, up from less than 13 percent in 2016.”
The price and benefits that come with your choice of renewable energy sources depend on where that energy was generated and how it travels to reach your light switch.
If you’re considering making the green switch to renewable energy, consult with a trusted energy advisor first. There are numerous factors involved that an expert can help you navigate to make the smartest choice.
