In a move that underlines the growing appeal of corporate investment in renewable energy,
The software giant has agreed to buy all of the output from the 110MW wind farm for 20 years. The project, to be built by RES Americas, will send electricity into a local grid that serves a
For businesses that want to cut their carbon emissions, renewable energy might sound like a natural choice. But for years, the more popular option has been for businesses to buy renewable-energy credits associated with renewable-energy-generation projects rather than investing in those projects directly. Buying credits seems easier: it doesn't require a business to sign long-term power contracts or commit the hefty capital – and time – required to build its own wind or solar-power projects.
But as the wind and solar markets grow, thanks in large part to federal and state tax breaks and other subsidies, the cost of building and owning renewable-energy projects – along with the price of renewable energy – has steeply declined. The average long-term price for wind power to US utilities plummeted to
Meanwhile, the marketing benefit of investing in renewables remains strong. Buying wind power or owning wind farms, for example, represents a deeper commitment to fighting climate change than simply buying credits. Both approaches provide the crucial, long-term capital for growing the renewable energy market. In many cases, they also help companies reduce their utility bills and could even generate profits in the long run.
The company buys renewable energy that flows into grids where its data centers are located. It also co-owns renewable energy power plants that sell electricity to utilities, and
Aside from signing power purchase agreements, a growing number of businesses also have installed renewable-energy equipment on their own properties to generate power on site. Solar panels' smaller footprint – they sit atop unused space on roofs instead of requiring a dedicated piece of land like most wind turbines – makes solar appealing for onsite generation and use.
Corporate investment in solar energy, whether via solar-electricity purchases or onsite installations, also is growing: the top 25 corporate solar-electricity users have enabled the installation of more than 455MW of capacity in the US to date, a 48% jump from a year ago, the
But while renewable-energy costs have declined, it still remains more expensive than power from coal or natural-gas power plants in many parts of the country – at least during times of lower demand. (Utilities tend to charge higher rates when demand is high, such as at the hottest times of day during hot summer months.)
That means an investment in renewable energy would only make financial sense – meaning companies would make up the cost in energy savings over a decent payback period – for companies that use a lot of energy and have to pay a premium for it.
Asking companies to commit money long-term to buy renewable power or own renewable-energy projects remains a tough sell when they could use that capital for growing their core businesses.
But as more businesses, particularly well-known brands such as
Ucilia Wang is a
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