The top 25 largest companies on the Fortune 500 list are making a statement about renewables. Edison Energy reported that 72 percent of large companies with headquarters in the U.S. are actively pursuing additional renewable energy purchases; almost 50 percent of Fortune 500 companies have a sustainability or renewable energy target.
Most large companies have sustainability reports, which include significant goals for incorporating renewable energy into their portfolio. Amazon operates at nearly a 50 percent renewable level, with goals to reach 100 percent. How? One approach is to pay a company to produce renewable energy that offsets portions of the non-renewables Amazon uses. It might be a wind farm or a solar farm, and what happens next to that renewable energy should be of great interest to utilities.
Renewable energy must be uploaded to a grid, and developers across the country see this as an opportunity to earn tax credits. Companies like Amazon pay a premium to developers to produce renewable energy. As top companies continue to set the trend toward using more renewables, developers may be finding this to be a profitable niche.
Up to now, many utilities have viewed the process of buying and selling renewable energy as a hassle — or they are unable to provide the option at all because of state regulations. On the other hand, corporations want renewable energy without having to build new infrastructure. Companies like Amazon, Apple, Facebook, Google, Microsoft, Target and Walmart are locating their operations in states where renewable energy is readily available and can easily be purchased. There is an opportunity here for utilities: By offering to sell renewables as a service directly to local corporations willing to pay for it, both entities can achieve their goals on their own terms.
As large companies become more sustainable, local utilities can provide the best opportunities to do that. But some changes are necessary. Utilities in regulated states can lobby their state governments to allow these collaborations. At least one benefit to the states is that large corporations become more likely to spend their money with local utilities rather than in a different state.
Utilities are starting to use green tariffs to sell renewable energy to their customers. This allows the utility to lock the company into long-term purchase agreements. Green tariffs let the utility cover the installation costs of renewable resources and allow large companies to avoid significant upfront costs for installation of renewable resources. They can incorporate renewable energy into their portfolio for set intervals.
As the trend toward renewable energy grows, corporations will find someone to do business with them. Utilities must decide if this process fits their goals, but it’s an option that could be worth the extra effort to lobby for a system that provides opportunities for both utilities and companies in all states.
As Fortune 500 companies make the switch to more renewable energy, it’s important to explore their role in the future of power.
