As technologies improve, market options increase, and costs decrease, more retailers are developing renewable energy strategies. No longer a strategy dominated by companies deploying onsite rooftop installations, renewable energy procurement is becoming a strategic cost saving approach.
RILA and its program partners are working to Develop Implementation Models, Educate the Industry, and Spur Adoption of Implementation Models by providing the following resources:
The RILA-ITI Corporate Clean Energy Procurement Index: State Leadership & Rankings
was created to guide members of the Retail Industry Leaders Association (RILA) and Information Technology Industry Council (ITI) and others in their efforts to boost renewable energy usage across their operations in the United States. It is intended to assist policymakers and large renewable energy buyers in advancing policies that help, not hinder, renewable energy development, and help large renewable energy buyers to select states in which they may make renewables investments.
- Implementation Model Case Study
- Regency Centers partnered with Trader Joe's to install a 253 KW solar photovoltaic system that offsets more than 65% of the store's energy use, at no installation or maintenance cost to Trader Joe's.
- Whole Foods Market drew on lessons learned from past ad hoc rooftop solar installations to develop a roll-out plan for around 100 new systems covering 25% of stores and warehouses. Developing standardized lease language with landlords was a key enabler.
- The Home Depot needed a low cost solution to meet its renewable and alternative energy targets. The retailer leveraged financing options like Power Purchase Agreements (PPAs) and community solar. In 2016, Home Depot procured a total of 972 megawatt-hours (MWh) of renewable electricity from fuel cells, solar panels, offsite wind, and community solar and has committed to even more.
- Guide - Review the primers below which together compose the Renewable Energy Guide to learn more about procurement options, key considerations, and the policy context currently surrounding retail options for renewable energy.
Onsite Power Purchase Agreements (PPAs)
- A renewable energy contract between a project developer (likely backed by a financial counterparty) and a retailer. PPAs provide retailers with the ability to oﬀset on-site electricity consumption, potentially reduce Scope 2 carbon emissions, and provide a long-term hedge and/or savings opportunity against future electricity prices. Prepared by Schneider Electric.
- Offsite Power Purchase Agreements (PPAs) - A renewable energy (RE) contract between a project developer (and likely backed by a financial counterparty) and a company, where the RE installation is not sited at the location of the company’s electricity usage. These PPAs can deliver the energy physically to a company through the grid or can be financially-settled transactions (i.e. virtual PPA or vPPA). Prepared by Edison Energy.
Onsite Owned Systems
- Renewable energy developed or purchased by a company who is also responsible for operation and maintenance (O&M) of the system. Owned, onsite systems provide retailers with the ability to offset onsite grid electricity consumption, potentially reduce Scope 2 carbon emissions, and provide a long-term hedge and/or savings opportunity against future grid prices. Prepared by Schneider Electric.
Collaborative Renewables Sourcing
- Allows retailers to take advantage of PPAs they might not be able to otherwise through strategies like aggregation, joint tenancy or reselling. Prepared by Schneider Electric.
- Renewable Energy Credits (RECs) - Convey the environmental attributes of renewable generation, and may be bundled with electricity or sold separately on the open commodity market. RECs underpin global markets, provide valuable market signals for future renewable energy development, and may provide financial additionality to projects in emerging markets. Prepared by Schneider Electric.
- Global Procurement - While the U.S. and Europe have historically dominated the global renewable market, policy advances, technical developments, and price decreases have fostered the emergence of renewable energy markets in other countries. Now, multinational retailers can also match their international load with credible, clean energy options.Prepared by Schneider Electric.
- Additionality - A term that describes renewable energy generation that is truly new – i.e. additional. Retailers responsible for financially supporting new, expanding, or developing renewable generation sources, as opposed to buying into what is already available or planned, can claim additionality. Prepared by Schneider Electric.
- Goalsetting - A target for a company’s procurement of renewable energy (RE) that is typically bound by a specific timeframe. RE goals can be internal only or publicly announced and are often framed as a percentage of energy demand, number of installations, absolute amount of procured, or absolute amount of GHGs reduced. Prepared by Edison Energy.
- Federal Tax Credits - Two primary federal tax credits that encourage the development of renewable energy: (1) the Investment Tax Credit (ITC), which lowers the user’s tax burden by a percentage of the upfront cost of the renewable energy system; and (2) the Production Tax Credit (PTC), which provides a tax credit per kilowatt hour (kWh) of renewable energy generated. Prepared by the Wind Energy Foundation.
- Green Tariffs - Green tariffs are electric power purchasing programs that allow energy consumers to procure large-scale renewable energy more cost effectively than what is available through green pricing programs from traditional utilities in regulated states. Prepared by the World Resources Institute (WRI).