This is the second in a series of blog posts about renewable energy options for retailers.
As retailers look to reduce their environmental footprint and grow renewable energy investments, RILA continues to hear from our members that understanding the ever-changing renewables procurement landscape can be challenging. That's why we are developing a new renewable energy guide, which highlights fundamentals of different procurement options and key considerations, specifically for retailers.
In a series of blog posts, we'll be outlining various topics featured in the guide; the second in our series, Owned Onsite Systems, is outlined below. We are excited to share the chapters one by one, and to work with partners like Schneider Electric in their development.
What are Owned Onsite Systems?
Owned onsite systems are renewable energy assets that are developed or purchased by a company that also oversees the ongoing operations and maintenance of the system. Onsite systems allow retailers to off-set their onsite grid electricity, reduce their carbon emissions, and provide savings opportunities.
Companies that have a surplus of capital may see the most value in this structure because of the potential to have the highest return on investment in comparison with other onsite developments that involve third parties and leasing.
Who uses them/What are the key benefits?
Owned onsite systems are ideal for retailers that prefer to own their property's renewable energy assets and have readily available CAPEX to invest. And because the assets are operated and maintained by the [EH1] company, electricity is essentially free after the system is paid off.
[EH2] If retailers have access to a rooftop, parking lot, or open ground space, they can take full advantage of an owned onsite systems' potential by increasing the site's property value and making money.
Owned onsite systems also offer retailers the reputational and visual impact benefits of supporting renewable energy.
Are Owned Onsite Systems right for you?
- Fully Realized Benefits
- Enhanced Returns
- Positions company as a sustainability leader
- Provides potential to reduce facility emissions
- Higher NPV than other options
- Fewer contract risk[EH4] s than other options
- Large capital investment
- Financial returns
- Onsite renewables do not equal 100% renewable energy
- Performance risks
- OPEX expenses
- Property taxes
- Net metering policies
- Additional costs
Ready to move forward with Owned Onsite Systems?
Like any renewable energy initiative, engaging company stakeholders is crucial to get buy-in and ensure there is a thorough understanding of the deal structure, benefits, risks, and implementation. Stakeholder groups that should be involved include Facilities, Procurement/Energy, Finance/Accounting, and Risk Management.
Engaging with independent consultants as well as several NGOs and coalitions can help companies accelerate the adoption of renewable energy and provide expertise.
To learn more about Owned Onsite Systems, if they're a viable option for your company, and next steps for moving forward, access the full chapter in the renewable energy guide here and all the chapters published so far here. For more information about RILA's renewable energy initiatives, contact Erin Hiatt.