Business leaders have an important decision to make this year: to continue operating under the status quo or to join the list of successful companies creating a more sustainable future by contracting or investing in renewable energy and making a positive impact on their brand, customers, employees and bottom line.
Citing concerns about climate change and its threat to human health, Kaiser Permanente, one of the nation’s largest not-for-profit healthcare providers, last week announced plans to power half the electricity it uses in California with renewable energy. Having previously committed to reduce greenhouse gas emissions by 30 percent by 2020, Kaiser Permanente is now targeting to surpass this goal by the end of 2016, accelerating its timetable by three years. To this end, Kaiser Permanente will purchase up to 70 megawatts of distributed solar power from NRG Renew to be installed on rooftops and parking shade structures at up to 170 Kaiser Permanente facilities across California, including medical offices, hospitals, clinics and data centers.
Several of the following market forces have aligned to make distributed solar power a viable, strategic option for Kaiser Permanente — and companies across all industries that are reviewing and re-evaluating their energy needs, looking for cleaner, more sustainable sources:
- Cost reduction driven by technology advancements and scalability: The renewable energy industry is experiencing a decrease in infrastructure costs, finding that “solar photovoltaic modules cost three-quarters less today than they did in 2009, while wind turbine prices declined by almost a third over the same period.” The economics of clean energy are clear. In fact, some Fortune 500 companies have shaved more than $1 billion off their annual electric bills.
- Grid instability and weather catastrophes have driven more interest in distributed generation: Not a lot has changed since the grid was originally built more than a century ago. In 2001, five weather-related events caused power outages that affected more than 50,000 customers. Ten years later, that figure rocketed up to 120 events that took down the grid. Weather events like Superstorm Sandy, combined with an antiquated infrastructure, signal that this pattern of unreliability will likely continue. Making the grid more resilient presents an ever-increasing cost imposed on consumers, but distributed solar and microgrids can take the strain off the grid by placing clean, solar energy generation next to a company’s load needs, helping mitigate the impact of future grid-related catastrophes.
- Sustainability goals improve brand image in the eyes of customers, employees and shareholders: According to an Accenture and United Nations sustainability report surveying more than 1,000 top executives across 103 nations and 27 industries, 93 percent of CEOs see sustainability as important to the future success of their business, and 80 percent see sustainability issues as a route to competitive advantage in their industry. Not only do sustainability efforts address growing consumer demands that companies address climate change and do the right thing for the planet, but renewable energy savings can be reinvested in research and development of innovative new products to corner markets or increase market share.
- Companies are hedging for the future against volatile fuel prices and escalating utility rates: In the past, companies did not have a choice where their energy would come from. Today, there are more options for companies to lock in long-term, fixed-cost, clean energy contracts such as Power Purchase Agreements or Operating Leases that allow companies to hedge against future increases in power pricing and fundamentally purchase electricity in a cheaper way.
A combination of all these factors has led to an increase in renewable investment including a rise in the number of companies embracing distributed generation as a strategic, economic and more sustainable energy option. This middle ground between residential solar and utility-scale solar is an area where single-brand, multi-site companies, such as Kaiser Permanente and Unilever, can uniquely benefit from a portfolio approach to harnessing renewable energy.
At Arizona State University, we worked with the university’s team to develop and install more than 30 installations across the campus. At our Starwood projects in Arizona, Hawaii and St. John, we’re taking a diversified, custom design-driven approach, integrating solar panels into the existing landscape to provide visually compelling installations that adds to the beauty at each resort. While the economics and electricity pricing can vary greatly, a portfolio approach spreads the pricing across the collection of projects for overall savings. And it’s an approach that will work for many companies globally that operate multiple sites from college, government and corporate campuses to shopping centers, warehouses/distribution centers and manufacturing facilities.
Our sustainable future is here. Now is the time to reevaluate your energy needs and join us in rewriting the energy status quo with renewables at its core.