Which renewable energy options are best for my business? - Smart Energy Decisions

December 16, 2020 - By Tanya March, Envizi

Which renewable energy options are best for my business?

In the recent Smart Energy Decisions webinar, “Optimizing the Pathway to Low-Carbon”, sponsored by Envizi, Edison Energy, and Redaptive, we explored best practices for achieving Greenhouse Gas (GHG) reduction targets. Christen Blum, Vice President of Renewables and Analytics Advisory at Edison Energy, walked webinar attendees through the process of understanding which renewable energy options are best suited to your business. We’ve compiled a summary of Christen’s presentation below along with questions posed to Christen by the webinar audience.

Q: Let’s start with the basics, what are the common types of clean energy sources to offset my emissions on my path towards net zero emissions?
A: Distributed Generation such as On-Site Solar and Storage, Green Tariffs, RECs, Community Solar & PPAs are the most common ways that corporations add renewables to their portfolios. Some organizations choose to utilize one source, but more commonly, companies will create a portfolio that optimizes a mix of different sources. Oftentimes, that portfolio will change over time – maybe more weighted to RECs at the start but increasingly adds in PPAs and Onsite solutions for additionality. This is illustrated in the following table:

Q: What is a PPA?
A: A power purchase agreement (PPA) for renewable energy is an agreement between a renewable energy developer and a buyer where the buyer receives each unit of energy produced by a wind or solar project in exchange for a fixed price. These transactions can be physical or financial (also known as a virtual PPA or VPPA). The buyer benefits in the transaction by receiving the environmental attributes (e.g. RECs) from the project and energy at a fixed price, which may be lower than the market. Depending on if the buyer has electricity load in the region, the buyer may be able to have the power delivered to their facility or used as a hedge against their power procurement costs. If they do not have load in the region, the buyer can still sign a financial or virtual transaction and receive the market revenues from the project selling into the market in exchange for the fixed PPA price. The revenue stream from the PPA enables the renewable energy developer to secure financing and build the project. Most PPAs are with new-build wind or solar projects and require a long-term commitment of 10-15 years. 

 Q: What is community solar? 
 A: Community solar is a solar project whose electricity is shared by multiple subscribers who receive credit on their electricity bill for their share of the power produced. Subscribers can include businesses, schools, and individuals. Community solar allows for access to solar energy regardless of the roof conditions or building ownership structure. Program availability varies by state and utility, but the most competitive community solar programs can provide fixed cost savings to an energy bill. These programs may require a 15-20 year contract and do not always include the renewable energy certificates (RECs) necessary to make greenhouse gas reduction claims. Read here for more details.

Q: What about onsite solar?
A: Onsite solar generation involves installing equipment to generate renewable energy at the location where it is consumed. Solar can be installed on company-owned rooftops, mounted on your land, or erected as canopies over parking lots. Onsite solar can be net-metered with the utility company, where surplus generation is delivered to the grid which results in a credit from the utility; or, onsite solar can simply serve onsite load directly. Onsite solar contracts may include the associated environmental attributes from the project and can reduce total energy costs for the buyer. In certain states, the addition of energy storage can also add economic and resiliency benefits. Onsite solar programs vary by state and utility. Read here for more details.

Q: Why do companies sign PPAs instead of just buying RECs? 
A: Companies looking to demonstrate sustainability leadership are looking at PPAs because there is a stronger sustainability story in terms of additionality than the purchase of unbundled RECs. The long-term contract to buy a project’s renewable energy is a critical factor in enabling the financing and construction of a new renewable energy project. PPAs can also be used to hedge against volatility in the energy market. In a physical PPA, the hedge value is realized because the buyer’s energy costs are kept flat. In a virtual PPA (VPPA), the value is realized when revenues from the VPPA increase because market pricing has risen above the PPA price – offsetting similarly rising retail electric rates. Read here for more information on the impact of a PPA. 

Q: If a company has a mostly regulated load and does not want to sign an out-of-market PPA or rely only on unbundled RECs, what are the options?
A: Many utilities offer green tariffs that companies can subscribe to for meeting their renewable energy goals. Each program is specific to the utility and the terms, pricing, level of additionality, etc. are different. While many corporations take advantage of these programs for some of their portfolio, they do tend to come at a higher premium than the expected economics of other options in deregulated markets. Refer to WRI’s Green Tariffs Map, which shows which states may be eligible for this program.

Q: As a real estate company with a large portfolio and footprint, my organization could pursue on-site solar. How do we know if on-site solar is a good choice for us?
A: When assessing the opportunity to install on-site solar, the first two questions to ask are: 1) What are the state and country policies regarding on-site solar? And 2) Do we have the space to install solar panels at a scale to be cost-effective? If the state’s policies and local mandates make on-site solar feasible and if your organization physically possesses enough footprint for rooftop, ground-mounted, or carport solar, there are a few other considerations. It’s important to remember that there are typically limits or maximums set to on-site solar, regulated by your locality - in other words, on-site solar can really be built at the scale of your on-site consumption. The ROI of on-site solar is the highest because of the direct ownership of the system, but this high return comes at the cost of a high upfront investment in the system and potential risks along the way. When organizations can plan for ten to fifteen years into the future, on-site solar can be a great option with a high return.


No matter which renewables options you select for your business, we recommend you have a plan to measure, report, and monitor your energy program performance. Consider a data analytics platform that will support your journey across your portfolio. From managing RECs to onsite energy generation, a data platform allows you to analyze energy production, cost savings, and return on investment generated by assets. Considerations should include providing transparency to support management and reporting of certificate allocation for robust GHG and energy reporting to measure and verify solar performance against average historical generation and performance guarantees. This type of reporting will allow you to compare financial returns against your business case and track savings from avoided grid electricity.

If you’d like to learn more about selecting the renewables options best suited for your business and best practices for accelerating your path to low-carbon you can watch the complete webinar recording here: “Optimizing the Pathway to Low-Carbon”.


As SVP of North America, Tanya March is responsible for Envizi’s business and partner development strategy for the North American market. As a founding employee at Envizi in 2007, she has played a pivotal role in developing Envizi’s extensive global client base. Tanya has a deep understanding of the technology underpinning Envizi and is skilled at working closely with clients and partners to deliver exceptional outcomes. Tanya brings to her role decades of senior executive experience in strategic business development and sales management.



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