So you’ve heard the news — if your business makes the switch to 100% renewable energy it will fast track your journey to net zero emissions, plus help future-proof your company for the decarbonised economy.
Understanding what you need to do is one thing, but knowing how to do it is another. Which is why we’re tackling one of the most common questions asked by employees: how do companies actually get renewable energy?
There are a few ways to source 100% renewable energy, and the one that works best for your business will be determined by a few different factors, most importantly, what your company’s power needs are. Are they large or small? Simple or complex? Spread across different offices, factories, regions and countries or all located in the one place?
To answer these questions, start with finding out how your company currently meets its energy needs. It will most likely be one (or a combination) of the following sources:
- Buying electricity from the grid: this is similar to how you probably buy energy at home. Your company will buy their energy from a commercial retailer and pay a regular bill based on your usage.
- As part of your lease: Some landlords include energy in the cost of your company’s lease on its office building. This makes things simple from a billing perspective, but it can make it more difficult to switch because it is out of your company’s direct control.
- Buying directly from a provider using a power purchase agreement (PPA): some companies negotiate directly with an electricity generator (like a solar or wind farm) and source their energy directly from them as part of a long-term agreement.
- Generating onsite: Organisations with large or special electricity needs or small, stand-alone office buildings sometimes generate their own power, by installing solar panels on their roof.
Do you want a step-by-step guide about how your business can make the switch to renewable energy? Access our comprehensive Renewable Playbook here.
Does that give you a few clues as to how your business could source renewable energy? Below are the three most common ways businesses do it:
Option 1: Generate your own renewable energy onsite
This might look like installing solar panels or wind turbines to power your office or factory operations. Keep in mind that if you want to make the claim of using 100% renewable energy, this will need to be across ALL the offices or sites you own, not just the head office.
Pros: An advantage of generating your own power is the control it provides, including insulation from price fluctuations and outages. It can also be quite a simple solution for a small business, with only one office for example, to implement.
Cons: A disadvantage of generating your own power is that it can be a more complex solution for a bigger business.
Option 2: Through a Power Purchase Agreement (PPA)
A contract with an existing renewable energy provider, such as a solar farm, is called a PPA. A PPA allows you to buy a certain amount of energy at a fixed price over a long term (7 to 10 year terms are the most common).
Pros: A PPA will likely save your business a lot of money over time, and is more suitable for larger businesses who are confident they will be using a significant amount of energy over a long period. Because they are long-term, once you’ve done the initial work, you won’t need to worry about your energy source for quite some time.
Cons: PPAs are very complex to negotiate and you will probably need assistance from an outside consultant, such as the Business Renewables Centre of Australia. They are also not normally the best approach for smaller businesses, and you will be locked into a contract for at least seven years.
Option 3: Using Greenpower
Most energy retailers offer Greenpower, which is a way to get credit for buying renewable energy through the grid. Retailers make sure that an equivalent amount of renewable energy is produced to match what you're consuming. It's like accounting, but for energy.
Pros: Normally accessing Greenpower simply involves ticking a box when you select your energy plan and for this reason it is often the most straightforward method for businesses wanting to make the switch.
Cons: Greenpower is usually slightly more expensive per kilowatt hour, as companies have to purchase the electricity and the renewable energy credit associated with it.
So, now you know the options for how your company can source renewable energy you can take the next steps and begin to build a business case for making the switch. If you’d like support on this journey, register your interest for our upcoming (free!) 8-week Renewable Energy Cohort Program.
Image by thelamephotographer via Shutterstock.