There’s no question, the energy landscape is changing drastically for today’s commercial and industrial (C&I) customers. Where electricity rates were once the primary (or only) driver on many siting and operational decisions, now those conversations might revolve more around where climate and regulatory conditions might best support onsite solar generation – often paired with a battery or energy storage system (ESS). Certainly, current monthly costs still play a critical role in these discussions, but now the ability to control costs for the future – along with a recognized need to meet sustainability promises throughout corporate operations – are forcing a push toward greener power options.
Sustainability as a business necessity
That push is showing up in sales figures, with the Solar Energy Industries Association (SEIA) expecting 20% year-over-year growth in commercial installations for 2021. While this high figure is based on a possibly pandemic-related drop in 2020, it still anticipates continued commercial market growth at a healthy 5% per year beyond 2022. Supporting this growth are corporate initiatives to drive down not only their greenhouse gas emissions but also those of their suppliers. The three-tiered Greenhouse Gas Protocol incorporates a Corporate Accounting and Reporting Standard that requires participants to evaluate emissions from their direct operations (Scope 1), emissions related to purchased electricity and steam (Scope 2), and emissions produced by their supply chain (Scope 3).
The impact of supply chain reductions is quite possibly enormous. For example, in June, Toyota Motor requested its tier-one suppliers reduce carbon dioxide (CO2) emissions by 3% in 2021 versus 2020. Initially, this announcement would only impact the manufacturer’s 300-400 biggest suppliers. But each of those companies has its supply chain, so the initiative could ultimately impact up to 30,000 companies around the world. With that kind of ripple effect taking place across multiple industries, it’s easy to see how your organization, large or small, could face similar demands from its corporate customers.
Devils in the details
However, especially for companies new to solar solutions, it’s important to work with partners who know the right questions to ask to ensure finished projects are as good for their bottom lines as they are for the environment. This is particularly true for those organizations with a national property portfolio to support. Because electric utilities are regulated at the state level, and every state has its catalog of regulatory carrots and sticks when it comes to renewable energy, an approach that could work at one location might be completely wrong in another.
A key point to understand in this process is that C&I projects are not just smaller versions of utility-scale installations. Experience working with utilities won’t necessarily translate to this market. Utilities have different business goals and regulatory frameworks than commercial enterprises, so there’s a different set of factors that need to be penciled out for a C&I solar project to prove a success.
How to plan for success
So, what should C&I managers planning new or expanded solar efforts be looking for in a development partner? I believe the following characteristics are among the most important:
- Experience. If you’re a regional company, you want a partner with at least seven or eight completed projects at the same scale as what you’re planning. For national companies looking to roll out across multiple regions, look for advisors who’ve worked in at least five different markets, with projects at the scale you’re considering.
- Expertise. Again, C&I-specific knowledge is key. Also, look for developers with a dedicated legislative-policy team that tracks regulatory issues in the regions in which you’ll be working. Rules and incentives are changing all the time in ways that can significantly impact future success if they’re not addressed in how projects are structured.
- Financing. Often, developers will find a site that looks appropriate and then shop for outside financing. This approach raises added risk regarding that third party’s eventual performance. So, look for a partner with internal financing options to help ensure you’re getting the full financial details of a project upfront before any contracts are signed.
- Battery Storage experience. Today, making the most of a solar investment increasingly means incorporating energy storage into the plans. But this isn’t just a simple project upgrade, because there are multiple ways storage can add financial value that can vary by region and state. You need a partner who can help identify how a system will be utilized, with a strategy that works both now and for the long term.
Visit Empower Energies to learn more about C&I solar and storage development. There you’ll find the opportunity for a no-cost assessment that can make it easy to start or expand your company’s renewable energy program.