Onsite renewables are a smart way to cut emissions and energy costs
Installing solar panels onsite is a popular move among forward-thinking companies
There are two big challenges currently battling for the top spot on many corporate priority lists: managing rising energy costs and making progress towards net zero goals.
Energy prices remained steady for most of the past decade but in recent months, they’ve jumped sharply, and are showing no signs of returning to pre-crisis levels anytime soon.
At the same time, the pressure is on to cut operational carbon emissions across real estate portfolios. It’s leading to significant uptick in the adoption of renewable energy, and the speed at which companies want it.
Increasingly businesses are recognising that establishing their own supply of renewable energy makes good sense for the bottom line, as well as for the planet. Investing in onsite renewables is an opportunity for greater price certainty over the long term, turning a variable cost into a fixed cost and typically at a lower price.
It also allows companies to offset a portion of the energy they need from the grid, providing resilience, especially when paired with a battery.
And with real estate accounting for 40% of global carbon emissions, onsite renewable energy empowers businesses to act faster and more independently to deliver on their carbon reduction targets. It’s a progressive way of future-proofing a business and taking a significant step on the way to net zero.
Installing renewable energy
Solar power is by far the most popular choice of onsite renewables. We’ve worked with numerous clients to install solar panels on rooftops, in open fields and in parking lots via carports, so they can channel the energy they capture back into their operations.
We’ve helped the Washington Metro Transit Authority (Metro) to do just that, installing solar photovoltaic panels across 17 acres of its estate on unused land and in parking lots. The aim wasn’t just to generate renewable energy for Metro but also to create an additional revenue stream while supporting the District of Columbia to increase access to clean, solar power.
Together with energy business SunPower, we’re planning one of the largest community solar power installations in the U.S. Once complete, it will help to provide clean power for 1,500 homes and deliver in the region of $50 million in new revenue for Metro.
Adventist Health is another example of successfully adopting solar power. We worked with the healthcare company to establish onsite solar energy at campuses across California and Hawaii in a move that will help the business generate power for its sites, saving approximately one million dollars in year one across their hospital sites and tens of millions over the years ahead.
One of the key questions we hear from clients is what the return on investment from onsite renewables looks like – and what the timeline may be. The answer depends on several factors, from location to the cost of development, labor and commodity prices.
It’s about exploring opportunities to understand all the different options available and taking a holistic view. It’s not one-size-fits-all. Often, we start by identifying the sites in a client’s portfolio with the greatest potential for on-site renewables. We then conduct engineering and financial due diligence to determine the feasibility of installing renewable energy technologies, for example solar PV systems, before bringing high-quality developers to the table.
When it comes to maximizing value, economies of scale will always help to reduce costs. One example is thinking ahead to greater adoption of electric vehicles. Combining the installation of on-site renewables plus electric vehicle charging stations can drive down costs and help ready a business for the future.
A future powered by green energy
Onsite renewable energy isn’t just a growing topic for building owners. Many tenants are looking at how they can procure renewable energy from local grids to reach their 2030 net zero goals.
What’s more, we’re increasingly seeing tenants pushing their landlords for buildings that will help them deliver on their sustainability objectives. They’re making decisions on whether to stay or relocate based on issues such as the impact of premises on their scope 1 and 2 emissions, or whether a property has renewable energy provision.
That’s why having a clear roadmap to ensure long-term renewable energy provision – whether it’s on-site, off-site or both – works for everyone involved. There’s more than one solution to net zero. It’s about finding the right mix.
New tech is evolving all the time and that’s encouraging to see. Batteries have taken a huge leap in recent years, and the cost curve for those is coming down, allowing owners to store more of the energy that they capture at a lower price.
The transition to cleaner, greener energy is undoubtedly gathering pace. Generating and storing energy from renewable sources is a key part of the solution to decarbonizing real estate and meeting net zero goals.
For more information on the transition to renewable energy and installing solar panels onsite, contact our sustainability experts.
Kristy David, Senior Vice President, Clean Energy and Infrastructure, US