Consider Your Options and Determine a Strategy

After you have clarified your company’s renewable energy goals, the next step is to determine a strategy. However, there is not a “one size fits all” approach to achieving energy or sustainability goals. Given that these goals are usually fairly large and span multiple years, is important to evaluate multiple options before settling on and outlining your approach.

Consider your options

Broadly, companies have five options to pursue clean energy:

• Energy efficiency

• On-site generation

• Unbundled renewable energy certificates (RECs)

• Retail purchases

• Off-site generation

Energy efficiency

Energy efficiency programs can reduce electricity consumption, but unlocking this potential may require a lot of detailed work and often takes years to realize. Efficiency can offer attractive returns but requires capital (absent energy services companies or financing mechanisms).

On-site generation

On-site renewables generation most commonly involves solar photovoltaics installed behind the meter (whether directly owned, leased, or contracted via power purchase agreement). Depending on the particular policy environment, on-site generation can be economically attractive. However, for many companies the potential of on-site renewables is limited, typically to 5–10% of energy consumption, due to physical size constraints on their properties.

Unbundled Renewable Energy Credits (RECs)

Many companies purchase RECs (unbundled from electricity) in pursuit of their clean energy or greenhouse gas goals. Purchasing unbundled RECs is relatively easy. However, increasingly companies have begun to view the impact of this type of purchase as being insufficient.

Retail purchases

In theory, companies can purchase renewable energy directly from their utilities (via green tariffs or other programs) or retail choice providers (in provinces that have retail choice for electricity). However, despite progress in the number of utilities offering green tariffs or similar programs, they are not available in all areas, and most such tariffs and programs involve a price premium over brown power. Furthermore, most provinces do not have full retail choice for electricity, so companies have no option but to purchase from their utilities.

Off-site generation

This option includes both power purchase agreements physical and virtual (PPAs) in deregulated electricity markets as well as community-scale solar. The primary benefit of PPAs is the scale of the impact: a single transaction can result in material progress toward a renewable energy target. Community-scale solar, where available, combines some aspects of on-site and off-site generation: the impact lies somewhere between the two, but for companies without the appetite to contract at utility scales it may be a viable option.

Determine a strategy

Once you understand these options, you can develop a high-level strategy for achieving your renewable energy goal. This strategy is likely to involve some combination of the options described above. 

If you determine that off-site generation is part of your strategy, you should also consider certain high-level preferences:

• Size and portfolio - will you pursue a single, very large transaction, or do you prefer a portfolio of transactions? This in some respects is a question of expediency vs. risk mitigation.

• Location - do you prefer to contract for a renewables plant that is located near your facilities, or will you pursue the most attractive economics you can find anywhere in the country?