They say “nothing succeeds like success” – and with a new Administration that places a premium on economic accomplishment, this business maxim can be repurposed as a baseline for any industry looking to cement its standing in Washington today.
As the election results rolled in last November, many observers to the clean energy industry wondered how shifting political winds would affect the business of going green. Now, 100 days into a “pro-jobs” Administration and Congress, the corporate sector in America is still doubling down on buying into the renewable economy. This should be a sign to Washington that wind, solar and other sustainable energy technologies are poised for growth – not demise.
Here are three reasons why sustainable business can trump politics in Washington, and why renewables shouldn’t fall victim to partisanship in 2017.
1) The Economics Work
The first indicator that renewables can thrive in today’s political environment is based on simple economics. With zero fuel costs and relatively predictable pricing as far out as 20 or 30 years, renewables offer real economic certainty over volatile fossil fuels. The biggest companies in America recognize this and, to date, nearly two-thirds of Fortune 100 and nearly half of Fortune 500 companies have already set ambitious sustainability targets. Thanks to cost reductions for wind and solar, renewable energy power purchase agreement (PPA) prices are generally competitive with wholesale power prices, making these long-term contracts net cash flow positive over the life of the deal. And even for companies are not yet replacing significant portions of their direct energy use, using renewables to hedge against rising gas prices or to procure environmental credits at lowers costs can still be a worthwhile business strategy.
“The message from business leaders is loud and clear: clean energy benefits both the environment and the shareholder.”
When you consider that wind and solar costs have fallen more than 60 percent and 80 percent respectively since 2009, and are competitive with gas and coal prices on an unsubsidized basis across much of the country today, it’s not surprising that many corporates are rushing to find ways to take advantage of this economic opportunity.
2) Companies Are Already Closing Transactions
Large scale, offsite renewable energy for businesses isn’t an abstract concept – it’s already happening. To date, corporate procurement of renewable energy has accounted for more than six gigawatts (GW) of clean power covering a mix of solar, wind and biomass. And by 2025, companies have pledged to procure and additional 17+ GW of renewables. To put this in perspective, one gigawatt can power roughly 750,000 American homes. With 17 corporate renewable energy transactions completed in 2016 by 13 different companies (including seven buyers who were new to the market), it’s clear that clean power for corporates is viable today and American business is ready to take advantage.
3) A Clean Energy Economic Benefits Everyone
Just recently, 20 state governors – 12 Democrats and eight Republicans – sent a letter urgingPresident Donald Trump to support renewable energy. Noting that renewables offer consumers “nearly unlimited electric energy with no fuel costs, no national security impacts, and a number of environmental benefits,” the governors group urged the President to consider that renewable energy offers advantages to Americans across the political spectrum.
For major companies, the message is the same. In early 2017, a group of 600 businesses signed a letter calling on then President-elect Trump to remain committed to the Paris Climate Agreement. Their reasons were not political – instead their letter articulated a desire for “the US economy to be energy efficient and powered by low-carbon energy,” and noted that “failure to build a low-carbon economy puts American prosperity at risk.” Among the companies signed onto the letter were eBay, Gap, General Mills, Hewlett Packard, IKEA, Intel, Lyft, NIKE and Starbucks. The message from business leaders is loud and clear: clean energy represents a double bottom line opportunity to benefit both the environment and the shareholder.
Simply Put: The Market Has Spoken, Cleaner Energy Is Good For Business
For many Fortune 500 companies, sustainability is an opportunity to enhance their brand while also doing good for the environment. These are not policy-driven ideas either – companies are recognizing that customers prefer brands that take action on sustainable business practices.
And this holds true for the foreseeable future too. At the Business Renewables Center’s Fall 2016 conference in Detroit, MI, 67% of conference attendees said they would make no change in their renewable energy plans following the election. 25% of attendees said they are actually planning more U.S. renewable energy engagement than previously planned. Of the entire room, just 3% of attendees indicated that the election results could cause them to reduce their engagement with renewables.
If our nation’s political leaders are serious about boosting America’s economy, policies that are inclusive of renewable energy technologies will far outweigh policies that limit innovation. American business leaders know this and they are already acting accordingly. Congress, the White House, state governors and everyone in between should follow suit.
Opinions represented in this piece are the author’s entirely and are not necessarily reflected by any employer or affiliate