Solar Energy Options for Business Leaders
If you’ve ever suffered a serious sunburn, you know our home star is a pretty powerful thing. The sun is essentially a giant nuclear reactor, and it’s the most important source of energy for life on our planet. It generates more energy in one hour than humanity consumes over the course of an entire year. And down here on Earth, we’re able to harness that incredible energy to generate power.
Solar energy works by capturing sunlight via photovoltaic cells in a solar panel. These cells, typically made of silicon, contain positive and negative layers that create an electric field, like in a battery. This then turns solar power into zero-emission electricity for homes and businesses.
While renewables haven’t always been an economic option for replacing fossil fuels, prices have plummeted in recent years, putting solar in the spotlight for residential and business customers alike.
Solar Energy For Businesses
Given ongoing conversations around climate change, many businesses are doubling down on their renewable energy goals to offset emissions. Solar energy is an accessible, flexible method for businesses to leverage sustainable power.
Businesses can invest in solar energy in a few ways.
Power Purchase Agreements (PPAs)
Financial agreement in which a developer designs, finances and installs a solar energy system for a customer at little to no cost
Renewable Energy Credits (RECs)
Proof that energy has been generated on behalf of a customer from a renewable source
Virtual Power Purchase Agreements (VPPAs)
A purely financial transaction when a power buyer purchases a project’s renewable energy for a pre-agreed price
Self Solar Generation
Generating your own solar power by installing solar panels on your own properties with the ability to also store excess power in a battery
One is through use of solar power purchase agreements, or PPAs. PPAs are a financial agreement in which a developer designs, finances and installs a solar energy system for a customer at little to no cost. The developer then sells the power generated to the customer at a fixed rate, which tends to be lower than the rates of local utilities.
Alternatively, virtual PPAs have also become a popular option for switching to solar in recent years. Unlike PPAs, virtual PPAs are purely financial transactions. They occur when a power buyer purchases a project’s renewable energy for a pre-agreed price. This allows many companies and smaller buyers without energy expertise to make quick progress towards their renewable energy goals.
When buying and generating solar power, renewable energy credits (RECs) also come into play. A REC is proof that energy has been generated on behalf of a customer from a renewable source. The reason they’re necessary is because once energy is sent to the grid, there’s no way to tell how that energy was generated. Buying RECs guarantees that green energy is generated on your behalf.
Of course, businesses can generate solar power by installing solar panels on their own properties. As solar cell material development advances, prices drop, making installation more accessible to purchasers. Additionally, businesses with their own solar cells can then store excess power in a battery versus sending it back to the grid.