More than 10 GW of solar and wind capacity was installed in the United States in 2017, according to S&P Global Market Intelligence estimates. Driven by state renewable portfolio standards and declining costs, wind and solar capacity has grown at an average annual rate of 13% and 63%, respectively, between 2010 and 2017.
While state policy initiatives are the main factor responsible for the growth of renewable capacity, clean energy investments from commercial, industrial, and institutional, or C&I, entities have also been increasing over the last decade. Motivated by profitability and green initiatives, these companies use renewables as an investment opportunity, a pledge to increase demand for clean energy, and a chance to reduce the company's carbon footprint.
Each organization has a different objective: deciding whether to offset a portion of the company's electrical usage, for example, or to be one of the 120+ companies on the RE100 list with the ultimate goal of operating on 100% renewable energy. Currently, C&I accounts for around 13% of all renewable power currently installed or planned within the U.S. Of that 13%, wind accounts for 84% of C&I capacity.
Utilizing existing or new renewable resources, the C&I sector participates in multiple ways, providing flexibility for accomplishing each corporate initiative. Purchasing and selling renewable energy certificates is a one of the main mechanisms for participation.
One REC is the equivalent of purchasing one megawatt-hour of electricity generated from a renewable energy source. Another option is signing a power purchase agreement, or PPA, for several years' worth of a facility’s output. Some companies believe the advantage of using a PPA is that it provides a constant revenue stream to renewable energy developers and enables capacity to be built closer to the company's own load centers.
As a result, the funding can be used to develop and build new renewable plants. It is not uncommon for C&I companies to utilize both of these approaches, buying RECs and electricity via PPA from renewable plants. C&I capacity development also takes place "behind the meter," consisting of solar and wind plants built on-site. Although the scale is typically smaller than wholesale renewable facilities, distributed generation can also be used to fulfill C&I objectives.
S&P Global Market Intelligence estimated the total development of wholesale renewable projects in the U.S. attributable to C&I sponsors. Sponsorship is distributed across many firms, with most firms having less than 500 MW under development. Google leads in U.S. C&I renewable energy capacity, with nearly double the megawatts of the next largest company, Amazon. Together, these two companies own 20% of all renewable C&I capacity. S&P Global Market Intelligence estimates that the top 10 C&I companies account for 41% of currently operating and planned projects.
This report was produced using S&P Global Market Intelligence power forecast data.