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More US companies show interest in renewable energy

Half of the US companies which currently do not support renewable energy are considering options to generate or buy renewable energy, or at least to purchase renewable energy credits.

A large percentage of companies that already produce their own energy or buy renewable energy are exploring the option of increasing the amount, explains Enterprise Renewable Energy Adoption Survey: Benchmarking Onsite Renewable Energy Generation, Purchasing & REC Buying produced by the trade publications Environmental Leader and Retailer Daily.

The report includes in-depth case studies of JCPenney, United States Postal Service (USPS), Costco, United Parcel Service (UPS), Green Mountain Coffee and other firms, to explain the 'what, why and how' of starting a renewable energy programme and a renewable energy implementation roadmap.

Finance is most important consideration

“Of all the varying factors that go into an enterprise’s decision to enact a renewable energy programme (brand image, corporate responsibility, future viability of fossil fuel), finance is the most important of all, as would be expected of a business decision,” it explains.

“In virtually every question asking respondents why they did (or did not) make a certain decision regarding a renewable energy implementation, a financial consideration was the top answer.”

Companies which generate energy onsite, purchase renewable energy from a third party or purchase RECs (renewable energy certificates) indicate that they are most likely to expand use in the coming year. Companies currently not using renewable energy indicate that they are more likely to start within five years.

“Retailers seem more inclined than other industries to act quickly on implementing renewable energy programmes,” explains study co-author Dan Berthiaume. “25% of retailers surveyed, that are not currently using renewable energy, plan to incorporate it within one year, compared with 12% of enterprises in general.”

Study designed to aggregate use of renewable energy by companies

The report presents a comprehensive survey on corporate renewable energy use including the return on investment (ROI) of renewable energy programmes, how many companies are using renewable energy, where renewable energy is being used, the percentage of renewable energy in relation to conventional energy, how much the companies spend on renewable energy, and renewable energy plans for the next five years.

“Somewhat surprisingly, ROI is not a significant factor in most renewable energy decisions,” the report notes. “This indicates that while renewable energy does currently offer enough overall savings to make it a worthwhile investment for many, when all costs are factored in the ROI is not exceptionally high, suggesting that secondary factors such as brand image and corporate responsibility are also playing a role.”

The report states that 40% of respondents spent more than US$1 million and another 20% spent more than US$500,000 to implement onsite renewable energy generation. One-quarter of respondents who purchase RECs do so for branding or image reasons, while 20% do so out of a sense of moral obligation.

“Survey takers point to finance as the most important factor in the decision to enact a renewable energy programme,” adds co-author Lance Jungmeyer, “Adoption by competition, as well as branding, are not strong drivers.”

Government incentives are key to affordability

State and federal incentives are typically key to making onsite energy generation affordable, it explains. The 12% of respondents who did not pay for installation shifted the capital costs to their provider through power purchase agreements and, with one exception, the remaining respondents offset less than 50% of the cost through incentives.

For companies which purchase renewable energy from a third party, wind is the most popular resource at 72%, followed by solar at 43%. Hydroelectricity was purchased by 23%, biomass by 19%, biofuel by 19% and geothermal by 11% of respondents.

For renewable energy projects, the ROI was negative or flat for 20% of companies, but was higher than 15% for one-fifth of companies.

Survey conducted online with follow-up interviews

Environmental Leader and Retailer Daily polled their readers through online surveys for the results, complemented with surveys and interviews with case study participants late last year. There were 540 online responses, of which 198 were US non-vendor companies, 193 were vendors and 147 were companies without US operations.

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