Report: States That Offer Clean Energy Choices Attract Corporate Interest

In 2015, commercial and industrial (C&I) buyers accounted for more than half of all signed wind energy power purchase agreements – even outpacing utilities. Those are among the top findings of a study released on January 10 by the Retail Industry Leaders Association (RILA) and the Information Technology Industry Council (ITI)

The report, Corporate Clean Energy Procurement Index: State Leadership & Rankings, written by Clean Edge on behalf of RILA and ITI, notes that retail and tech companies such as Amazon, Apple, Facebook, Google, Microsoft, Target and Walmart are among nearly half of the Fortune 500 companies seeking to locate operations in states with clean energy production, due to fossil fuel price volatility and pollution concerns.

The C&I market now comprises around 5 GW of contracted wind and solar power, with commercial customers intending to procure an additional 60 GW by 2025, according to REBA.

The list featured in the report of the top 20 states for corporate clean energy procurement “is intended to inform business leaders and guide state policymakers hoping to attract new job-creating businesses and foster economic growth,” the study’s authors state.

Top states

Among the top ten states (listed in descending order, from 1-10) are: Iowa, Illinois, New Jersey, California, Texas, Massachusetts, New York, Ohio, Rhode Island, and Connecticut.

Filling out the list (from 11-20) are: Maryland, Delaware, New Hampshire, Maine, Pennsylvania, Oregon, Nevada, Vermont, Oklahoma, and Virginia.

The index ranks all 50 U.S. states based upon the ease with which companies can procure renewable energy for their operations located within each state.

The index consists of 15 indicators, broken into three categories: utility purchasing options, third-party purchasing options, and onsite/direct deployment options.

Ways to advance growth

While there is no one-size-fits-all solution, the following actions at the state level would go a long way in supporting the growth of corporate renewables procurement, the research finds:

  1. Remove barriers to corporate deployment of both onsite and off-site renewable installations;
  2. Support the development of next-generation options to purchase renewable energy through utilities in regulated markets;
  3. Expand energy choice options for C&I customers in regulated markets;
  4. Ensure that an adequate market exists for renewable purchasing through both utilities and third-party programs; and
  5. Ensure that RE in both regulated and deregulated markets can scale up rapidly.

“As adoption of the cloud accelerates, so does the energy consumption of the datacenters that power the cloud. Meeting these energy needs with renewable energy is good for our business, the economy, and the environment,” said Dan’l Lewin, corporate vice president of Technology and Civic Engagement at Microsoft. “Our clean energy investments provide economic and sustainability benefits to the communities where we operate, while enhancing the reliability of the local grid. We hope this report will create opportunities to expand this work.”

“Walmart is proud to be recognized as a leader in renewable energy procurement, and we are encouraged that a number of states have made significant efforts to support the practice,” said Mark Vanderhelm, VP – Energy, Walmart. “Much work remains to be done, and we look to these efforts to determine the best practices that will drive the broader creation of cost-effective, customer-focused, and operationally sustainable renewable energy procurement programs.”

Barriers to growth

In addition to ranking all 50 states, the report identifies barriers that inhibit states from growing their economies through domestic renewable energy. They include over-regulation and high artificial taxes that shut state power markets off from competition and regional cooperation in order to protect legacy fossil fuel electricity production. It even includes examples of multiple states benefiting when they lower barriers, including a deal between an Illinois-based Ikea wind farm and a Virginia clean energy developer.

The results show a wide disparity in clean energy policy at the state level, making some states far more attractive to businesses that use large amounts of electricity, such as retailers and technology companies.

The report recommends that state policymakers focus on deregulating their power markets to enable customer choice of renewable energy and competition from renewable energy producers. It urges states to lower artificial taxes that target their domestic clean energy producers.

The report also recommends allowing businesses to have onsite production such as solar panels on their roofs or cutting-edge battery energy storage technologies to help ease power grid demands during peak times.

To back up its findings, the report includes specific case studies as examples where states succeeded and examples where barriers remain.

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