By Hugh Finlay
2016 saw American corporations, along with university and military users, accounting for 40% of contracts with American wind power companies. The main reason for this is that the price of renewable energy has dropped dramatically, thanks to better technology. The cost of wind power has fallen by 65%, and the cost of installing solar panels has dropped by 70%, in the past several years. Also American companies using renewable energy, can take advantage of tax cuts. The tax credit for solar power is 30% of the contract's cost, and the tax credit for wind power is over 2 cents per kilowatt. This means that renewable energy can be as cheap, or cheaper, than conventional energy.
General Motors is among the companies now using renewable energy, and is saving $5 million a per year because of it. Wind power will soon power 12 GM factories, and GM's aim is to get all its energy from renewable sources in the future. Since 2013, US corporations have made agreements to receive 7 gigawatts (GW) of energy (enough energy to supply a million homes) from renewable energy companies. By 2025 this figure is expected to be 60 GW.
Other companies using renewable energy are T-Mobile wireless, bankers Goldman Sachs, food company General Mills, and retailer Home Depot. More progressive companies, such as Amazon and Alphabet, have been using renewable energy for some time. Other companies using renewable energy are Johnson & Johnson, Procter& Gamble and Nike Inc. Many companies are motivated to get their energy from renewable sources because they see environmental issues as a threat to their business. An example of this is General Mills, which relies on a steady climate for the food production.
Another big customer for renewable energy is Walmart Stores, which is aiming to have half of its energy coming from solar and wind power by 2025. Walmart has installed solar panels on the roofs of many of its stores. This helps, but still is not enough to supply all their energy needs, so they buy energy from renewable energy companies. Walmart, and other big companies, do this by entering into power purchase agreements (PPA) with large renewable energy companies. With a PPA the renewable energy company usually sends the power straight into the grid. This contract, which lasts about 10-20 years, guarantees a steady stream of energy, at affordable prices, as cheap or cheaper, than utilities companies.
Most big companies enter into PPAs. A notable exception is the Swedish company, IKEA, the furniture retailer, which owns all its renewable energy sources, including 2 wind farms.
Since 2014, 100 large companies have made the commitment to get all their energy from renewable sources, and about 25 more large companies, join this group every year. Among the renewable energy companies benefiting from supplying these corporations are Pattern, NextEra Energy, First Solar and BNB Renewable Energy Holdings. The hunger for renewable energy is set to continue, according to industry commentators.