The Clean Energy Buyers Association (CEBA) recently put out a detailed report. It focuses on the importance of corporate buyers as a segment in the rapidly growing U.S. clean energy market. Since 2016, corporate buyers have been a market stabilizing force. They have been responsible for more than 40 percent of all new clean energy capacity additions. CEBA currently has a strong membership of 400 businesses and organizations. This includes one-fifth of the Fortune 500 and together represent companies with a mind-boggling collective market capitalization of over $33 trillion.
This report truly underscores how powerful a force the corporate buyers have been on the industry. They have truly anchored project financing and are driving the vision of a future filled with reliable, economical power.
Corporate Buyers’ Influence
As a result, corporate buyers have grown to be key players in helping move more clean energy projects. Their involvement shows that any new renewable energy projects can attract the funding that they need to happen, lowering the risk of financial loss for a developer. The report nevertheless emphasizes the critical importance of companies’ voluntary leadership to commit to buy renewable power. Without these commitments, most of these projects will hit tremendous funding hurdles.
Corporations like Google and Starbucks are vital. Imagine the impact, for instance, of an e-comm company’s commitment, CEBA’s senior vice-president of U.S. strategy Misti Groves told us.
“It confirms that corporate buyers are critical to ensuring the US can build enough clean energy at the pace and scale that’s needed to meet skyrocketing power demand from the growth in artificial intelligence, electrification, and a resurgence in US manufacturing.” – Misti Groves
Unlike us, corporate entities may feel the pressure to quickly react to increasing energy needs. They deeply care about and are determined to lead the transition to a sustainable, clean energy future.
Virtual Power Purchase Agreements
An important aspect of this transition includes the use and deployment of Virtual Power Purchase Agreements (VPPAs). VPPAs allow corporations to sign long-term fixed price contracts with renewable energy projects. This innovative model ensures fiscal predictability for both purchasers and developers of the initiative. CEBA’s recent report shows that projects executed with Virtual Power Purchase Agreements (VPPAs) encounter much lower financial hurdles. In reality, areas such as MISO and PJM witness up to 90% of expected improvements, while ERCOT achieves an 80% improvement.
“So for our purpose, the role that corporate buyers play is huge, that just can’t be overstated,” said David Groleau.
“Corporate buyers are the backbone of clean energy deployment, anchoring project financing and shaping the future of reliable, cost-effective power.” – David Groleau
That strengthens the idea that corporate demand is key to maintaining this growth and keeping a consistent, corporate pipeline of use in the grid.
Market Transformation
Over the past ten years we’ve seen a clean energy revolution unfold across the U.S. marketplace, powered in large part by corporate demand. Emily Cohen, chief commercial officer at Primergy, highlighted this shift by stating:
“The acceleration of corporate purchases from clean energy projects transformed the US market over the past 10 years, providing developers and owners long-term, stable revenues on projects and a view on future demand to help maintain continued growth.” – Emily Cohen
As Cohen’s research shows, new markets are still developing today. As this unfolds, a tidal wave of corporations will start investing in clean energy themselves to unlock these advantages.