Over the past few years, multi-billion dollar corporations like Apple, AT&T, Facebook, Google, General Motors and Walmart have signed long term power purchase agreements (PPA) with major wind farms and solar parks. The move to renewable energy by these industrial behemoths is being driven by economics and corporate stewardship.
The cost for renewable energy such as wind and solar with battery storage has fallen dramatically over the past decade. The cost for electricity with a 15 year to 20 year PPA can be as low as U.S. 2.7 ¢ per kWh. The average price for electricity from utilities in the United States is U.S. 13.30 ¢ per kWh.
Renewable energy prices are stable, unlike fossil fuels which can experience dramatic price swings, based on global supply and demand. Most major corporations also consider renewable energy a critical component in corporate stewardship.
Major corporations have effectively underwritten the construction of new renewable energy projects, once they sign long term PPA. In 2017, over 50% of America’s wind energy was dedicated to multi-billion dollar companies.
The private sector is usually quick to recognize a financial opportunity. Smaller companies in America, like Swiss Reinsurance Company and Nestle are now coming together to sign major, long term PPA. This strategy is enabling more companies to buy clean, low cost renewable energy. In 2018, American companies have already committed to buy 5,900 MW of power from renewable energy projects, more than double the total from 2017.
In my opinion, the private sector is making the move to renewable energy significantly faster than most utilities. America’s move from fossil fuel to renewable energy isn’t being driven by state or federal mandates, but my economics and the corporate stewardship of the private sector.