On-site renewable generation with distributed energy
resources (DERs):
Many commercial buildings are suitable for the installation of rooftop solar panels
(the most common and fastest-growing type of DER), which can provide enormous
cost savings in the long run, reduced emissions, and security of price and supply
from a local, decentralized energy source. Other DERs to consider include electric
vehicles (EVs), small-scale hydroelectric dams and natural gas generators,
biodigesters, and battery storage. Benefits of distributed energy resources include
lower-cost energy, system-level capacity, operating reserves, distribution-level
capacity, and net value to the electricity grid, like avoided infrastructure
investments, improved resilience, and increased integration of clean energy.
Savvy firms may also consider the potential to sell excess energy back to the grid.
'Positive energy buildings' produce more energy from onsite renewable sources
than they consume. Keep in mind that several cities are introducing building-
specific requirements for renewable energy to be applied to new buildings. In New
York, for example, all new buildings and buildings undergoing major roof
renovations are required to be covered with solar panels, green roofs, or some
combination of the two. In Miami, from 2022, all new buildings (and existing
buildings undergoing a major retrofit) are required to be "solar-ready" and "(battery)
storage-ready".
LEVERS FOR DECARBONIZATION
Procuring Off-site renewable generation:
Power Purchase Agreements (PPAs): Commercial real estate firms can enter into
power purchase agreements (PPAs) with renewable energy developers to purchase
renewable power for their buildings. Under a PPA, the renewable energy developer
builds, owns, and operates the renewable energy project, and sells the power
generated by the project to the firm at a fixed price. PPAs can deliver the energy
physically to a company through the grid or can be financially settled transactions
(i.e., virtual PPA or vPPA). This option allows firms to access renewable power
without the need to invest in on-site renewable energy generation, and it can
provide stable and predictable energy costs.
Green power purchasing: Commercial real estate firms can purchase green power
from their electricity provider to offset the carbon emissions associated with their
energy use. Green power is renewable energy that has been certified as being
generated from renewable sources, such as wind or solar, and purchasing green
power can help firms reduce their carbon footprint and support the development of
renewable energy.
Sustainability & Energy Management Simplified
