Reasons For The Huge Corporations Going Solar
Businesses all over the world are rapidly going through green energy transition. And this exceptional rate of solar adoption clarifies that positive PR and wanting to reduce carbon footprint are not the only reasons fuelling this growth. The reason is much more complex. When a company chooses to go solar, they are actually incorporating a triple bottom line strategy, which is expected to offer greater business value through better performance in social, environmental (or ecological) and financial frameworks, in a nutshell, it is about maximizing returns through offering better solutions for people and the planet.
The strategy must be working for them as international companies like- Amazon (33.6 MW), Macy’s (38.9 MW), IKEA (44.9 MW), General Growth Properties (50.2 MW), Apple (79.4 MW), Walmart (149.4 MW), Google, Facebook etc are ramping up their solar capacities year after year. Not just the giants, small and mid-sized companies are too showing interest in going solar. Companies in India are also showing an affinity towards solar adoption, backed by Government’s continuous efforts at solarising the country. A few of the Indian companies that have opted for solar are- Schwing Stetter (100 kW), Grundfos Pumps (150 kW). Other Indian companies that have or are in the process of installing solar are- United Breweries, Infosys, Tata Motors, Hatsun Agro, Hindustan Coca-Cola Beverages (HCCB), Airtel etc.
Components that are driving solar adoption in commercial sector
What is the deciding factor for companies to go solar? To answer this question we must go through business requirements layer by layer.
Energy Requirement: Energy requirements are quite higher for a mid-sized to a large business organization. Even small businesses need constant access to power to flourish. And as the fossil fuel reserves further deplete, and population growth rises, the conventional energy distribution is going to get inconsistent. Developing countries like India are already suffering from energy deficit and transmission issues. In such a scenario, adopting solar seems to be a smart move, as it can offer un-interrupted energy supply with ease. And with the demand growing, it is suspected that corporate solar market in India could amount to 10,000 megawatts (MW) by 2023.
Energy Expenses: Conventional energy expenses are suspected to rise considerably, carving out huge chunks of money from business profits every year. The best way to save on energy expenses is to generate the power yourself. In such a scenario, solar stands a viable option to generate energy, thus saving money in the long run while satisfying energy requirements. In the same breath, we need to highlight that Indian IT giant Infosys gets 43% and Grundfos Pumps gets 26% of its power from solar, already saving up on electricity expenses. This clearly testifies the relevance of using solar to power commercial infrastructures.
Carbon Emission: Besides ensuring access to energy and saving on electricity bills, solar can help reduce carbon emissions, which stands as a necessity for commercial entities now. And as, 1 kW of green energy can reduce more than 3,000 pounds of CO2 annually, solar stands as the best option for commercial entities to avail and aid in restoring the climate.
So, it seems that the numbers add up, solar and business are just meant to go together. And in the same breath, we need to highlight that as the cost of buying an installing solar has decreased considerably in the last 5 years, the economics of opting solar has become more attractive.
It is a fact that in developed countries, solar adoption in the corporate sector is at an advanced stage. However, in developing countries like India where solar is only at a nascent state, there are many challenges to overcome.
Impediments in sight
In most cases, there is confusion surrounding policies concerning the corporate use of renewable energy in India. Components that could have supported the growth of solar in the commercial sector, are surprisingly making things more challenging for the sector. For example, we can say that- delays in implementing net metering, hike in GST rates on projects, imposing a cap on the capacity allowed for net-metering, efficient energy evacuation and distribution infrastructure, delays in disbursal of subsidies, hurdles in getting Government approvals- are acting as hurdles in the path to solar growth. Therefore, commercial entities may face delays in project execution, which leads to loss of finances.
Besides these issues, recent 25% safeguard duty imposition on SEZ based domestic solar manufacturers and lack of flexible financing options for solar projects are limiting Indian solar industry growth and keeping commercial entities from going solar. The development highlighted above, clearly shows that Indian commercial sector is pro-green energy transition and they are trying to follow footsteps of international companies.
So, it is time for the Government of India and commercial industry leaders to work together in order to re-prioritize the solar sector and illuminate the nation.