When you think of corporations that invest in renewables, Google and Apple probably come to mind. In fact, these two Fortune 500 companies — two of the first to purchase large-scale, off-site renewable energy — are now powered with 100% renewable energy.

But it’s not only these early movers that are venturing into renewables. More and more corporations, of all sizes and locations, are now joining the renewables revolution.

From 2008-13 there were only four corporate buyers of large-scale renewable energy: SC Johnson, Walmart, Google and Apple. But in the past five years, 51 new buyers joined the market. In fact, 2017 was a benchmark year with corporations purchasing 2.78GW. And 2018 looks to be following the same path, with eight new buyers and more than 2GW of purchases to date.

So, what has changed?

Corporate strategies, technologies, and innovative deal structures are all aligning to create a tipping point for corporate purchasing of large-scale renewable energy. We’ve reached the critical point in which renewables are an obvious choice for the top 2,000 companies worldwide. Below I list the three reasons I think we have reached this tipping point.

1) Inertiais shifting. More companies have renewable-energy goals than ever before. In fact, 131 corporations, from Adobe to Kellogg, have committed to go 100% renewable. A report from the WWF, Calvert Investments, CDP and Ceres found that while only 5% of the Fortune 500 had a clean-energy target in 2014, almost half of them have one today. Companies are setting renewables goals not only because it’s what their customers want, but also because it makes good business sense.

The WWF report showed that clean-energy investments by 190 Fortune 500 companies saved them nearly $3.7bn in 2016 alone, as well as decreasing annual carbon emissions by 155.7 million tons, equivalent to taking 45 coal-fired power plants offline.

2)The financials work. Renewables have not only come way down the cost curve , but buyers can now shape their purchases to meet demand. For example, companies are now choosing between wind and solar to meet off-peak and peak demand respectively, adding storage into the mix, and even integrating on-site solutions for a portfolio approach. Plus, many corporations in regulated markets are using green tariffs, which allow them to work with their utility to purchase up to 100% of their electricity from renewables at a fixed rate.

3) Deals are de-mystified. The deal structure now also works for smaller companies, not just large multinationals. For example, while corporate PPAs used to be for large companies like Microsoft and AT&T that want to purchase 300-500 MW, there are now models that work for smaller companies like Akamai and Ingersoll Rand, that may only need 7-22 MW.

And not only is size no longer an issue, but renewable energy deals are much better understood. Buyers are sharing knowledge and helping each other with deals, as happens at the Business Renewables Center Buyer’s Bootcamp, which brings corporate buyers together to discuss the challenges, risks, and regulations involved in PPAs and virtual PPAs.

Where we’re headed

The market is definitely maturing. Now that corporations have mastered the basics of purchasing large-scale renewable energy, many are looking to be even more effective in their carbon reduction strategies. One way to do this is to ensure that the renewable energy they’re purchasing is displacing energy from the most carbon-intensive sources.

Corporations can also increase their impact by enabling others to participate and benefit. For example, Microsoft recently purchased 315MW of a 500MW PV project in Virginia, which allows smaller buyers to buy the remaining power at competitive rates.

Another way corporations can increase their impact is to work with suppliers to reduce emissions from their supply chain. Walmart’s Project Gigaton is working with several hundred suppliers to help them reduce their emissions, with the goal of reducing emissions from the company’s value chain by a gigaton (one billion tons) by 2030.

I truly believe we have reached the tipping point where purchasing renewable energy is the clear choice for corporates. And as the where and how of such purchases evolve, the impact will only get greater. 

Miranda Ballentine is managing director of the Business Renewables Center at the Rocky Mountain Institute