Why are technology firms betting big on solar energy

By: Janifha Evangeline

Amazon – the ecommerce giant recently announced its 1st utility-scale renewable energy projects in the country - 3 solar farms located in Rajasthan. These consist of a two hundred- and ten-megawatt project to be developed by ReNew power, and a one hundred- and ten-megawatt project to be developed by Brookfield Renewable and a hundred Mega Watt project to be developed by Amp Energy India.

"Combined, these solar farms have the capacity to generate 1,076,000 megawatt hours (MWh) of renewable energy per year, enough to power over 360,000 average-sized households in New Delhi annually," the company said in a press statement.

While the global economy is working on switching energy sources, rapidly, the planet is shifting to alternative energy sources & moving away from carbon-based fossil fuels, including renewable energy owing to concerns related to climate change.

Tech giants like Google & Amazon have started to invest in renewable energy projects, that demands more from organizations to reach net-zero. Since technology firms have been looking for several ways into the energy market for some time, most of the tech firms have begun to invest largely in energy acquisitions for supporting their net-zero initiatives for technology development.

Energy buy-in by Tech giants

The energy industry is getting a lot of interest from a group of 6 corporations that include Amazon, Facebook Inc., Alphabet Inc., and AT&T Inc., Total Energies, and Microsoft Corp. 4 of these are the largest global tech firms. these global corporations account for thirty per cent of the energy industry, that is acquired by huge corporate buyers, as per research by BloombergNEF.

Michael Terrell, Director of Energy at Google, told the Wall Street Journal, “it’s almost like a stampede for clean energy.”

The issue which originates from the buying of

renewable energy is that technology firms are under pressure for proving their practices are in line with net-zero standards. Companies are in the process of determining the optimal times for energy production. One such company is Microsoft and it is undergoing an analysis of renewable energy sources

“Just because you put a clean electron on the grid doesn’t necessarily mean you’re displacing a carbon-based electron,” says Brian Janous, General Manager of Energy and Renewables at Microsoft.

How & why are tech giants switching to solar

Firms to a greater extent are also observing the benefits they could gain of the expanding solar as well as storage market. for instance, the headquarters of Apple in Cupertino is controlled by a microgrid with battery storage, & Microsoft engineers have started to test battery storage at the Microsoft’s data centers.

Furthermore, states are rendering incentives for businesses increasingly which add solar as well as storage to their electricity-generating portfolios. MA SMART (program) in Massachusetts, the SGIP program in California as well as the VDER structure in New York are making solar as well as storage a smart decision for businesses increasingly. While storage by itself will not help in generating the sufficient revenue for organizations, combining it with solar renders the business owners the access to the investment tax credit & on-site generation capabilities when there is any outage and both the options help save firms money as well as improve the profit margins of businesses.

Information Technology goes renewable

Information & Communications Technology is in the supply chain of almost every firm & is 1 of the industries which has to gain the most. A study conducted in 2015 by ICT academic Anders Andrae predicts that the Information & Communication Technology industry could be responsible for twenty per cent of all electricity consumption by the year 2030 with data centers as well as network transmission as the main consumers. It is not just a huge sector, but it is growing rapidly than any other & electricity is a major cost for data centers. therefore, it is not surprising that the big international cloud players are going ahead of the curve on renewable energy corporate PPAs.

The road ahead

Although the early movers on renewable energy got RECs & promoted their efforts for improving the renewables mix in the grid, it has now become a main source of differentiation over the last few years.

This is to show as to exactly how much “additionality” a firm is providing to the supply of renewable energy - overall through its commitments. As a result, there has been a increase in direct investment in renewable energy projects, specifically co-located to energy-hungry facilities like data centers, factories as well as breweries.

BloombergNEF estimates that the RE100 firms would generate 105GW of new solar & wind power construction if all them contracted under PPAs meet their commitments, globally.