By: Mark Frigo, Vice President, Energy Storage
It costs less, extracts nothing from the earth, is storable, and puts a stop to climate change; solar energy is what we’ve been waiting for, yet not everyone is partaking in its life-changing benefits. What’s stalling the transition to clean energy, particularly among commercial and industrial customers, and what needs to happen in order to spread this solution? I answered these questions alongside other energy executives during the Wood Mackenzie Solar Series panel discussion, “Waiting for Something to Happen.”
What Moons Need To Align?
Nexamp currently manages hundreds of solar projects and has seen a 282+ percent growth since 2018. The market of solar plus storage is rising, but if we’re going to meet the ambitious goals laid out at the COP26 summit, we need to do more at a much faster rate. This renewable energy is quite simple to produce, and its cost-saving benefits continue to expand. With the addition of storage, both commercial and industrial customers can have easy access to a reliable future. Saying “yes” seems simple enough, only for these projects to really take off, a few moons need to align. The first thing you need to do when talking to a potential customer is ask, ‘Where do you want this use case to be, and what do you plan to use it for?’ Then you get into, ‘Do you want just renewables, or do you want storage on top of it? And really, what is the driving factor behind this use case?’ If they simply want renewable generation, instead of having on-site solar, they can subscribe to a community solar program as an entity. However, if they do want solar on-site, a number of things have to line up for their use case to make sense in terms of cost savings.
The ground floor is a great place to start. You need to determine, ‘Is there actually space for what they want to do at their facility?’ It can get potentially costly if retrofits need to be done. And in terms of seeing a lower cost tag, the pricing structure of the utility is a huge factor. If their provider doesn’t have high demand charges and or time-of-use rates, it may not make a whole lot of sense financially. It’s not that people are not interested in solar energy and storage solutions, it’s that each project has many phases of consideration. Are they investment grade or are they not? Do they want to do EPC and own it themselves? Do they want a third party? For a project to really become viable, everything needs to work together. And it’s not just the size of the load that matters, it’s the shape and how it fits into the utility rate they’re paying now. It’s really a big math exercise of whether it makes sense for them or not.
Is There Anything Else in the Way?
After years of rising temperatures, natural disasters, and rolling blackouts, most commercial and industrial customers are in agreement that things need to change. Not only to support our world but also the resilience of their enterprise. These solutions offer guaranteed power in good times and in bad. Sadly, as we’re seeing more of the latter lately, this transition needs to happen faster. It was never going to be easy, but with massive shipping delays in the mix, the industry’s growth has been tricky. As Nexamp leverages the global supply chain, we’ve had to tussle with the rising shipping constraints. Since COVID-19 began, shipping costs in China-U.S have surged 229%. The cracks in today’s modern supply chain are impeding solar’s growth and allowing outdated, inefficient energy practices to continue. But unlike supplies, earth’s resources are not being delayed, rotting on ships, or blocking Suez canals. They’re being ripped away, never to be replaced. It’s time to strike a balance and empower the people.
How Do We Spread the Light?
It’s only a matter of time before solar energy and storage solutions skyrocket across markets. But first, commercial and industrial consumers need to be reached and their needs met. Luckily, our veteran founders have yet to back down from a challenge. Nexamp is aimed at decarbonizing the world, and it’s leveraging solar plus storage to do it. We’re constantly looking to enter into new markets, and oftentimes, it’s that sustainability factor that really breaks through for customers. When you start talking about all the additional benefits solar could provide, many tend to open their eyes and take in the light. A huge plus in the solar column is of course, the potentially life-changing benefits of working with the sun to power the earth, probably how it was meant to be all along. Championing the customer who really believes in this type of solution is critical. One that is willing to follow through in terms of the approvals. Typically, it’s companies that have the executive team on board, those that are hiring sustainability specialists and tasking them with proliferating these initiatives across the organization that are successful.
Converting the world to a new energy system takes time. Today, solar and storage solutions are making their way into the commercial and industrial space, but we need a full-blown transition to right our world’s wrongs. Thankfully, this is where the Inflation Reduction Act comes in. The historical pro-climate investment unlocked $369 billion in funding, putting the U.S. on a path to roughly 40% emissions reductions by 2030. Just in one year, US companies have already invested over $270 billion in clean energy manufacturing (utility-scale wind, solar, & storage) and $70 billion in the electric vehicle (EV) supply chain, creating 170,000 clean energy jobs in the process.
This is it. Clean energy solutions are propelling us into a safe, equitable, and just future. We just need to spread them across the country, and Nexamp aims to lead the way.