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US wind and solar markets

Technology giants top list in bumper year for corporate procurement

And two more things you need to know about US wind and solar markets

2018 was the biggest year on record for corporate procurement of renewables in the US. Corporate customers contracted more capacity than ever before, signing a total of 22% of all wind and solar procurement contracts.

Tech giants take the lion's share

  • 109% Increase in corporate procurement of wind and solar power in the US in 2018
  • 35.1% Facebook, Google and Amazon’s combined share of US renewables market
  • 5.8GW New wind and solar projects procured by corporates in 2018

With corporate and industrial (C&I) procurement now a major driver of both wind and solar in the US market, we highlight key trends to watch.

 

1. Tech giants top the list

Facebook, Google and Amazon are leading the charge, with a combined market share of the corporate renewables market of just over a third (35.1%). Overall, technology and data companies make up the largest segment of renewable offtakers in the US.

Tech giants are turning to renewables not only to reduce electricity costs—data centres use 20% to 87% more electricity per square foot than comparable buildings—but also as a response to growing peer pressure for companies to be the most sustainable in their sector.

Falling wind and solar costs relative to wholesale power prices, alongside tax incentives, also make renewable energy attractive.

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2. Bumper year for solar contracts

Investment in wind projects has steadily increased since 2008, but for the first time in 2018, solar has recorded substantial growth. Overall, 2018 saw a 109% increase in C&I contracts for solar and wind combined in comparison to the previous year, mainly attributable to the increased investment in solar power. C&I procurement of solar is likely to remain strong through 2019 and 2020, partly boosted by favourable tax incentives.

3. Market flexibility to cater for increased demand

It’s not just big tech that is upping its renewable energy game. As an increasing number of companies pledge to reduce carbon and make commitments to achieve 100% renewable electricity sourcing, the industrial segment could overtake tech as the leader in corporate renewables.

To accommodate the increased demand, we expect C&I contract structures will become more complex and tailored to meet the needs of offtakers with varying energy consumption levels and risk tolerances.  

The development of standardised product offerings will open the market to a wider variety of corporate buyers seeking smaller, shorter-term offtake agreements. Tailored revenue or production insurance agreements will also help to reassure buyers concerned about investment risk.

Download the executive summary

The report, Corporate procurement of wind and solar in the US 2018, is only available to Wood Mackenzie Power & Renewables subscribers. Get a sneak peek of the report when you fill in the form on this page.