Small and Medium Businesses (SMBs) are increasingly entering the clean energy procurement space. While many large, experienced clean energy customers have laid the groundwork for a robust voluntary procurement market, most smaller energy customers are just starting. In a recent landscape analysis on clean energy procurement for SMBs, the Clean Energy Buyers Institute (CEBI) heard much to corroborate the idea that there are significant barriers to SMB engagement. We look forward to tackling these problems.
You’ll be happy to know, it’s not all doom and gloom. Experienced energy customers and service providers shared this wisdom for SMB clean energy customers that are just starting:
- Understand your business case for clean energy. If your company is getting into renewable energy credit (REC) purchasing for one year, anticipate being in the market for the next decade. Take a step back to determine what your company’s long-term commitment is going to look like. What are you trying to accomplish? Do you want access to renewables on-site? To make a claim that you are using clean energy generated in the U.S.? To have an effect on your local grid? Find a north star and communicate it to your REC broker or consultant to help them understand your goals and tailor your options. Otherwise, your company is likely to get caught in haphazard REC buying, which tends to be dissatisfying and much harder to sustain long-term.
- Get used to budgeting for clean energy now. Although SMBs have limited clean energy procurement options, unbundled RECs are typically an option for all types of energy customers. Buying unbundled RECs is an accessible entry point into the market because it helps a company to establish its internal motivations and get used to budgeting for the cost of clean energy. As markets open, the company may be able to shift costs toward other methods of procurement. If possible, seek out longer-term options like REC strip agreements. This can help lock in lower rates for the years to come.
- Employ a portfolio approach. Treat your energy activities with a wholistic approach. Where can you execute energy efficiency upgrades to reduce your need for clean energy procurement? Where are retail options or utility green tariffs available? Which of your company’s facilities may be appropriate for on-site generation? As you leverage these options, you may be able to reduce the number of unbundled RECs you need to procure.
- Engage your suppliers. Many SMBs do not own their own facilities, so some operational decisions — like energy efficiency and on-site clean energy generation — may not be in their control. Still, every tenant will negotiate a contract, and these negotiations are a prime opportunity to make a difference by raising sustainability concerns with a potential landlord. Explore the Clean Energy Buyers Alliance (CEBA) resources on engaging leased space owners and data facility representatives for insights on how to raise awareness of clean energy issues and potentially secure clean energy through your space providers.
The CEBI Small and Medium Business Accelerator (SaMBA) program is a collaborative effort to solve the toughest market barriers for smaller clean energy customers — and we want your input. Do you have ideas that may facilitate SMBs’ clean energy journeys? Do you want to stay informed as this work at CEBI progresses? Email email@example.com with your thoughts. CEBI and the SaMBA team would like to thank the Arthur Vining Davis Foundation for its financial support of this important work.