In Times of Uncertainty, pt. II: Responding to Change

December 19, 2017 Jenna Bieller

Achieving Sustainability Goals in Times of Uncertainty is a blog series launched in response to an outcry for support from energy and sustainability professionals. The confluence of recent regulatory and trade restrictions at play in the United States, namely the Suniva solar trade case, proposed power market rule changes, and corporate tax reform, has led to uncertainty in the renewable energy industry as we enter 2018. The availability of renewable energy is critical for organizations to meet sustainability goals. In this series, we intend to provide guidance renewable energy buyers need in the face of an uncertain regulatory environment. While this series is directed at U.S. professionals coping with these changes, the content is intended for all. To begin with the introductory blog in this series, click here.

How do I advance my company’s goals in times of such uncertainty and potential change? Should I press pause while regulatory battles play out? These are salient questions for today’s energy and sustainability managers. As the tax and regulatory measures play out in Washington, individual actions taken while we sit with uncertainty can make a difference.

Progress in the regulatory environment is happening rapidly, but the path forward remains opaque.  In the meantime, while the regulatory environment clears, here are 3 steps C&I energy buyers can take to be proactive:

  1. Work with A Trusted Advisor48353775 - steppe summit success

It’s never been more crucial that the partners included on your sustainability journey are authentic, unbiased, and experienced.  Approximately 60% of C&I offsite power purchase agreements (PPAS) executed in 2017 relied upon a third-party advisor due to the complexity of these contracts and the internal engagement processes required. A trusted advisor will provide a transparent, comprehensive view of the best renewable energy opportunities in the market as it pertains to your company’s unique aspirations. No two sustainability strategies are exactly alike and no single cleantech solution or sustainability program will fit the needs of every company.

Advisors also have the market access and knowledge to explore a wide range of renewable options, independent of supplier, technology, or region of the world. In times of uncertainty especially, a reputable advisor will have eyes on the market and ears on the ground when it comes to policy and regulatory changes, allowing your team to focus on what drives your business forward.  The right advisory will provide regular updates on market shifts along with disseminating information and education to its customers.

  1. Explore Ways to Diversify Your Energy Portfolio

Regardless of political or economic turbulence, it is wise to employ a variety of techniques toward meeting a sustainability goal. This helps protect you from the price and political volatility that are so familiar to the renewable energy industry, and works to balance risks across a mixture of assets and technologies.

Potential portfolio considerations:

  • Have you conducted an opportunity assessment of the locations where you have energy load and the available cleantech options in those regions?
  • Are you employing global energy attribute certificates (EACs) to supplement your direct project activity and meet your goals?
  • Have you explored the feasibility of investing in onsite renewable solutions?
  • Have you looked at incorporating innovative, resilient technologies such as microgrids and energy storage?
  • In what regions of the world have you identified opportunities for efficiency and sustainability improvements? Are you aware of technology, tariffs, or potential incentives available in those markets?
  • Are you plugged in to a source of information and education—like the NEO Network—to keep apprised of market changes and opportunities?

Whether you are well along the way to meeting your goals or you are just embarking on your journey, there is always room to diversify, and an uncertain U.S. regulatory environment presents an ideal opportunity to consider these additional portfolio strategies.

  1. Stay the Course—with Caution

As simple as it sounds, it is in your company’s best interest right now to hold tight, and maintain progress on your goals while regulatory decisions unfold. According to the best analyses, the current situation is not cause for alarm; it is not the time to hit the panic button or abandon ship. The precise outcome of the aforementioned policy proposals in the United States are in flux, but there is one thing we know for certain: renewable energy and cleantech, globally, are on an unstoppable growth trajectory. The movement toward renewable power and sustainable operations is not a fad and opportunities around the world are emerging with rapid pace.

“You can’t stop the tide by building a moat.”  John Powers, VP of Strategic Renewables, Schneider Electric

The momentum towards adopting renewable energy at scale will not be cut short by unsupportive federal policies. In fact, quite the opposite has happened in the United States thus far, as a new administration has carved out the opportunity for businesses to demonstrate leadership through bold climate action.

In the past year, businesses across America have doubled-down on renewable energy; 118 multinational companies have joined the RE100 and an impressive 328 more have committed to taking climate action via the Science-Based Targets Initiative. Companies procuring renewables through PPAs have announced an astounding 2.8 GW of renewable deals in 2017 in the United States alone, with global opportunities in India, Mexico, Australia, and markets in Europe picking up speed.

Even as of this writing, it appears that pieces of the tax legislation—including the Alternative Minimum Tax and changes to the wind power Production Tax Credit—have been altered or amended, and this does not include the other trade considerations also moving through Washington.  It will take several months for the full impacts of these changes to be understood, so a cautious approach becomes imperative.  However, should present law be unaltered in the final tax bills, for example, C&I buyers do not want to lose ground on existing projects or considerations.  Our best advice? Keep going on your present course, but with open eyes and full awareness.

From one renewable energy advocate to another, we know dealing with uncertainty can be challenging. We urge you to consider your options, and if necessary, think outside the box when it comes to meeting your sustainability goals. Planning for change by working with experienced partners, diversifying your portfolio, and considering new strategies are the first steps to winning even in the face of market uncertainty.

We invite you to follow this blog series and attend our interactive webinar in January, where you will have the chance to talk directly with our experts about regulatory implications for C&I renewable energy buyers.  We also welcome your questions and invite you to reach out to our team any time

To continue to blog 3 in the series, what will happen to the U.S. renewable energy market, click here.

 

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