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While solar technology continues to advance and the total cost of ownership (TCO) continues to improve, many organizations — consumer goods companies specifically — have cast more than a shadow of a doubt on solar as an option for their energy mix. This can be for a variety of reasons, but the most common may be the perceived level of complexity associated with designing and implementing an effective on-site solar program across an international portfolio of sites, especially when seemingly more convenient green energy certificates (e.g., EACs, REGOs, GOs) are readily available.
On-site generation is a valuable tool in decarbonization efforts due to its lasting operational benefits, additionality, and other unique advantages. While implementing a program across an enterprise may seem complex, the benefits — such as generating renewable energy directly at the source and reducing dependence on external suppliers — make it an essential component in the journey toward sustainability.
For large consumer goods companies, on-site solar power generation can offer notable financial and operational advantages. A physical on-site solar installation provides direct power to the site, which reduces grid energy dependence. Further, distributed solar at a company’s premises is a sterling example of deep additionality — projects that lead to new renewable energy capacity.
An on-site solar project at a specific location exists solely because the site owner chooses to make it happen. Even if it offers strong economic benefits, no external party can establish it on that site — only the site owner has this unique opportunity. The takeaway is clear: if your organization has a viable opportunity for on-site generation, this directly contributes to additionality. It allows you to develop a highly cost-effective renewable energy supply, reinforcing your sustainability goals without compromising financial returns.
The benefits of on-site solar accelerate when they’re implemented at an enterprise-wide level as opposed to site by site. Solar energy production varies based on geographic location, and with a portfolio approach, sites with high solar potential can effectively offset those with lower potential. This cross-coverage ensures that even sites where solar energy might not be as economically attractive can still benefit from the overall energy savings and greenhouse gas reductions. It balances the costs and benefits across all sites, maximizing the financial and environmental advantages of the program.
The logistics of installing on-site solar across a portfolio can be complex. Each installation site may be governed by different local regulations, impacting project timelines and feasibility. Moreover, coordinating with local contractors, handling site-specific assessments, and managing installation schedules across diverse regions can be resource intensive. This complexity often leads companies to hesitate, fearing a lack of expertise or consistency in project execution.
Companies are best served by focusing on their core business activities rather than dedicating time and resources to mastering on-site solar installations or every decarbonization measure — a practical approach many businesses adopt. By working with a provider that specializes in streamlined deployment across multiple jurisdictions, these challenges can be significantly mitigated. Providers can handle regulatory compliance, tailor solutions to regional standards, and manage logistics from start to finish, ensuring consistent quality and reducing the administrative burden on the company.
While the upfront investment in solar may seem daunting, contracting options like Power Purchase Agreements (PPAs) and Energy Performance Contracts (EPCs) are also often available to help companies transition with minimal CapEx impact. On-site solar contracted as PPAs (not to be confused with off-site/market PPAs) provide companies with stable, often lower-cost energy compared to grid purchases, offering protection against energy price volatility and rising carbon costs. These agreements are scalable and flexible, enabling companies to meet specific energy needs without large upfront investments.
For consumer goods companies, on-site solar enhances their sustainability reputation by visibly reducing carbon emissions and supporting genuine environmental commitments, reducing the risk of greenwashing accusations. Through these agreements, companies can finance the project over time without taking on the entire upfront cost, making on-site solar a financially viable solution for many. This approach not only makes renewable energy a cost-effective option for companies with significant energy needs but also provides a predictable, stable source of energy, unlike market-based certificates.
Buying Energy Attribute Certificates (EACs) unbundled or via green supply contracts can be an attractive, and valid in some cases, approach to taking advantage of renewable energy. These certificates — which have varying names in different markets, such as Green Electricity Certificates (GECs), Renewable Energy Guarantees of Origin (REGOs, in the UK), Renewable Energy Certificates (RECs, in the US), and Guarantees of Origin (GOs) — can be acquired by a simple market transaction that easily lowers the reported carbon footprint.
Unbundled EACs and green supply contracts are short-term supply options (1 to 3 years) that are exposed to price volatility and, when used as the sole tools to achieve corporate renewable ambitions, are increasingly viewed as a sign of greenwashing and lack of commitment from corporate stakeholders.
On-site solar installations offer several advantages over renewable energy certificates like REGOs and EACs, especially in terms of cost stability and supply. The price of REGOs has seen significant volatility, skyrocketing from around £0.20 per certificate in 2020-21 to more than £25 per certificate in November 2023, before declining again in 2024. This surge and ebb was largely due to reduced supply from the EU, which was caused by the UK leaving the European Association of Issuing Bodies (AIB) market due to Brexit. Fluctuations in REGO prices create uncertainty and the risk of potentially escalating costs for businesses relying solely on certificates. For a large company, this increase can add hundreds of thousands of pounds to annual energy expenses.
In contrast, on-site solar power provides more predictable costs and direct power, reducing dependency on the fluctuating market prices of certificates. It also contributes to additionality — the installation of new renewable capacity directly tied to the site’s energy consumption, which avoids the greenwashing concerns that can arise from certificate purchases alone.
On-site solar projects are a long-term strategic investment that should be part of a company’s overall decarbonization strategy. Solar will only cover a fraction of an organization’s energy needs — typically around 10% — but is still a proven, low-risk, cost-effective tool to help reduce greenhouse gas emissions.
This first fraction of energy needs will be shielded from both EAC and electricity price volatility. On-site solar offsets site consumption, generating savings against the entire corporate energy invoice (including transpiration, distribution, environmental levies, etc. which can account for more than 50%) unlike any other market tool, including supply contract and offsite PPAs, making it a remarkable risk-management tool for long-term cost controlling.
On-site solar will provide companies with greater energy independence, reducing reliance on external providers and grid risks. By adopting renewable energy proactively, companies can position themselves as sustainability leaders, strengthening their competitive edge in consumer-driven markets — all while mitigating long-term carbon costs and regulatory impacts.
