What are RECs & other Energy Attribute Certificates (EACs)?
Energy Attribute Certificates are contractual instruments with information about electricity consumption: eg. Guarantees of Origin (EU), Renewable Energy Certificates (USA).
Direct investment in renewable energy doesn’t only have a positive impact on our world as we know it. Several other goals can be met for businesses and company owners who choose to go ahead with a financial investment in the green power space. The types of direct investments in the renewable energy sector include onsite and offsite direct investments.
OVERVIEW
When directly investing in renewable energy assets, the producer of renewable energy can simultaneously become the buyer. In this case the energy output and energy attribute certificates are used for their purposes. Direct investments can create a long-term impact on a country’s economy, and are the buying or acquiring of businesses through equity or shares. A trend of direct investments in the renewable energy sector could tremendously transform how sustainability integrates into industries and the common person’s lives.
The majority of those interested in direct renewable energy investments place their focus on onsite energy solar (e.g. solar roofs) and wind power projects. A refreshing inflow of financial support can provide more employment opportunities, scientific advancements, and improved productivity. These types of investments could enable the investor to become partial or main owner of these power plants and sources. Direct investments however, have also been used to obtain Energy Attribute Certificates (EACs).
EACs are issued as proof that electricity being generated at that source is green, i.e., being produced via renewable and sustainable sources. As the world shifts focus to being better safeguards of the planet, these certificates may increasingly gain importance in policies, tax subsidies, and overall consumer behavior. Read more about Energy Attribute Certificates in THIS knowledge hub article.
Direct investments in renewable energy can improve energy security, stabilize access to electricity, strengthen economic development, and mitigate climate action. However, apart from the obvious positive impact of growth in direct renewable energy investments, there are several other goals that businesses and company owners can achieve.
Of course, different types of investments occur for various kinds of green electricity sources. Direct investments are names of two kinds; onsite and offsite.
Onsite direct investments are one of the most accessible and convenient ways to prove your green energy consumption. Additionally, you can have it monitored by trusted sources nearby to build a renewable energy power plant directly on the organization’s land. Better yet is to have a direct connection linking your production facility to the company’s operations to resource consumption. This arrangement is commonly called an Onsite Direct Investment.
In most cases, the company is the owner of the power plant. Sometimes, in a bid to avoid increased upfront costs, companies opt for onsite solar Power Purchase Agreements. They then lend their land to a third-party entity to operate and scale renewable energy. On site solar rooftops and onsite electrical services are the most common. An advantage of onsite direct investment is also the smaller upfront costs compared to a regular rental or purchase of power generated offsite.
Offsite direct investments are those where the organization decides to locate its green power assets at a distance. Very often, company’s do not have the ideal amount of space on their site of operation to build and maintain a fully functioning and reliable renewable energy power plant. Many companies opt for Power Purchase Agreements (PPA) that involve the buying of energy produced on another piece of land not owned by the company.
In the simplest of terms, this is the outsourcing of resources. In these situations, the third party involved are termed the Balancing Responsible Party. These are typically those who are meant to oversee the proper and safe transport and storage of the green power being generated. This arrangement is commonly referred to as an Offsite Direct Investment.
A PPA is a common arrangement in which a third-party entity typically installs and operates a renewable power source on site on another property. The client or investor then only purchases the final output of green power. Read more about corporate PPAs in THIS knowledge hub article. Overall, direct investments can provide a much-needed boost not only to sustainability endeavors around the globe but also to local business growth and customer behavior.
Interested in direct investments in renewable and green sources of power? We will help you structure a contract and the origination of a renewable energy seller.