Solar Energy, the Next Frontier of Food & Beverage Sustainability
By Pivot Energy April 2 2021
The Food and Beverage industry leads on sustainability. From regenerative agriculture practices to the industry’s increased transparency at the grocery aisle, Food and Beverage companies understand that sustainability isn’t just good for brand perception; it is a competitive advantage. However, one critical component doesn’t align with Food and Beverage companies’ sustainability plans: the fossil fuels powering their facilities. With consumer demand for green products and corporate leadership, Food and Beverage companies need to think beyond the shelves to stand out.
The Business Case for Sustainability
Numerous consumer studies cite the rising preference among purchasers for responsibly-sourced products and their positive impact on corporate profits. A recent report from the Capgemini Research Institute notes that “79% of consumers are changing their spending habits based on social responsibility, inclusiveness, or environmental impact.” A IBM and the National Retail Federation found survey found nearly 6 in 10 consumers surveyed were willing to change their shopping habits to reduce environmental impact. Additionally, companies with sustainability offerings see accelerated growth, as noted by the Harvard Business Review.
As proven by these studies and many others, it is evident that more and more consumers care about where and what they are spending their money on, including paying a premium for brands who deliver on environmental stewardship. With this in mind, it is important to take a holistic approach when incorporating sustainability in your brand, including the very source of energy that powers your company’s facilities.
The Movement Towards “Green” Business Operations
Food industry giants such as Danone, General Mills, and Nestle are taking critical steps to reduce greenhouse gas (GHG) emissions from food production, which by some estimates, accounts for roughly a third of global GHG emissions. The COVID-19 pandemic hasn’t slowed the green pledges, with new commitments announced by AMD, ConAgra, Cargill, and more within the last year.
Emission reduction efforts not only make for a differentiator in the grocery aisle, i.e., “this product was made in a facility powered 100% by clean energy,” but companies can also achieve strong returns on investment for energy efficiency and renewable energy upgrades. This reality has been touted by many in the industry, from Environmental Social Governance (ESG) reports and investor updates. Just as brands are investing in resiliency in the supply chain, energy upgrades build resiliency into business operations.
Solar Energy is a powerful solution for Food and Beverage companies seeking to market their sustainability initiatives to consumers while reducing operating costs for their facilities or offices.
Investing in solar energy allows companies to take greater control of their bottom line and turn an electric expense into an asset. Every kilowatt-hour of energy produced by a solar array equates to one less unit of energy purchased from the utility, which is heavily reliant on carbon-intensive fuel sources. In addition, solar energy procurement is eligible for federal tax credits and incentives (location dependent) which accelerates project breakeven and increases returns. System owners benefit from the 26% Federal Investment Tax Credit (ITC), which equates to a 1:1 reduction in corporate tax liability. Add to this Bonus Accelerated Bonus Depreciation, these two tax vehicles alone equate to almost half of project costs recouped via tax vehicles. Additionally, many states and utilities offer incentive income atop of these benefits. These benefits make solar more accessible and are worth exploring now before some phase down.
There has never been a better time to explore solar energy for your facility. In addition to operating cost savings and incentives, the drastic drop in system costs has largely plateaued. Meaning any additional brands stay on the sidelines waiting to invest, risk losing out on valuable financial benefits while continuing to pay increasingly expensive electric bills. Additionally, if a capital outlay is not feasible, third-party ownership structures like a Power Purchase Agreement (in which a financier receives all the incentive benefits and provides a Day 1 utility rate lower than the current utility rate) make solar more accessible. There are even options for offsite solar subscriptions if a facility is not suitable for onsite solar.
Solar Energy offers a compelling investment and it is certainly the sort of company evolution worth sharing with your customers and employees. From packaging promotion to internal messaging, today’s solar energy procurers are proud to share they have made the switch to clean energy.
Getting Started With Pivot Energy
Pivot Energy is a turnkey solar developer with over 500 commercial and industrial projects nationwide. Connecting with a qualified developer like Pivot Energy ensures you have the expertise needed to properly understand your unique energy needs and effectively navigate your portfolio. Pivot is an experienced partner of the Food & Beverage industry, helping clients unlock the many benefits of solar energy. Reach out to our team today to get started with a free consultation to see how much you can save with solar!