While major renewable power purchase contracts typically have been the province of corporate behemoths such as Google and Microsoft, smaller companies are beginning to get in the game in a more visible way. Not only are these organizations meeting carbon-reduction commitments through these commitments, they may be saving money in the process. 

In early May, cloud services company Akamai Technologies announced a 20-year investment in an 80-megawatt wind energy farm slated to come online in 2018. Once operational, energy from the farm will offset Akamai’s aggregate Texas data center operations, which account for about 7 percent of its global power load, according to a company press release. 

Renewable energy demand among large U.S. companies is significant and growing quickly, according to a December analysis by the Advanced Energy Economy (AEE), a clean energy trade group. The report found that 71 of Fortune 100 companies have set renewable energy or sustainability targets, up from 60 just two years ago. Twenty-two Fortune 500 companies have committed to sourcing 100 percent of their electricity needs from renewables, including Walmart, Apple, General Motors and Amazon. Alphabet’s Google expects to be powered entirely by clean energy this year.

Traditionally speaking, midsize companies such as Akamai have found the process of negotiating contracts for renewable energy daunting. For one thing, they often do not need all the energy generated by large-scale renewable energy projects. Or their power needs might be spread across more than one region, further diluting their purchasing influence.

The structure of Akamai’s deal, a virtual power purchase agreement, offers one way to resolve that challenge, said Nicola Peill-Moelter, Akamai’s senior director of environmental sustainability, in an emailed response to a request for comment.

Under its contract with the project developer, Infinity Renewables, Akamai has committed to purchasing a certain percentage of the output of the wind farm, an "off-take," at a pre-determined price. This electricity is then sold on the open market, although Akamai retains the renewable energy credits (RECs), because Akamai hosts its servers in third-party data centers and already pays the data center vendor for the electricity used. With this arrangement, Akamai assumes the market risk for the electricity, which reduces the risk for Infinity, according to Peill-Moelter. 

Research suggests Iowa, Illinois, New Jersey, California and Texas make it easiest for corporations to procure domestic renewable energy.

Akamai is in the process of securing virtual PPAs for several new projects, she said. The company is collaborating with three other companies to divide up the off-take that could involve several renewable energy projects. Alone, Akamai could hope to cover only a fraction of these projects’ generation. In an aggregated deal, each buyer gets the advantage of economies of scale. The structure also provides the developers guaranteed buyers for their projects, which helps to secure financing.

Or, get help

Another barrier holding back smaller companies can be their lack of in-house expertise with long-term, bulk power purchasing arrangements. One solution is to work with a third-party aggregator.

LevelTen Energy, for instance, has created a dynamic, two-sided market that aggregates PPA buyers and sellers, allowing them to connect and transact more efficiently than they’d likely be able to achieve on their own. LevelTen functions similarly to a mutual fund, charging its customers a fee equivalent to a small percentage of the contracted energy cost. Another organization that has orchestrated at least two aggregated deals is CustomerFirst Renewables, which was involved in projects in Boston and Washington, D.C.

Alternatively, the Rocky Mountain Institute’s Business Renewables Center (BRC), of which Akamai is a member, offers a membership platform that streamlines and accelerates corporate purchasing of off-site, large-scale wind and solar energy. The BRC aims to make it easier for smaller corporations to enter the renewable energy market by sharing its first movers’ hard-learned lessons. Akamai stated it hopes to lower the learning curve for others by sharing its own experiences through the BRC.

Location, location, location

Another factor that facilitated the Akamai deal was its location — in Texas, a state with a regulatory structure that favors corporate renewable energy procurement.

The same cannot be said for all states.

Indeed, a January report by the Retail Industry Leaders Association and the Information Technology Industry Council found Iowa, Illinois, New Jersey, California and Texas make it easiest for corporations to procure domestic renewable energy.

Conversely, the report identified Florida, Kentucky, Alaska, Idaho, Wyoming and Alabama as the states with the least friendly policies related to clean energy procurement. As such, energy buyers looking to procure renewables might do well to start by evaluating their domicile state’s framework.