Moves of Global Corporates Toward Sustainable Future:
Commercial Solar PV Market
May, 2021

 Moving into a New Era 

Today, the world is entering a new era that fully considers sustainability and the environment, ending an era of excessive and unnecessary consumption. Companies focused on social responsibility are leading industries much more now, while those with merely manufacturing and profit-driven goals are beginning to lag behind. 

In this era, solar photovoltaics (PV) is rapidly becoming a default energy production source among other renewable energy alternatives. It is expected that solar PV will take up an increasingly greater share of the power generation mix to overwhelm all other energy sources by 2050. According to the International Renewable Energy Agency (IRENA), electricity generated from photovoltaics will reach 8,519 GW, accounting for over 40 percent of total global energy production by 2050. Solar PV is categorized as residential and commercial by usage, and the commercial PV market is rapidly growing. 

<Electricity Generation by Energy Source by 2050, Source: IRENA (2019)>

Commercial PV is classified into on-site and off-site systems. On-site systems generate electricity from solar modules on owned properties or buildings. On the other hand, off-site systems supply electricity generated from other facilities. In other words, it is a way of supplying or purchasing electricity from other areas based on agreements. 

On-site systems require companies to invest significant initial capital and pay continuous maintenance costs, but they can benefit from various incentives provided by governments. Off-site systems allow companies to achieve eco-friendly goals without large-scale investment. In the US, the SEIA (Solar Energy Industries Association) forecasted that an additional 5 GW of corporate off-site PV systems would be installed globally over the next three years. 

<Commercial Solar PV Industry Outlook, Source: SEIA Solar Means Business 2020>

 Green Moves of Global Corporates 

More companies are actively utilizing an off-site PV system these days because they see it as vital for achieving their green energy target while devoting resources to their businesses.

* RE100 campaign is a target that all corporates around the globe are urged to join. RE100 participants keep a close eye on various renewable energy sources - solar, bio, wind, hydraulic, fuel cell, waste, and geothermal - and are working on finding the most efficient and sustainable way from a business perspective.

It is noteworthy that companies participating in the RE100 campaign are constantly raising the portion of off-site system electricity to attain their targets. As of 2018, usage of off-site systems by RE100 members was close to 20 percent. Also, off-site systems were the second most used approach by North American members of the campaign to achieve RE100.

*RE100 Campaign: An abbreviation for Renewable Energy 100, referring to replacing electricity consumed by corporates with 100% renewable energy. 

<Energy Sourcing Approaches of RE100 Members, Source: RE100 Annual Report 2019>

<Energy Procurement by North American RE100 Members, Source: RE100 Annual Report 2020>

The global IT corporates, so-called ‘GAFA’ - Google, Apple, Facebook, and Amazon - are also members of the RE100 campaign and have led renewable energy investment focusing on off-site systems along with on-site systems as a supplementary method.

Google reached 100% electricity procurement from renewable sources in 2017 through active utilization of direct procurement with the off-site approach and a *green tariff. Apple announced that it would realize complete carbon neutrality in all areas ranging from manufacturing to SCM (Supply Chain Management), by 2030. Apple self-generates electricity with PV systems on its business sites and is working together with more than 100 partner companies around the world to switch to renewable energy. Besides, it is constructing ** California Flats, one of the world’s largest battery projects. 

* Green Tariff: A price structure offered by utilities allowing consumers to design renewable energy electricity plans.

** California Flats: It is the US’s largest-scale battery project that can store up to 240 MWh of energy and supply electricity to more than 7,000 households per day.  

<Apple’s California Flats project, Source: Apple newsroom>

Facebook and Amazon purchase renewable energy through PPAs (Power Purchase Agreements). According to BNEF (Bloomberg New Energy Finance), the amount of renewable energy sold under PPA to companies around the world was 23.7 GW last year, more than twice the 11 GW of total PV capacity installed in the U.S in 2019. Amazon and Facebook purchased 7.5 GW and 5.9 GW of renewable energy, respectively. Amazon concluded 35 PPAs in 2020 to achieve power consumption with 100% renewable energy by 2030. Many other companies are making efforts to achieve renewable energy goals through the PPA model. In addition, Amazon is constructing an on-site system, installing rooftop solar panels on its largest distribution center in Europe. 

Samsung Electronics is one of the Korean companies that is actively installing PV systems on its domestic and overseas business sites. About 2,847 MWh of electricity is produced in total annually from establishments of Samsung Electronics DS division, an amount of power equivalent to supplying electricity to 678 households for one year when assuming that a household of four members consumes 350 KWh per month on average. In 2019, Samsung Electronics has switched to 100% renewable energy for the overseas establishments of its DS division in the U.S. and China.

 Sustainable Energy Lights Up the World! 

Hanwha Group, leading the renewable energy sector, is more aggressively adopting to the changes in the market and social environment than any other companies. At Life Park, Hanwha’s training center in Yongin, Gyeonggi Province, solar panels were installed on the center building and signboard to supply power, and the Hanwha Building in Janggyo-dong, Seoul, went through a remodeling using BIPV (Building Integrated Photovoltaic) for its outer wall materials. Recently, Hanwha E&C entered the wind power green energy business in line with the strategy of the group.

In particular, Q CELLS has maintained the top market share in the US commercial PV market, the world’s largest market. In 2020, Q CELLS ranked NO. 1 in both the residential and commercial solar sectors in America. Wood Mackenzie, an energy consulting firm, reported that, in the commercial solar module market, Q CELLS claimed the No. 1 position for two consecutive years with a 19.1% market share, up 5%p year-on-year. Based on its performance, it is considered that Q CELLS has met the rigorous standard of US consumers by conducting tests that are two to three times more stringent than the international standard. 


<US Solar PV Market Share in Last Three Years(Source: Wood Mackenzie)>

An environment to fulfill social responsibility has been formed among domestic and foreign corporates as eco-friendly policies are being reinforced around the world. The CEO of Blackrock, an American multinational investment management firm, emphasized the necessity of eco-friendly management saying, “The climate crisis is an investment crisis.” In this era, companies are paying more attention to the role of solar PV in renewable energy to achieve carbon neutrality. It is expected that the commercial solar PV market will steadily grow, as solar power gains more importance in all green new deal plans, especially with green cities, ZEBs (zero-energy building), and expanded procurement of renewable energy.

#Energy Story
#Commercial Solar PV
#Commercial Solar PV Market
#Green Corporates
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