Menu Item

Navigating Renewable Energy Strategies in Location Selection

This article is part of a series in collaboration with TRACTUS ASIA and LOCATION DECISIONS. For more information on the global renewable energy landscape, check out their insights below on Asia and Europe.

According to Forbes, more than 40% of Fortune Global 500 companies have either announced their intention to reach net-zero emissions by 2030 or have already achieved it. As businesses navigate the complex array of alternative approaches, they need their location strategy to be aligned with their renewable energy (and/or net zero) strategy.  

Virtually all companies, regardless of location, are being pushed to join the renewable energy movement to one extent or another, whether through consumer expectations, employee/stakeholder pressure, direct regulation (particularly in the European Union), indirect regulation by virtue of a threshold presence in a regulated market, or value chain mandates from customers who themselves are pursuing net-zero.  

Airbus Group, PepsiCo Inc., American Airlines Group Inc., Caterpillar Inc., Canadian Natural Resources Ltd., Siemens AG and others are leading the way. They are adopting various strategic solutions, including carbon offsetting initiatives, reducing emissions, minimizing transportation carbon footprint, collaborating with supply chain partners, and using renewable power sources.

In our work advising companies on location strategy and site selection, we have witnessed a dramatic increase in clients prioritizing location-based variables that affect a company’s ability to achieve net-zero targets, particularly regarding renewable energy options. Each company has its own unique targets, definitions, and priorities; thus, the site selection process must be designed to identify locations well-positioned to help the company meet its objectives.  

What renewable energy options are available, and how can they integrate into the site selection process? The answer largely depends on your current location or the prospective expansion area.

A Dynamic U.S. Environment for Renewables

In December 2021, the Biden Administration set a target for federal operations to achieve net-zero emissions by 2050, a goal many American corporations are also embracing, with some even aiming to surpass it. In the U.S., companies are pursuing their renewable energy goals through a variety of on-site generation, off-site generation, power purchase agreements, and renewable energy credits.  

The pace of activity has, however, led to challenges with capacity on the electric grid, with utilities struggling to absorb the new generation sources. This has been compounded by the rapid expansion of manufacturing industries in the U.S., leading to multi-year wait times when new interconnections are required.

The push for renewable energy has transformed the role of U.S. power providers from vendor to key strategic partner. US utility providers range in size from small publicly held municipal providers to large investor-owned, multi-state providers, and regulatory structures are not uniform across the states, which means each utility partner is unique in its renewable offerings and capabilities. Finding the right site means finding the right utility partner.

Purchasing Strategies

For those with the ability to choose their energy provider [see sidebar], the constantly-developing renewables market offers a variety of clean energy options. Customers can work with their Third Party Supplier (TPS) to purchase 100% renewable energy of virtually any kind or mix. Today, the most widely available and least costly alternative is 100% national wind energy, which costs 4–7% more than conventional sources.  

For those in regulated states, however, the options are more limited. That said, some regulated utilities offer “green power” tariffs, allowing the purchase of renewable energy (usually at a premium) from a specific renewable energy generation project.  

Another possibility in many areas - instead of a Power Purchase Agreement or a green power tariff – is the purchase of renewable energy credits, sometimes called renewable energy certificates, or RECs. These allow energy providers to document how much of their power comes from a renewable source and to market this documentation, i.e., the RECS, along with the power. Companies buying the RECs can then certify their claim that the corresponding amount of power originated from a renewable source. Renewable energy credits can be purchased for solar and wind-generated power.

Dedicated Generation

While most companies are focused on purchasing renewable energy, large industrial companies may seek ways to generate their own renewable power. Both on-site and off-site options are possible.  

Manufacturing facilities exploring on-site renewable energy options have several choices, each with unique benefits and limitations.  

  • Solar panels, often installed on rooftops or over parking areas, are popular but typically meet only a small portion of the high energy demands in manufacturing settings.  
  • Co-generation systems, which simultaneously produce heat and power from a single source, are well-suited for processes that require significant heat, such as food processing, paper manufacturing, and pharmaceuticals/bio manufacturing.  
  • Geothermal energy, another option, uses water drawn from wells for heating or cooling but is highly dependent on the site’s geographical attributes, limiting its applicability.  
  • Fuel cells present a modern solution by generating electricity from hydrogen, but currently, most hydrogen is produced from methane, a fossil fuel, which can negate some environmental benefits. An emerging alternative, green hydrogen, is produced by splitting water into hydrogen and oxygen using electricity, preferably from renewable sources.  

Various options exist for off-site power generation, too. Some mega data center projects and large international manufacturing companies are constructing substantial solar facilities near the project site. This strategy bypasses the necessity for connecting to high-voltage transmission system grids. However, it’s important to note that off-site generation, regardless of the distance from the main site, demands considerably more land to make room for the power plant. Additionally, if the solar installation isn’t directly adjacent to the project site, it may require securing easements or rights-of-way for access or energy transmission.

Finally, even companies planning to generate their own power may still find utility companies eager to partner on these types of solutions to attract them to their service territory.

Interconnection Challenges for New Energy Sources

As mentioned previously, perhaps the biggest challenge presented by renewable energy is the inability to absorb the new generation sources quickly enough. Over 60% of the U.S. has a regional or independent system operator (RTO/ISO) that controls the transmission grid in that region. Vertically integrated utilities operate their own transmission grids. Regardless of form, they all require a system impact study to be completed for new connections, with each new request going into what is called “the queue” to be analyzed.  

This leads to massive waste. According to the U.S. Office of Energy Efficiency & Renewable Energy, at the end of 2022, there was more than 2,000 GW of excess generation and storage capacity, 95% of which was for clean energy. Due to the large number of projects, the average wait time for fulfilling an interconnection request is now 3.7 years.

This means companies eager to build new plants may find their plans thwarted by these wait times, making it important to understand the approval process for each potential site.


Federal and regional incentive programs can help assist companies with the cost of integrating renewable options. The Inflation Reduction Act (IRA) created federal funding opportunities for clean energy initiatives, including new and expanded tax credits and grant programs, fuel tax credits, carbon management credits, energy innovation, and more.

According to the Database of State Incentives for Renewables & Energy (DSIRE), states and utilities offer nearly 2,500 incentive programs for renewable energy and energy efficiency. These programs fall into multiple categories: rebate programs, tax credits, deductions, exemptions and assessments, net metering, renewable portfolio standards, and loan programs. Each program’s qualifications, benefits, and obligations vary and require analysis to determine how they could benefit a company’s goals.

Key Takeaways for Site Selection Projects

Confirm Timelines:  No matter the location, as energy demand continues to rise, meeting the needs of regions and companies will depend on continued advancements in grid infrastructure. Backlogs of key infrastructure components have been common in recent years, but so have delays in the required engineering studies and approvals, significantly delaying project timelines.

Articulate Expectations and Priorities Around Renewables: Articulating a company’s renewable energy and net-zero expectations early in the site selection process allows for the broadest range of strategies possible while ensuring efficient dismissal of locations that don’t align well. Establishing an evaluation/selection process that captures the trade-offs between price (net of incentives), reliability, and suitability is equally important.  

Keep an Open Mind:  There is a wide (and ever-expanding) range of potential renewable energy solutions; however, the feasibility of a given solution varies tremendously by site and operation. Consequently, finding the right fit between renewable energy goals and site selection becomes an iterative process, starting with the end goal in mind but recognizing that there may be multiple ways to reach that goal.  

U.S. Client Case Studies

Renewable Energy Strategies in Europe

While the pursuit of net-zero and renewable energy targets in the U.S. is generally market-driven, Europe’s regulatory environment creates material financial consequences for carbon emissions, prompting companies to lower energy usage and/or seek out renewable energy, even if more expensive than fossil fuels. Our European-based colleagues at Location Decisions continue the conversation.

Renewable Energy Strategies in Asia

Asia’s renewable energy landscape is, in a word, diverse, with a wide range of national-level sustainability goals apparent across the various countries and varied availability of renewable energy options. However, the trend toward net-zero is well-established in this region of the world. Our Asian-based colleagues at Tractus continue the conversation.

Timothy R. Comerford

Senior Vice President

Tim Comerford leads a specially-designed interdisciplinary practice focused on assisting companies, developers, municipalities, and real estate advisors with issues that pertain to energy procurement, renewable installation, infrastructure assessments, and utility relocation, with a special focus on mission-critical facilities.

Tracey Hyatt Bosman, CEcD

Managing Director

Tracey Hyatt Bosman develops and executes incentives and location selection strategies for BLS & Co.'s corporate and institutional clients. She is a certified economic developer with twenty years of professional experience across a wide range of sectors, including data centers, manufacturing, headquarters, back office and contact center operations, and logistics.

right pointing arrow
right pointing arrow

the latest from bls & Co.

right pointing arrow

Interested in Learning More?

Contact us today at 609.924.9775 or info@blsstrategies.comto schedule an initial consultation.
Menu Item