A deal announced this week between Ampion Renewable Energy and Wendy’s restaurant chain shows another benefit to community solar beyond those commonly touted – it can serve as a way for corporations to garner renewable energy certificates (RECs).
Businesses and households typically buy subscriptions or shares in a community solar project to reduce their electricity costs and capture the opportunity to participate in solar without installing rooftop panels.
In Wendy’s case, its participation also counts towards meeting its environmental, social, and governance (ESG) goals – something not all community solar participants can do, at least not easily. Wendy’s is able to do so through a product offered by Ampion that bundles RECs with community solar.
More than 130 Wendy’s stores, including 40 franchises, have enrolled in a program called Ampion+, securing RECs from 27.5 million kWh of community solar in New York, Illinois, and Massachusetts.
RECs are market-based instruments that allow for the buying and selling of property rights that represent the environmental benefits of a power project. One REC represents the environmental benefits associated with one megawatt-hour of renewable energy matched with electricity usage. Buying RECS and verifying them can be a complicated process for companies that do so on their own.
Community solar growing
Community solar has been experiencing rapid growth in several states and is, in fact, credited for causing distributed solar deployment to beat out utility-scale solar in New York. The state added more than 800 MW of distributed solar last year, and is on track to surpass 6 GW by the end of 2024, one year ahead of when it was expected to reach that goal, according to a report by the New York Solar Energy Industries Association. Much of the state’s rapid growth in solar — averaging 31% annual growth from 2013-2022 — was driven by community solar.
Nationally, the story is similar with Wood Mackenzie forecasting a doubling of installations in the five years, driven by key states with favorable policies.
Two barriers holding back “gangbusters” growth
But two barriers still get in the way of community solar “going absolutely gangbusters,” said Nate Owen, CEO and founder of Ampion, which manages more than 1 GW of community solar.
The first barrier is the inability to build enough community solar to meet demand, largely because of delays in getting solar interconnection applications approved by utilities.
“We all know that there are interconnection queues packed with solar farms right now across the country, “ Owen said in an interview this week. (A transcript of the full interview is available in the Energy Changemakers community as a podcast preview.) “Interconnection has been getting in the way for a very long time. And it’s a travesty.”
The second obstruction involves a problem that Ampion has been able to solve, which is the disassociation between community solar projects and the RECs they generate. In certain states, utilities pay developers for the certificates and retire them. So corporations with sustainability goals are unable to claim the RECs toward meeting their ESG goals when they participate in community solar.
Ampion last year created Ampion+ to overcome the problem. The product is in essence an accounting mechanism that allows Ampion to bundle Green-E RECs into community solar subscriptions for use by companies, Owen said.
Companies buy the RECs using some of the money they save on their electricity bills by participating in community solar. Even with the RECs incorporated in the deal, the companies are still able to achieve some cost savings.
The product also spares companies the hassle of trying to navigate the complex REC market on their own.
The Wendy’s restaurants are using the Ampion program to help it achieve goals set last year to reduce absolute Scope 1 and 2 emissions by 47%, and Scope 3 emissions from franchisees by 47% per restaurant by 2030, both from a 2019 baseline. The stores will source 30%-100% of their energy through the program.
As more solar makes its way through delayed interconnection queues, Wendy’s plans to increase the number of restaurants enrolled in community solar through Ampion.
“We are advancing progress toward our emissions reduction goals through community solar participation and RECs. It’s a win-win for the company and our franchisees,” said Steven Derwoed, vice president, Global Design & Construction at Wendy’s, which has 7,000 stores worldwide.
Wendy’s follows IHG Hotels & Resorts which announced a similar deal with Ampion in May.
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