The manufacturing sector forms the backbone of economies around the globe. Producing everything from cars to computers, food to fabrics, it accounts for over 20% of energy demand worldwide, and historically, fossil fuels have supplied nearly all of that energy. But today, renewable power generation technologies are offering manufacturers cleaner and cheaper alternatives. From solar panels on factory rooftops to cleaner grid supplies, the experts at Commonwealth say that renewables promise to transform production processes and supply chains for the better.
Distributed Energy Savings
Many factories still draw energy from centralized fossil fuel plants that burn coal, natural gas or oil. Nevertheless, there is a growing number of factories installing solar panel systems on-site to source renewable electricity right where it’s needed. Installing solar panels on factory rooftops, parking lots, and vacant land provides sustainable power and helps to shield against increasing electricity prices. Manufacturers can also reduce emissions and energy costs without having to interrupt production.
Since solar power is modular and scalable, factories can begin with a small system and escalate capacity as needed. Hundreds of megawatts of manufacturing capacity around the world now incorporate solar. Project economics continue to become even more compelling thanks to technological improvements and public incentives like tax credits, and energy storage additions help smooth solar generation for 24/7 manufacturing loads.
Clean Energy Procurement
Even manufacturers without on-site generation capacity can increasingly access renewable power generation feeds. Utility green energy subscription programs essentially let factories substitute fossil fuel-based grid supplies with allocations from solar, wind and other renewable plants. These options give manufacturers carbon-free supplies without added infrastructure costs.
In deregulated electricity markets, manufacturers can also contract directly with independent power producers to lock in low, fixed rates over 10+ year terms. Bulk clean energy procurement through power purchase agreements (PPAs) has become a cost-effective way for factories to hedge against fuel volatility. It also enables them to plan finances years into the future.
Boosting Bottom Lines
Transitioning to renewable power generation allows manufacturers to realize measurable profitability gains in addition to sustainability benefits. Solar, wind and other clean energy supplies provide long-term price stability compared to fossil fuel volatility. They insulate factories from market swings, risks of fuel shortages and costs of emissions compliances. Investing in renewables may require some upfront capital, but the projects typically pay for themselves in under 10 years – and the fuel, sunlight, wind, etc., is free. Manufacturers can channel savings from energy bills into expanding operations, hiring more staff and upgrading to more efficient equipment. Clean energy assists businesses across sectors, and manufacturing is no exception; renewables boost resilience and the bottom line.
Sustainable Supply Chain Benefits
Accessing renewables, whether through distributed assets or utility subscriptions, provides obvious advantages on-site, but clean power generation also uniquely benefits manufacturing supply chain sustainability. Demonstrating renewable energy usage allows factories to better comply with emissions regulations and satisfy conscientious investors.Â
Pursuing clean energy helps factories recruit and retain increasingly eco-conscious talent as well. Younger generations tend to deeply value corporate sustainability when job seeking. Renewable power generation delivers a tangible example of environmental stewardship that also powers community growth through local jobs.Â
Conclusion
Manufacturers today stand at a crossroads for how to power production. Clinging to legacy fossil fuel generators threatens to mire them in volatile energy markets and growing climate policy hurdles. But embracing solutions like solar, wind and more puts them at the vanguard of sustainability while unlocking major efficiency gains. Renewable energy unlocks distributed savings for factories while allowing them to meaningfully reduce supply chain impacts. Clean power generation delivers resilience along with responsibility for the manufacturing sector.
