Author: 3Degrees Staff

At 3Degrees, we make it possible for businesses and their customers to take urgent action on climate change— providing renewable energy and carbon offset solutions to Fortune 500 companies, utilities, universities, green building firms and other organizations that are working to make their operations more sustainable. And as a certified B Corporation and eight-time winner of the EPA Green Power Supplier of the Year award, we’re primed to deliver custom clean power solutions that will help each organization make an environmental impact. Founded in 2007, 3Degrees is headquartered in San Francisco, California, with offices across the United States.

3Degrees in the news


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Etsy offsets the entire carbon footprint of its shipping—and it wants other retailers to do the same





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Apple, eBay, Samsung, and Sprint Sign Agreement to Use Power Generated from New Texas Wind Farm


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Apple, eBay, Samsung, Sprint join on Texas wind project


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As climate change looms, a booming market for carbon offsets


Fortune Change the World

Fortune – Change the World

An online retailer makes a carbon-offset promise, and others follow suit.


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Etsy CEO says its second-quarter results will prove to be a ‘breakthrough quarter’


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Q&A: How Akamai, VPPAs Are Paving the Way for a Corporate Clean Energy Future


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The 100 Most Creative People in Business 2019: Erin Craig


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7 Influential People on Environmental Advocacy in the Beauty Industry


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The newest Silicon Valley perk: your own personal carbon offset





Here’s how Etsy is tackling e-commerce emissions, a largely unaddressed problem


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How Etsy is offsetting carbon from its shipping





Etsy crafts a plan for carbon-neutral online shopping


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Etsy just became the first global e-commerce company to offset all of its shipping emissions




How Etsy Leapfrogged Amazon in the Race to Go Carbon Neutral


environmental-leader-logoEnvironmental Leader


Etsy Offsets 100% of Carbon Emissions From Product Shipping


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Los Angeles Times


Can climate-friendly cuisine help save the planet? Welcome to Zero Foodprint week


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This Company Wants to Use Cow Manure to Offset Aircraft Emissions





Stop worrying about buying carbon offsets for your flights


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Curbed Atlanta



Partnership aims to put more electric vehicles in Atlanta’s rideshare market





Meet Lyft’s first head of social impact and its first sustainability director





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Fast Company


Lyft: “We are now a fully carbon-neutral company”


GreenBiz GreenBiz


Apple, Akamai, Etsy and Swiss Re get together to buy clean power


energy-manager-today      Energy Manager Today

Apple, Akamai, Etsy and Swiss Re Announce Renewable Energy Agreement, Plan to Build Wind and Solar Farms in the US


renewables-now      Renewables Now

Apple-led group plans 290 MW of renewables in Illinois, Virginia


9to5-mac-logo      9 to 5 Mac

Apple partners with Akamai, Etsy, and Swiss Re to push renewable energy efforts in Illinois and Virginia


Smart Energy Decisions     Smart Energy Decisions

Apple, Akamai, Etsy, Swiss Re collaborate on RE aggregation


bloomberg-news     Bloomberg News Online

Lyft Says Every Ride Will Be Carbon Neutral With Clean-Air Plan


the-atlantic      The Atlantic Online

Why Lyft Is Going Carbon-Neutral, and Uber Isn’t


cnn-online     CNN Online

Lyft makes its trips carbon neutral in bid to fight climate change


use-today      USA Today Online

Every Lyft ride to be offset by a carbon credit to reduce global warming


     U.S. News & World Report

Lyft to Offset Emissions From Rides With Projects Combating Climate Change



Lyft offsets carbon emissions, but still relies on gas-guzzling cars


the-verge      The Verge

Lyft will invest “millions” in effort to become completely carbon neutral


      SF Gate

Lyft cleans up; Hulu worth $8.7 billion; bogus Starbucks coupons


tech-crunch      TechCrunch

Lyft invests millions of dollars to offset its effect on climate change



Service Spotlight: Door-to-Door Outreach

Neighborhood lit by orange sunlight

Recently the power of person to person outreach was featured by energy communications professional John Egan in his piece 
Utilities, Do More Face-to-Face Public Engagement! In the post, Egan makes the case that despite the proliferation of digital communications tools there are still plenty of times when you need to “look someone in the eye to see if you can trust what they’re saying.”

We couldn’t agree more — and, in fact, we’ve built a service around this belief.

Egan spoke with our National Outreach Director, Garrett Downen, who rated door-to-door outreach as one of the most effective uses of a utility’s marketing dollar. “It’s scalable, and the results are predictable,” said Downen.

Considering adding door-to-door outreach to your marketing program?

View of the exterior of a home with trees in the foregroundOur experience has been that community outreach offers incredible growth potential for many utility programs as well as an opportunity for the utility to become an even more visible part of the communities it serves.

For any utility considering person to person outreach we recommend you use a foundation of well-trained staff who know how to represent your organization and brand. At 3Degrees, we call that need “S3”: Safety, Service, Sales. Whether or not a customer chooses to participate in a program, each interaction with a representative must be positive and professional. We suggest you follow our mantra: 

  • Safety is paramount
  • Customer service is critical
  • Program uptake is a key objective

Of course you don’t have to go it alone either. 3Degrees offers outreach services for our clients, tailored to your unique customer base and service goals. Interested in learning more? Contact us.

Industry Analysis: Renewable Power to the People White Paper

As more states develop policy mechanisms for developer-led community solar, projects are proliferating. While some are highly successful, others struggle to sell out their capacity.

To help build this market, we conducted research to determine what consumers want in a community solar product. The research was designed to answer the question:

What community solar product design will attract the most customers and still be financially attractive to developers and financiers?

We used a conjoint analysis to have consumer trade off amongst various product attributes. This approach allows us to understand which attributes are most important and the impact they have on customer demand for the offering.

The report also offers insights into awareness of community solar and marketing messages that will resonate with consumers.


A Western Regional Electricity Market Would Be a Boon for Corporate Renewables Buyers

Wind turbine stands over green fields

An integrated market would drop the cost of wind and solar integration, and make buying wholesale renewables a lot easier

What would an expansion of the California wholesale market to a broader Western regional market mean for businesses looking to buy renewable energy?

We recently tried to answer that question at a seminar. After a stimulating discussion with representatives from Fix the Grid, Energy GPS, MISO, and Bay Area-based corporate buyers, our takeaway is that a regional Western grid would increase the opportunity to contract for cost-effective renewable energy .

It’s well known that the installed cost of wind and solar has declined dramatically over the past several years; Lazard’s Levelized Cost of Energy Analysis 9.0 quotes a decline of 60 percent and 80 percent since 2009, respectively.

This cost-competitiveness has been a driver of the increased corporate interest in buying renewable energy via physical or virtual power purchase agreements to support their sustainability or greenhouse gas (GHG) emission reduction strategies. The creation of a Western RSO (an aggregation of state markets in Washington, Oregon, California, Nevada, Colorado, Utah and Arizona) would change the landscape for renewable energy buyers in a few different ways.

The creation of a Western RSO would change the landscape for renewable energy buyers.

A Western RSO would lower the cost of integrating renewable generation

In order to accommodate intermittent generation, the grid needs flexibility. Wind and solar cause significant “noise” in the energy system throughout the day based on the weather conditions that exist. In order to manage this intermittency, the system operator must create financial incentives for flexible and ramping products to help smooth out variability (i.e., natural-gas-fired power plants, energy storage, demand response). The operational costs of these flexible generation and load resources equate to the cost of integrating renewables.

A geographically diverse regionalized grid would increase efficiency and decrease integration costs. The amount of flexible resources required for reliability would decrease in proportion to the overall system size because the impact of localized weather events and the corresponding spikes or plunges in renewable generation are less pronounced when the supply and demand on the system are spread across a larger physical area.

Since RSOs are revenue-neutral organizations, operational costs are spread across all generators via grid charges. A decrease in the cost of integrating intermittent resources would result in lower operating costs for renewable generators, allowing developers to pass through a more competitive PPA price to the buyer.

A Western RSO would increase the value of renewable energy in the wholesale market

Once a seller and a buyer agree to a PPA price, the buyer reaps the benefit of the energy price and the renewable energy certificate price in the market. In CAISO, the value of renewables, specifically solar, has decreased over time as more generation has been integrated into the system. This is largely due to oversupply when the sun is shining.

FIGURE: Historical and Projected Wholesale Market Value of Solar in 2025 With and Without a Western ISO (WISO)

<img=””>Historical and Projected Wholesale Market Value of Solar in 2025 With and Without a Western ISO (WISO)

Source: Energy GPS

Before significant solar capacity was installed, periods of high solar production were closely correlated with periods of high energy usage (hot days mean more air conditioning) and peak electricity prices. Now, with more than 10 gigawatts of solar installed across CAISO, the periods of maximum solar output more frequently correspond with low or negative wholesale prices.

The degraded solar value is problematic for businesses that may be buying solar via a virtual PPA, under which they benefit from wholesale prices above the PPA rate but are required to pay the delta when wholesale prices fall below the PPA rate. Within a Western RSO, it would be easier to move power around the grid thanks to alternate transmission paths, and renewables can become a cost-effective export during periods of over-generation.

Analysis from Energy GPS estimates that the average wholesale price for solar in 2025 would be ~120 percent higher if the West moved to a regionalized grid.

A Western RSO would allow for a broader array of transaction structures for corporate buyers

By expanding CAISO market constructs to neighboring states, physical purchases and virtual PPAs would be available to buyers throughout the Western grid.

Under the current grid structure, a business that is interested in purchasing Washington wind via a virtual PPA is likely to transact at the Mid-Columbia trading hub (one of two liquid points in the Pacific Northwest). The buyer would bear the costs associated with delivering and liquidating power to the trading hub, including transmission, logistics, and the bid/offer spread.

Additionally, the buyer would be subject to pricing at Mid-Columbia that is less reliable and more at risk of volatility than a hub within an independent system operator (ISO) territory; Mid-Columbia is an “informal” hub and lacks the formal market rules that come with an ISO.

Alternatively, a similar project in CAISO would face none of the delivery costs and would be earning revenue from capacity payments (resource adequacy). The buyer would also benefit from greater wholesale price certainty at a hub that is subject to ISO market rules (such as NP-15 or SP-15). If both projects started at the same price, the CAISO project could be delivered at a lower cost to the corporate buyer. Moving to a Western RSO would increase the availability of cost-effective transaction structures for corporate buyers across the Western grid.

As detailed above, the creation of a regionalized Western grid would be beneficial for businesses looking to purchase cost-competitive renewable energy and decrease their Scope 2 GHG emissions. When considering renewable energy purchases in the West, corporate buyers should also keep in mind that an expanded RSO will allow for a cleaner grid overall — integrating renewables across a broader geographic region can reduce the need for redundant baseload resources and support the shutdown of fossil generation.

With a regionalized Western grid, there will be more options for buying cost-effective renewables, and the energy from your utility will be less carbon-intensive. In our opinion, these benefits add up to a very compelling case for business to support an expanded RSO.

With federal climate policy uncertain, it is increasingly important for renewable adoption to be driven by cities, states and the private sector.

For more information on the Western RSO, visit

Originally published on GreenTechMedia

More on 3Degrees +

The Climate Registry Affirms: RECS and Offsets are Important Decarbonization Tools

driving on highway

A small organization with a worldwide reach, The Climate Registry (TCR) is a non-profit that designs and operates greenhouse gas reporting programs across the globe and consults with governments worldwide on all aspects of GHG measurement, reporting, and verification.

Measurement is the first step

“Before looking for ways to reduce your climate impact, you need to understand your baseline,” says David Rosenheim, executive director of The Climate Registry. To that end, TCR has created a General Reporting Protocol that provides guidance and consistency in reporting on emissions and emission reduction or mitigation tactics such as renewable energy certificates (RECs) and carbon offsets.

Like its member companies, TCR annually measures its own GHG emissions. And, not surprisingly, given its mission, TCR is continually looking for ways to reduce its carbon footprint. But with a large portion of their emissions coming from business travel, their options were limited.

The role of RECs and offsets in the decarbonization toolkit

First, TCR looked to reduce their emissions as much as possible, using tools and policies like video conferencing and telecommuting.  For those emissions that can’t be eliminated, the organization sees the use of RECs and offsets as a best practice.

Based on a recommendation from their policy team, in 2015, for the first time, they purchased RECS and offsets to cover their scope 1 emissions (these are direct emissions from sources owned and controlled by the company) and market-based scope 2 emissions (which are from purchased electricity, heat or steam) as well as their business and commuting travel emissions.

air travel

“With aggressive decarbonization goals needed to address climate change, RECs and offsets have to be part of the answer – efficiency is not enough,” says Rosenheim.

To ensure that the products are high quality and legitimate, it is important to purchase verified RECs and offsets from a reputable source. When TCR was ready to buy, they turned to 3Degrees and selected Green-e® Climate certified offsets and Green-e® Energy certified RECs.

“We knew our purchases in particular would receive lots of scrutiny. That’s why we chose to buy from 3Degrees. They are a leader in the industry and set the bar high in terms of quality and integrity.”

Small businesses are an important part of the solution

As a small organization, TCR’s overall emissions are relatively modest.  But big or small, what each company does matters, according to Rosenheim.

“Being a responsible corporate citizen is not just the purview of large organizations. Small businesses have an important role to play in combating climate change, as almost half of all private sector employment and output comes from small businesses. These businesses are making decisions that impact our energy and fuel systems. At the aggregate and individual level, it is meaningful.”

More on 3Degrees + RECs or carbon offsets

Better Business, Better World (Books)

shipping a package

Who doesn’t like getting a package in the mail? Whether it is expected or not, opening the box always carries with it a moment of anticipation. What’s unfortunate is that the delivery comes with a carbon price tag. That’s because no matter how it is transported, all shipping has some measure of carbon emissions.

So what do you do when you are an organization dedicated to making a better world, yet success also equals a larger carbon footprint? It becomes a balancing act.  

(Carbon) Balancing Workplace DemandsBetter World Books

Better World Books’ business is to relocate books from one part of the globe to another and get them in the hands of new readers. Funding for this activity is raised by selling other books online direct to consumers. To reduce the carbon cost of all this transportation the team at Better World Books works with 3Degrees to purchase carbon offsets generated at projects actively keeping carbon from entering the atmosphere like McKinney Landfill in Texas. 

To make this work for the company there were two other key considerations: keep costs low so budget can stay focused on their mission. And managing the carbon footprint of all these shipments could not become an administrative burden. In response, the organization automated the process by building it into every transaction. The system is easy: a customer buys a book, pays a few pennies more and the book’s shipping-based carbon footprint is neutralized. Those pennies then goes into a pool that is annually used to purchase carbon offsets.

It’s wise decisions like this that have helped Better World Books become the global literacy player it is today.


Better World Books + 3Degrees

Once ready to purchase Better World Books knew they wanted to work with 3Degrees. “Their award winning reputation and work with Fortune 500 companies gave us confidence in their abilities,” said Diane Maier, Director of Global Marketing and Sales Support at Better World Books. “The fact that they are a B Corp too was a real bonus – we want to align our company with others that share the same values.”

Better World Books also supports renewable energy with renewable energy certificates (RECs), purchased from 3Degrees. Their combined purchase of RECs and carbon offsets in one year has an environmental impact similar to:


About Better World Books

Better World Books is a for-profit social enterprise and a global e-retailer providing products and information to socially conscious consumers. Better World Books collects and sells new and used books online matching each purchase with a donation, book for book, and with each sale generating funds for literacy initiatives in the U.S. and around the world. Since its founding in 2003, and Mishawaka, Indiana-based company has raised more than $23 million for libraries and literacy, donated 20 million books; re-used or recycled over 229 million books and achieved 44,000 tons of carbon offsets through carbon balanced shipping.

Corporate Power-Purchase Agreements: Proceed Carefully When Buying Renewable Energy

caution tape

A reality check for corporate and institutional energy customers.

Much like the rest of the clean energy industry, we are excited about corporate and institutional (C&I) customers taking meaningful action by directly purchasing renewable energy to reduce their carbon footprint, contribute to cleaning up the grid, manage volatile energy costs and get in front of regulatory changes. Indeed, gigawatts’ worth of power-purchase agreements (PPAs) have been signed by organizations over the past several years. However, while we absolutely encourage C&I customers to dip their toes into the PPA pool, we advise that these customers do so with their eyes wide open. These deals are regularly framed as moneymakers, but we know from experience that there is little certainty in the world of wholesale energy markets and energy development is rarely black and white. Therefore, this article focuses on the many shades of gray, pewter and slate so that C&I customers can assess the full picture and take a long-term view when considering the potential value of direct renewable energy procurement.

The rise of corporate renewable energy procurement

In 2002, C&I customers were in the early days of exploring ways to “green” their electricity usage. The establishment of U.S. markets for renewable energy certificates (RECs) provided an important enabling mechanism for these customers, as well as for the broader industry. These markets created a way to claim environmental benefits and monetize the value customers place on the associated attributes of renewable projects. Even today, RECs continue to serve an important role in enabling customers to match their electricity usage with renewable energy. However, the market has moved in recent years, due to two trends.

First, many C&I customers are seeking to demonstrate a more significant environmental impact — often by bringing new projects on-line, a process also known as “additionality.” Unlike the carbon-offset world, where there are specific criteria for additionality, there is no legal or widely accepted criteria for determining what constitutes “additionality” for renewable energy project development. Commonly, corporate customers link additionality to directly causing a new project to come on-line. With this view, purchasing unbundled RECs (i.e., the environmental attributes but not the energy) generally will not have any additionality value. On the other hand, PPAs, both physical and financial, do.

The second trend is that C&I customers interested in purchasing renewable energy want to see a financial benefit. Purchasing unbundled RECs (or purchasing electricity through a green tariff) is a cost — albeit a modest one, and one without other commodity-related risks. However, solar and wind costs are at historically low levels, allowing for very competitive PPA pricing and offering an intriguing economic opportunity for C&I customers. In short, PPAs promise to reduce costs, as well as to provide a long-term hedge against rising and volatile energy prices, future REC prices, and any eventual price on carbon.

If you’ve attended a renewable energy conference recently, you’ve likely seen charts documenting tremendous cost declines in the wind and solar sector. And it’s true: there is a lot to celebrate across the industry. Onshore wind costs have declined 50 percent since 2009, while solar module costs have fallen 80 percent since 2008, according to Bloomberg New Energy Finance. Similarly, in 2015, clean energy investment ($329 billion) outpaced investment by oil and gas companies, and for the first time there was more solar than natural-gas capacity added in the U.S. With the extension of the federal Production Tax Credit and Investment Tax Credit, there is significant reason to believe that high levels of investment will continue.

Amid this landscape of favorable cost and policy trends, it is no surprise that C&I customers are interested in renewable energy, and it is clear that corporate procurement is an emerging driver for significant new demand. Consider that 2015 was a record-setting year for corporate renewables: 3.2 gigawatts of utility-scale renewable transactions were signed by corporate buyers, and the capacity of wind PPAs signed by corporate customers exceeded that associated with utility purchases. Project developers, facing a slowdown in utility sales, have leapt at the opportunity to sell to a new market segment and are marketing both physical and financial energy products.

So clearly, instead of paying a green premium, C&I customers can now go green and save green. However, as these organizations consider entering renewable PPAs, they must realize they are entering the wholesale energy market and make sure to fully understand the potential benefits, as well as the risks associated with the potential value proposition.

A reality check

Despite the momentum gained during 2015, there have been only 430 megawatts of corporate procurement announcements through June 1, 2016, according to the BRC Deal Tracker. BRC noted that this apparent slowdown is most likely related to the rush of deals signed at the end of 2015 to beat the expiration of the PTC/ITC deadline, so we may see similar activity in the coming years as the PTC is set to decline. At present, though, we believe it is important for customers to proceed with caution and carefully consider potential opportunities, especially the ones that seem too good to be true.

Most corporations that have signed PPAs did so based upon the assumption that wholesale power prices will rise over time like a “hockey stick” (slowly initially and then faster later), but find themselves out of the money today. This concern was echoed in comments made by Brian Janous, director of energy strategy at Microsoft, during Bloomberg New Energy Finance’s Future of Energy Summit in New York. Janous commented, “If you’re signing a [power-purchase agreement] deal this year, you’re losing money.” He shared that he had to go to his CFO and explain to her that the original forward energy price curves that he had shown were off. It is important to note that being out of the money in today’s market may be completely expected based on the pricing structure of the specific deal and the expected timeframe to realize the value from the contract, but customers must still understand the potential value and risks of proposed transactions.

The last decade has certainly disproved the conventional wisdom that wholesale power prices will go up forever. The discovery of large (and cheap) supplies of shale gas, coupled with flat or declining electric load growth, has created a dismal picture for wholesale power prices in the U.S. To put it in perspective, when we ran financial models for renewable energy projects 10 years ago, we benchmarked forward price curves against natural-gas spot prices at Henry Hub in excess of $10/MMbtu. By comparison, natural-gas prices today are <$2/MMbtu. In addition, as the grid continues to dispatch an increasing volume of renewables at low marginal costs, there will remain downward pressure on wholesale market prices, especially in areas with higher concentrations of renewables.

It is critical to understand regional differences across energy markets — particularly as it relates to the correlation of market pricing with energy production, and potential congestion and curtailment risks. For example, renewable energy PPA pricing in parts of the Southwest Power Pool (SPP) and Electric Reliability Council of Texas (ERCOT) territory are currently on par with market hub prices. However, financial models for such long-term PPAs will show varying valuations based on assumed forward price curves. So, if it looks too good to be true, question the forward price curve and other model assumptions. Often, these models do not take into consideration the gigawatts’ worth of new wind capacity to be added in the region of the PPA project, all ultimately generating at the same time in the same location, dramatically lowering the price during those hours. Furthermore, many models do not fully analyze the impacts of regional transmission planning and planned power plant additions and closures. There is a lomg history of overbuilding projects in markets where supply did not match actual load demand (e.g., the massive installation of new wind capacity in West Texas in the early 2000s required the extensive development of new transmission over the following decade in order to alleviate curtailment and negative pricing).

Recent events further support taking extra time approaching the virtual power-purchase agreement market opportunity. In May, the U.S. Department of the Treasury released guidance for the PTC that gives developers more time and leeway regarding the “beginning of construction” and “continuous construction” requirements and also favorably modifies several key factors of both requirements. As a result, customers have a little more time to execute wind PPAs to secure the full value of the PTC. The ITC for solar remains at full value until 2020. Other market changes — for example, the proposed California ISO expansion — could also have dramatic impacts on the cost of renewables in the West, as California-based customers would be able to procure from a broader market, taking advantage of higher capacity factor wind and solar projects from other western states, according to the results of Senate Bill 350 preliminary studies. Bottom line: There is time to heed the flashing yellow and still arrive at the desired destination safely and surely.

Take a long-term view and proceed cautiously

Thankfully, many of the early corporate renewable energy pioneers are sophisticated in their appreciation of the dynamics described above. Microsoft’s CFO recognizes that clean energy is critical to the company’s overall corporate strategy and told Janous to stay the course. They may not be making money today — though they hope to with time; again, this may be because the majority of the value from the deal is to be realized after the first few years of the transaction. Regardless, Janous’ comments highlight the importance of taking a long-term view. It’s also important to remember that PPAs or “fixed-for-floating swaps” were initially about additionality, hedging costs and locking in certainty and value, not about making money. It seems, though, that the rush to sell to new corporate buyers has served to morph PPAs from what is fundamentally a risk-reduction instrument into a get-rich-quick scheme. Instead, if these PPAs are approached, framed and internally sold on their key benefits of 1) cleaning the larger grid by replacing coal and gas with zero-emissions renewable energy, 2) offsetting one’s carbon footprint, 3) hedging against rising energy and REC costs, and 4) potential cost savings, and not as a new revenue stream, then expectations will be aligned with reality and risk. With eyes wide open, companies can successfully incorporate PPAs into their energy procurement and sustainability portfolios — while helping meet their respective triple bottom lines to be good for people, planet and profits.

More on 3Degrees + PPAs

This article was originally published on GreenTechMedia

Scoping and Mitigating your GHGs

An airplane flying over mountain landscape representing responsibility for GHG

Most human activities emit greenhouse gases (GHGs). The dramatic rise began in the 1800s with the Industrial Revolution and today many GHG emitting activities are considered essential to the global economy. However, that doesn’t mean we are powerless. Here are three steps you can take to mitigate and reduce your carbon footprint. 

  1. Conservation through reduction and efficiency measures. Local utilities and hardware stores often have programs and products that help you use less every day.  
  2. Choosing renewable energy. Onsite generation, direct purchase agreements or matching usage with renewable energy certificates are all ways to get the environmental benefits of clean power for the electricity you do use.  
  3. Balancing carbon emissions. Purchasing carbon offsets allow you to compensate for non-electricity based emissions resulting from boilers, vehicle fleets and travel as examples.

Counting GHGs

To get started we recommend you prepare a GHG inventory following the World Resources Institute’s Greenhouse Gas Protocol. The protocol recommends you sort GHG producing activities by Scope 1, 2 and 3 criteria. Doing so will give you clear understanding of where GHG emissions originate. It will also give you a sense of where you have direct control over changes versus where you simply have influence, such as your supply chain. The separation by scope also avoids ‘double-counting’ of emissions.

  • Scope 1: Direct GHG emissions that occur from sources owned or controlled by the organization, such as emissions from combustion in boilers, furnaces, vehicles, and other assets owned or controlled by the organization.
  • Scope 2: GHG emissions from the generation of purchased electricity consumed by the organization. Scope 2 emissions physically occur at the facility where electricity is generated.
  • Scope 3: GHG emissions that are a consequence of the organization’s activities but occur from sources not owned or controlled by the organization. For example, Scope 3 GHG emissions are those associated with the production of purchased goods, employee commercial flying, or the use of sold products.

Once calculated you may be surprised by the size of your business’ carbon footprint. The good news is each scope category can be addressed:

3Degrees' GHG chart


What are greenhouse gases?

The health of earth’s climate is linked to how much sunlight is absorbed and reflected by our atmosphere. Our atmosphere acts like a filmy blanket around the planet, holding in some but not all of the heat. Some common atmospheric gases can thicken the blanket trapping in heat and cause temperatures to rise. These gases are called “greenhouse gases” or GHGs.


An Introduction to Renewable Energy Procurement: Onsite Solar Generation

busy city street out of focus

These are exciting times for companies and institutions interested in expanding their commitment to renewable energy. An evolving landscape is providing more options. But with more options comes more complexity.

At 3Degrees, we talk to a lot of clients that are interested in the procurement of renewable energy but aren’t always sure where to start. The purpose of this series is to help those new to renewable energy procurement better understand – at a high level – the options available to them. We will provide an overview (including the pros and cons) of each of the main options, including:

  • on-site generation
  • off-site, physical power purchase agreements (PPAs)
  • off-site, virtual PPAs
  • virtual net metering
  • direct investment, including tax equity

In this first article, we will discuss on-site generation. In later articles we will discuss the other options.
Before diving in, it is useful to review the primary benefits renewable energy procurement provides to organizations. They are fourfold:

  1. Sustainability initiatives: Most companies considering direct procurement have clear corporate goals to reduce their carbon emissions and/or increase their usage of renewable energy.
  2. Economics: For the organizations we work with, the economics of a transaction are as important as the sustainability results. Generally speaking, projects must provide both financial and environmental benefits to the company. Direct procurement can reduce costs, diversify energy supply, and hedge against future energy market volatility.
  3. Brand reputation: These projects can help a company strengthen its reputation as an environmental leader. Press coverage is common and can build positive brand impressions. Further, direct procurement can meet customer and investor requests to achieve meaningful sustainability goals.
  4. Transparency: Investors and customers are increasingly interested in companies disclosing the impacts of their operations on the environment. Companies that measure their environmental risk are better able to manage it and drive desirable action. The Carbon Disclosure Project is a good example of this global movement towards transparency.

On-site solar generation


Simply put, on-site solar generation involves installing equipment to generate renewable energy at the location where it is consumed. These projects are most often installed in states that allow net metering. Net metering is a state-specific policy set which allows customers to deliver surplus generation to the electric grid and spin their meters backwards, resulting in a credit from their retail energy service provider. However, on-site systems don’t have to be net metered and can simply serve on-site load directly. On-site renewable energy procurement is well established and examples of such corporate and institutional transactions are widespread. Solar power is most common (examples include IKEA and Kohl’s), but on-site generation can also include wind (Budweiser, Nestle), geothermal (Colorado, Idaho, and Oklahoma state capitols), biogas (New Belgium Brewing Company), and landfill gas (BMW, GM).


On-site generation has a number of things working in its favor: cost savings, availability, ease of transaction, and visibility.

  • Cost savings: On-site systems can provide immediate savings with a PPA or equipment lease structure or an attractive return on investment over time with asset ownership. In these cases, the PPA or lease payments are less than the customer’s retail electric rates and are fixed for many years to come, as compared to retail tariffs which tend to rise with inflation. Similarly, with direct ownership, the upfront cost of the system will be offset over time by reductions in the electricity bill. In certain cases, on-site generation can also help reduce demand charges (i.e., those retail charges tied to the maximum power required to serve the customer)
  • Availability: On-site opportunities are also broadly available. Forty-four US states (and DC and Puerto Rico) – or forty-three depending whether you consider the recent changes to Nevada net metering rules – allow net metering helping to create economic opportunities across the country.
  • Ease of transaction: On-site PPAs, leases, and asset purchase are common, and the contracts themselves have become more standardized over time. The direct consumption of on-site generation (and the resulting economic benefits) is also simple and straightforward, making it easier to gain support from internal stakeholders. Together, these dynamics can facilitate a swift and smooth contract execution. In addition, on-site generation can be integrated easily into a diversified and well-balanced renewable energy portfolio.
  • Visibility: On-site projects are often visible to the host company’s employees and customers, which helps in messaging. Equally important, on-site projects are easy to explain and easy for stakeholders to understand, creating strong marketing and brand building opportunities.

On-site solar generation can be integrated easily into a diversified and well-balanced renewable energy portfolio.


One of the most significant benefits of on-site generation – location – can also be its largest drawback. The location of the system can be a challenge in a couple of ways: space and resource availability and site permissions.

  • Space and resource availability: First, these projects can require significant space – either rooftop or land, which may not be readily available. The result is that on-site projects typically only offset a portion of the electricity purchased from the customer’s retail electric provider. It is also important to take the energy resource into consideration. In the event of poor resource exposure, large buildings, trees or other obstructions, the projects may not generate the desired level of savings.
  • Site permissions: Next, a company must also have the right to install the on-site project. In situations where the customer leases the property, they may not be permitted to install the project or the term of the PPA or solar lease may be longer than the underlying property lease.


Although on-site facilities tend to fall lower on the risk spectrum, we see two main types of risks: performance and regulatory.

  • Performance risk: There is always the risk that the system does not operate as designed, which can affect cost savings and projected returns. This risk is minimal as solar power is a mature technology and can be further mitigated by working with experienced developer and installers.
  • Regulatory risk: The economics of on-site projects typically hinge on the existing regulatory framework (most notably related to how excess generation is credited to the customer). Often, operating on-site projects can be “grandfathered” from the impacts of regulatory changes, but there is no guarantee that this will be the case. 3Degrees helps customers monitor the regulatory landscape to identify any potential rule changes early, understand the potential impacts, and advocate for rules that maintain the benefits in place when the project was installed.


There are number of options for structuring and realizing an on-site deal. The three most common are:

  1. Asset purchases by which companies purchase the system outright and realize the tax benefits by monetizing the investment tax credit (ITC). The advantage of this structure is that the project is fully owned and, if properly maintained, will have a significantly longer useful life than the typical 15-20 year PPA or lease. The primary disadvantage of this option is the upfront capital requirements which can make it more difficult to sell internally.
  2. Power purchase agreements (PPAs) are a very common way to purchase on-site renewable generation. In this scenario, a developer owns and operates the project, and the customer pays the developer for the energy generated by the project at a predetermined rate. The benefit of this option is that it does not require upfront capital and the system Operations & Maintenance is handled by the developer. Importantly, this option necessitates a long-term relationship with the owner/operator of the project (increasing the importance of picking the right one).
  3. Renewable project leases are similar to PPAs, but the payment is not directly related to energy production. The costs and benefits of an onsite renewable project lease are similar to a PPA, and customers can similarly protect themselves through performance guarantees in the leases.

In summary, on-site generation projects are a common, easily understood way to procure renewable energy. This structure offers substantial (typically limited) benefits but must be implemented carefully to optimize cost savings and mitigate potential risks, highlighting the importance for even savvy customers to engage a partner who can help them navigate the many decisions along the procurement process. In future articles we will cover the pros and cons of off-site renewable energy projects.