Clean power: More than PR fluff?

Hundreds of companies are going green with renewable power - and environmentalists say it's more than just bunk.

 
NEW YORK (CNNMoney.com) -- Corporate America is doing backflips over renewable energy.

Google announced plans last October to get 30 percent of its electricity from the sun. Wal-Mart put out a call for solar panels last December in a bid to eventually get all its energy from renewable sources.

Wells Fargo pays a premium on 42 percent of their electric bill that goes to support clean energy, with Johnson & Johnson, DuPont, HSBC, and Cisco among some 600 other companies in a similar arangement.

Making Renewables Pay

Now this all sounds well and good, but how far will this really go in nursing the nascent renewable energy field, and how much is just public relations fluff?

"It's 98 percent real and 2 percent PR," said Mike Eckhart, president of the American Council on Renewable Energy, a group formed to promote the use of green energy. "The CEOs can't just pay lip service anymore, the employees read the papers too."

Eckhart held out Wal-Mart's plan to buy what he said were massive amounts of solar panels (Wal-Mart wouldn't say how many), as an example of corporate America's commitment to renewable power.

"These are our customers, and they are starting to buy in very large amounts," he said. 'And there are thousands of corporations in this country, when they start to move as a herd, it's huge."

As a representative from the renewable power business, Eckhart could be expected to paint the best picture possible. But other environmental groups were also cautiously optimistic on corporate America's newfound love of all things green.

"It's absolutely no substitute for a federal renewable energy standard or a cap on carbon emissions," said John Coequyt, an energy policy specialist at Greenpeace. "But it's certainly a positive first step, and I think their commitment to climate change is pretty sincere at this point."

The commitment generally comes in two forms: installing renewable energy directly at a property, or paying someone else to produce it.

In the case of big-box retail stores, with massive roof space and relatively little electricity use, installing solar power makes sense.

Coequyt said all sorts of big-box retailers are taking advantage of state incentives to offset the costs. "For those companies, the decisions being made are purely economical," he said.

For large scale industrial users, or firms with less room to actually generate power on site, paying someone else is another option.

Known as renewable energy credits, the company pays a premium on its electric bill, or part of its bill. That money then goes to producers of renewable power, kind of like a subsidy, netting them above-market rates for their power.

"It's a very effective means of bringing on new renewable capacity," said Gabe Petlin, a program director at 3 Phases Energy, which brokers deals between renewable energy producers and companies. "Without it, (the producers) are really left selling their electricity as a pure commodity, like coal, which is cheaper."

3 Phases and its competitors also run similar programs with utilities, allowing residential customers to pay a little more on their electric bill to support clean power.

The ultimate goal is that enough people will use renewable energy so producers have the economies of scale that will reduce costs, or that costs of producing electricity from fossil fuels will rise, or some type of combination of the two.

In the meantime, consumers that opt for the program get the piece of mind knowing they helped nurture the industry.

"We need development of new energy sources and we wanted to be part of that," said Mary Wenzel, vice president of environmental affairs at Wells Fargo. "It's good business for Wells Fargo and our shareholders."