Is Green Energy En Vogue in Corporate America?

For years, companies have been paying lip service to the idea of a green-energy revolution. Sure, they may sponsor a wind farm here or there, or they might try to get LEED certification for their building, but when push came to shove, companies would shed these efforts at the first sign of economic trouble. 

Today, this isn't so much the case anymore. Just a few weeks ago, Verizon announced an ambitious plan to spend $100 million to build 70 million kilowatt-hours' worth of solar energy facilities across the country to power 19 of its facilities. Many companies are finding that investing in alternative energy and energy conservation projects gives big relief to costs and in turn helps to pad the bottom line. From Apple's  (NASDAQ: AAPL  )  solar projects to Starbucks' (NASDAQ: SBUX  ) energy conservation efforts, the green-energy movement its popping up all over corporate America. Let's look at what some big companies are doing and how it is helping the bottom line.

Spending a dime to save a dollar
Since 2001, the average cost of electricity has increased by more than 35%. For many companies, that jump represents a major cost problem, and the only way to deal with it is to reduce total electricity consumption. Starbucks hopes to reduce its per-square-foot energy costs by 25% from its 2008 consumption levels by the end of 2015. Assuming each Starbucks store is about 2,000 square feet (50 by 40 feet), the program would save the company $50 million a year based on current electricity prices. 

The potential gain in operational costs is so great that even oil companies are jumping on board. Devon Energy's  (NYSE: DVN  )  new Oklahoma City headquarters was meticulously designed to reduce energy consumption by 20% and overall water use by 2.4 million gallons a year. (At that rate, the company will have enough water to hydraulically fracture a new well once every two years.)

The first rule in business is to make money, and it's a lot easier to do that when you're spending less money to keep the lights on. Corporate America is catching on, and fast.  

Green power
Gone are the days where companies have put a few token solar panels on their corporate headquarters for the PR. Today some of the largest companies in the world are making big investments in alternative-energy projects. Back in March, Apple announced that 75% of the company's operations run on alternative energy, and it also acknowledged that it owned the largest private solar facility in the U.S. and has plans to get a second facility of similar size online by the end of the year. 

One of the biggest reasons Apple has made such large alternative-energy investments is to power its data centers. Energy bills can represent as much as 75% of total operating costs for a data center, so the upfront costs for a nearly free energy source can pay for itself in a pretty short amount of time. About four years ago, Intel (NASDAQ: INTC  ) was the first to explore the idea of powering data centers with solar, and now the company supplies 100% of its 3.1 billion kilowatt-hours of electricity used with alternative sources.  

Of course, data centers aren't the only ones to benefit. Let's look at the top 10 companies using green power in the United States. From microprocessors to macchiatos, companies from almost every sector are finding an economic benefit in using alternative energy.

Rank Company 

Total Power Consumed 
(Million kWh)

% of Power from 
Green Sources

Sources
1 Intel 3,100 100%

Biogas, biomass, small-hydro, solar, wind

2 Microsoft 1,936 80% Biomass, small-hydro, solar, wind
3 Kohl's Department Stores 1,536

105%

Solar
4 Whole Foods Market 800 107% Solar, wind
5 Wal-Mart Stores 751 4% Biogas, solar, wind
6 Staples 636 101% Biogas, solar, wind
7 Starbucks 592 70% Wind
8 Lockheed Martin 546 30% Biogas, small-hydro, solar, wind
9 Apple 537 85%

Biogas, biomass, geothermal, 
small-hydro, solar, wind

10 Cisco Systems 459 44% Solar, wind

Source: US Environmental Protection Agency.

What a Fool believes
The use of alternative-energy sources has been picking up steam recently. With the cost per watt for a solar installation becoming a level comparable with other electricity options, more and more companies are finding that investing in alternative energy is more than just a feel-good endeavor. Goldman Sachs (NYSE: GS  ) plans to invest $40 billion in alternative-energy projects over the next 10 years. The company just got off to a big start by investing $500 million in SolarCity to finance the upfront installation costs for SolarCity's customers. Even Warren Buffett is jumping big into the solar business. Berkshire Hathaway subsidiary MidAmerican Energy will spend $5.4 billion on three major solar projects currently being constructed in the United States. 

To learn more about what these major companies are see in the value of the solar industry, check out The Motley Fool's premium report on First Solar, one of the few companies in the solar industry making a profit right now. With this report, you'll also get continuing updates and guidance whenever news breaks. To get started, simply click here now.


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