In recent years, interest in renewable energy contracts from nonutility buyers has grown tremendously, and retail and wholesale bakeries are part of this story. According to the Business Renewable Center’s Deal Tracker, large companies alone have been responsible for adding more than 7.5 gigawatts (GW) of renewable energy to the North American grid each year since 2014.

Soaring interest in clean energy and dwindling prices for solar are two factors in play. According to the investment bank Lazard, the cost of solar energy in the US fell by 85 percent between 2009 and 2016.

As businesses rely more on energy-intensive operations, including manufacturing facilities, solar is steadily gaining traction as a choice for powering large commercial and industrial facilities. Utility-scale photovoltaic solar has become cost-competitive with conventional forms of electricity in many areas, especially for facilities with large energy needs. 

Solar power is integral to the success of Alvarado Street Bakery, a wholesale bakery in the San Francisco Bay area. The bakery’s solar array consists of 1,722 solar panels on a 1.5 acre-roof.

“We are especially proud to say we now produce breads baked by the oldest energy source on the planet,” according to Alvarado Street Bakery. “Yes, like in the ancient days in Egypt when sprouted breads were baked on ovens that relied on the sun, we now bake our sprouted baked goods with 40 percent of the electricity coming from the sun.”

According to The Moab Times-Independent, retailer Red Rock Bakery in Moab became the first fully solar bakery cafe in Utah. In June, owner Howard Trenholme installed 76 rooftop solar panels, which have the capacity to produce 25 kilowatts of power at his bakery and the office building where the business is located. The installation was done as part of Rocky Mountain Power’s program that any energy the solar panels generate will offset the bakery’s energy use.

Any additional electricity generated will go toward other tenants in the building. According to Trenholme, the solar panels will generate roughly 80 percent of the building’s energy needs. “It’s amazing how much [energy] it’s cranking out. Very pleasing,” he says. Trenholme added the panels (which have a 25-year lifespan) will pay for themselves after seven years, not considering tax incentives.

Today, there are new ways to purchase solar energy that reduce or suppress upfront costs, reduce siting barriers and ensure a level of price stability not achievable with fossil fuel electricity. Power-purchase agreements (PPAs) allow businesses to procure solar electricity at a predictable cost for up to 25 years. PPAs free a business from having to manage a solar power plant, while taking full advantage of predictable pricing.

The cost of energy is only part of the equation, however, and these deals are far from simple. The most common type of contract is a virtual PPA. While complicated, these contracts are popular in part because they do not impact the buyer’s preexisting arrangement to buy power from the local utility.

Instead, the buyer agrees to buy energy from a new wind or solar farm at a fixed price and, in exchange, receive the revenue generated from selling that energy into the wholesale market as well as the associated renewable energy certificates.