Sol Systems and Microsoft announced Tuesday they will work together on a portfolio of 500 megawatts of U.S. solar projects as well as investments in communities on the front lines of climate change.
Washington, D.C.-based Sol Systems will finance, develop and operate the new solar projects, which will add to its existing 1 gigawatts of solar in operation or construction. The portfolio represents the largest single renewables investment yet from Microsoft, which plans to reach “carbon-negative” status by 2030 and by 2050 remove more carbon than it has historically emitted.
While the size of the portfolio alone is notable, the partnership is also unique for its emphasis on community involvement. Unlike many corporate renewables purchases, which have become a significant driving force for new solar and wind additions, the Microsoft and Sol Systems collaboration emphasizes community impact.
Projects will be sited in "under-resourced communities" disproportionately impacted by pollution and climate change. The companies did not detail how those communities would be selected, though Sol Systems noted a particular emphasis on communities that have been significantly economically impacted by the coronavirus pandemic.
The partnership will also offer up $50 million, pulled from power purchase agreement revenue, in community-led grants and investments for education, career training, land restoration and clean energy and efficiency programs. Microsoft said the partnership would prioritize funding for minority- and women-owned businesses. An advisory board made up of Microsoft and Sol Systems representatives plus community organization leaders will guide the spending.
“We recognize that climate and environmental issues don’t impact every community the same way and we need to address environmental equity as a broader issue,” said Lucas Joppa, Microsoft’s chief environmental officer*, in a statement on the partnership.
Project size will range from between 2 megawatts and 10 megawatts in urban environments to installations larger than 50 megawatts. The two companies did not provide specifics on where the solar projects would be located but said the portfolio will span several states, with some built in the territory of the PJM Interconnection.
Another business-led climate group
On the same day as unveiling the partnership with Sol Systems, Microsoft announced it was joining up with eight other companies including Mercedes-Benz and Starbucks to help develop research and guidance for corporations transitioning to net-zero emissions by mid-century. The Environmental Defense Fund, a green group that has promoted market-based approaches to combatting climate change, is another founding member and the only non-profit organization among the current group.
“The gap between where we are on climate change and where we need to be continues to widen. So does the gap between businesses that just talk about action and those that are actually getting the job done,” EDF President Fred Krupp said in a statement. “This new initiative holds tremendous potential for closing these gaps. Especially if other businesses follow in the coalition’s footsteps.”
To meet its own goals, Microsoft also said it would release a request for proposals this week in search of carbon removal technologies, both natural and technology-based, to help suck enough carbon out of the air to match the emissions it has released since its founding in 1975.
Corporate America has become increasingly aggressive in its climate and clean energy goals in recent years, in part due to pressure from activists, changing consumer attitudes towards sustainability and more favorable economics for wind and solar. The number of Fortune 500 companies with carbon targets grew fourfold between December 2015 and September 2019, according to analysis from Natural Capital Partners, a carbon offset retailer.
In the past few weeks, Amazon has announced its “Climate Pledge” and Engie announced a new renewables portfolio alongside Hannon Armstrong with offtakers including Target and Microsoft. On Tuesday, Apple said it would expand net zero efforts to its entire supply chain, and corporations including Salesforce and Eileen Fisher signed a letter to lawmakers calling for a delayed phase-down of clean energy tax credits.
Companies without their own stringent requirements may have to accelerate their plans come January. Recent proposals from presumptive Democratic presidential nominee Joe Biden call for entirely clean electricity by 2035 and net-zero buildings by 2030. Biden’s plan to reach net-zero emissions across the economy by mid-century matches up with the vision Microsoft and other corporates centered in their “Transform to Net Zero” campaign, but the corporate plan doesn't ride on the much-anticipated 2020 election.
*This title has been corrected.
This story has been updated.