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With the rising temperatures and effects of climate change, it has become more and more apparent for companies to measure and reduce their emissions. Reducing emissions is not only necessary for compliance or investor interests but also helps organizations identify risks associated with climate change. In order to understand how installing solar can reduce your scope 2 emissions, it is only right that we first understand all emission categories.
In 2001, the Greenhouse Gas (GHG)Protocol published its “Corporate Accounting and Reporting Standard”, providing a framework for measuring and managing emissions for private and public sectors. The framework categorizes emissions into three distinct categories:
1. Scope 1
2. Scope 2
3. Scope 3
Dividing emissions into three categories is intended to help track progress towards the significant reductions required to limit global temperature below 1.5°C, which is the primary objective of the Paris Agreement.
Scope 2
While calculating Scope 1 and Scope 3 emissions can be complex considering a large number of sources and the need for a sophisticated system. Calculating Scope 2 emissions can be done easily through utility bills of electricity and heat/steam. This makes Scope 2 emission reduction extremely easy and, organizations can begin their decarbonization journey with Scope 2.
According to the World Resource Institute's Scope 2 Guidance, "Scope 2 represents one of the largest sources of GHG emissions globally: the generation of electricity and heat now accounts for at least a third of global GHG emissions.
If your company purchases electricity, distributed heating or cooling, or steam for industrial processes- Scope 2 emissions will inevitably be created. Grid electricity largely constitutes coal-based electricity, as of today also ~60% of India’s Installed capacity is fossil fuel-based. Hence when you switch to solar you reduce the demand from the grid and thereby reduce the emissions associated with it.
It is important to note that, adopting solar may or may not be able to suffice the total electricity requirement but it is definitely a stepping stone in emission reduction.
What makes the best case for Solar Rooftop in your journey of reducing Scope 2 emissions and achieving net zero?
Installing Solar rooftop plants is one of the most effective measures as it directly reduces the need for fossil fuel(coal) based electricity providing clean electricity.
Every single inch
The possibilities are endless when it comes to installing solar.Typically, companies install solar rooftop plants on the roof of their manufacturing capacity or headquarters but in case of bigger premises, not just the main facility or office, but even warehouses (within the premise), cafeterias,parking sheds, other utility buildings can also have solar rooftop. This ensures you fully utilize the potential of the space available within the facility. It also showcases the company’s efforts towards green transition
Long Term and a Reliable Solution
Installing solar rooftops is a long-term solution, as solar plants can last 25-30 years. Installing a solar rooftop plant also means you have control over its operation making it an extremely reliable source of clean electricity.Since the company manages the operation and maintenance of the plant it also ensures minimum downtime. This also means you have sorted your Scope 2 emissions reduction strategy for the next 25-30 years.
Early Adopter Advantage
While installing solar reduces your dependence on the utility grid,and the tariffs associated with it. Also, you no longer depend on the utility’s strategy or plan to switch to renewable or become green.
With coming environmental regulations from India as well as importing countries, the company will be well positioned and ready with only Scope 1 and Scope 3 to take care of.
Beat the Tariffs
As we are aware, installing solar is not just an emission-reducing mechanism but also a savings tool. When you install solar, you reduce your electricity bills, hence adopting solar early on will prove beneficial in the longer run with the rising electricity tariffs.
Tax Incentives
When it comes to CAPEX required for solar rooftops, the Indian government provides accelerated depreciation benefits making it even more attractive.
Solar Financing
Gone are the days when companies had to decide between purchasing machinery or other assets for profits or installing solar for savings.Companies now can have the best of both worlds and lead decarbonization. Companies can apply for loans and get tailor-made solutions to ease the process.
In Conclusion
While companies struggle to begin their emission reduction journey owing to the complexity of tracking emission, carbon accounting software, installing solar is a simple, nobrainer and in fact a cost saving Scope 2 reduction measure.
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