As businesses and public sector organisations strive for net-zero targets, renewable energy adoption is at the forefront of most energy management strategies. However, a critical decision for energy managers is choosing between on-site renewable energy generation and off-site energy procurement. Both approaches offer advantages and challenges, and the right choice depends on an organisation’s operational needs, sustainability goals, and financial considerations….
1. Understanding On-Site Renewable Energy
On-site renewable energy refers to installing and generating clean power directly at an organisation’s premisesthrough technologies such as:
- Rooftop solar panels for self-sufficient electricity generation.
- On-site wind turbines for larger energy demands in rural or industrial locations.
- Biomass systems for heat and power generation in facilities with sustainable fuel access.
Benefits of On-Site Renewable Energy
✔ Energy cost savings – Reduces reliance on grid electricity, cutting operational expenses.
✔ Greater energy security – Less exposure to energy price volatility and supply disruptions.
✔ Lower carbon footprint – Immediate emissions reductions, helping to meet ESG and net-zero targets.
✔ Potential revenue generation – Excess energy can be sold back to the grid through incentive schemes.
Challenges of On-Site Renewable Energy
⚠ High upfront costs – Initial investment in solar, wind, or biomass infrastructure can be significant.
⚠ Space constraints – Urban businesses may lack sufficient space for renewable installations.
⚠ Maintenance requirements – Regular servicing and monitoring are needed to maintain efficiency.
2. Understanding Off-Site Renewable Energy
Off-site renewable energy refers to sourcing green electricity from external suppliers through:
- Power Purchase Agreements (PPAs) – Long-term contracts with renewable energy providers for a fixed price.
- Virtual Power Purchase Agreements (VPPAs) – Financial agreements supporting renewable projects without direct energy delivery.
- Community solar and wind programs – Shared renewable energy initiatives for organisations without on-site generation capabilities.
Benefits of Off-Site Renewable Energy
✔ No infrastructure investment – Avoids capital costs associated with installing on-site renewable systems.
✔ Scalability – Businesses can source large volumes of renewable energy without physical constraints.
✔ Predictable energy costs – PPAs provide long-term price stability, protecting against market fluctuations.
✔ Flexible sustainability options – Ideal for organisations in leased buildings or urban environments.
Challenges of Off-Site Renewable Energy
⚠ Limited direct energy savings – Unlike on-site generation, off-site energy still involves transmission and distribution costs.
⚠ Contract complexity – PPAs and VPPAs require long-term commitments and legal oversight.
⚠ Less energy autonomy – Organisations remain dependent on external providers for energy security.
3. Making the Right Choice
For businesses with sufficient space and capital investment capabilities, on-site renewable energy can provide long-term cost savings and energy independence. However, organisations with limited space or high energy demands may find off-site solutions more scalable and cost-effective.
Many UK organisations are now adopting hybrid approaches, combining on-site solar with off-site wind or PPAs to achieve energy security, carbon neutrality, and financial efficiency.
In the short-term, the choice between on-site and off-site renewable energy depends on cost, infrastructure, and sustainability objectives. By evaluating energy needs and working with the right renewable energy partners, businesses can develop a tailored energy strategy that balances financial and environmental goals.
Are you searching for renewable energy solutions for your organisation? The Energy Management Summit can help!
Photo by Karsten Würth on Unsplash
