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Powering a Sustainable Future: The Smart Ways Businesses Can Buy Renewable Electricity

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Transitioning to renewable electricity is one of the most impactful steps your organisation can take to reduce emissions and demonstrate leadership in sustainability. But with multiple options available, how do you choose the one that fits your operational, financial, and environmental goals?

Below, we break down the four main ways to buy renewable electricity- each with its own advantages, challenges, and strategic implications.  We explain how all options use Renewable Energy Certificates (RECsI-RECs, GOs, TIGRs, LGCs, ZNECs, J-Credits) to verify the environmental benefits.

1. Onsite Renewable Energy (Behind-the-Meter)

What it is:

The installation of renewable generation systems, solar panels, wind turbines or bioenergyBiomass is plant or animal material used to produce electricity or heat. Examples include forestry by-products, crop waste, animal waste and food processing waste. Biomass is considered a renewable energy fuel if it comes from a sustainably managed source. directly at your facilities. The electricity powers your operations, reducing dependence on the grid.

Why it matters:

Considerations:

Higher upfront costs, available space, and maintenance responsibilities can be barriers for some organisations. However, the sense of ownership and visible sustainability benefits make it a compelling option.  It is also possible to have onsite renewable energy provided “as-a-service”, in this case another entity owns & maintains the system, and the facility simply pays for the renewable energy that is generated.

2. Power Purchase Agreements (PPAs)

What it is:

A PPAPower Purchase Agreement is a direct agreement between a renewable energy project developer and an end-user for the sale of renewable electricity. Behind the meter, PPAs are commonly used for on-site solar. Off-site PPAs supply renewable energy from projects that are connected to the same electricity grid as the end-user,  but can be located anywhere. is a long-term contract with a renewable energy generator, where you buy electricity and RECs directly from a specific site (often offsite and connected to the grid).

Why it matters:

Considerations:

PPAs typically require long-term commitments and may be more suitable for organisations with consistent energy demand and a robust credit profile.

3. Virtual Power Purchase Agreements (VPPAs)

What it is:

A VPPA is a financial contract not a physical one where you agree to purchase the output (or financial value) of renewable energy projects. You don’t directly receive electricity but gain the environmental attributes (RECs) and price benefits through a “contract for difference”.

Why it matters:

Considerations:

Because it’s a financial hedge, VPPAs can expose buyers to market risks and price volatility, so they’re best suited for organisations with internal energy or finance expertise.

4. Renewable Energy Certificates (RECs)

What it is:

RECs (or equivalent instruments like LGCs in Australia) represent proof that 1 MWh of electricity was generated from a renewable source. Organisations can purchase RECs to offset their grid electricity use.

Why it matters:

Considerations:

While RECs support renewable generation indirectly, they may not increase additional renewable capacity if there is substantial oversupply in the market.  RECs may seem more abstract than other renewable energy options, but all options in fact use RECs to verify the validity of the renewable energy.  See Northmore Gordon’s moREnewable100 to do more with less. 

5. Finding the Right Mix

Each approach offers a unique balance between cost, control, and impact. Many organisations use a hybrid strategy combining onsite generation with PPAs or RECs to meet their sustainability targets efficiently while managing risk.

The best choice depends on:

Partnering for a Renewable Future

At Northmore Gordon, we help clients assess their energy use, explore renewable options, and design tailored procurement strategies. Whether you’re just beginning your renewable journey or scaling your commitments, we ensure your investment delivers measurable impact for your business, your stakeholders, and the planet.

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What are the four main ways businesses can buy renewable electricity, according to Northmore Gordon?

Northmore Gordon outlines four main ways: 1) Onsite Renewable Energy (Behind-the-Meter), 2) Power Purchase Agreements (PPAs), 3) Virtual Power Purchase Agreements (VPPAs), and 4) Renewable Energy Certificates (RECs).

What is onsite renewable energy (behind-the-meter) and what are its benefits?

Onsite renewable energy involves installing renewable generation systems—such as solar panels, wind turbines, or bioenergy—directly at a facility to power operations and reduce grid dependence. Benefits include direct control over generation and use, visible sustainability impact and reduced Scope 2 emissions, potential long-term cost savings once capital investments are paid off, and the ability to register and retire RECs from the generation for audit purposes. It's also possible to have onsite renewable energy provided 'as-a-service,' where another entity owns and maintains the system and the facility just pays for the renewable energy generated.

What are the considerations or drawbacks of onsite renewable energy?

Higher upfront costs, available space, and maintenance responsibilities can be barriers for some organisations, although the sense of ownership and visible sustainability benefits make it a compelling option.

What is a Power Purchase Agreement (PPA) in the context of buying renewable electricity?

A PPA is a long-term contract with a renewable energy generator where a business buys electricity and RECs directly from a specific site, often offsite and connected to the grid. It ensures price stability with fixed or predictable energy costs, provides traceability of exactly where renewable electricity comes from, and demonstrates commitment to supporting new renewable infrastructure. PPAs typically require long-term commitments and may suit organisations with consistent energy demand and a robust credit profile.

What is a Virtual Power Purchase Agreement (VPPA) and how does it differ from a standard PPA?

A VPPA is a financial contract, not a physical one, where a business agrees to purchase the output or financial value of renewable energy projects. Unlike a standard PPA, the buyer doesn't directly receive electricity but gains the environmental attributes (RECs) and price benefits through a 'contract for difference.' VPPAs offer flexibility since there's no need to match physical supply to operations and are ideal for companies with multiple or global sites, though they expose buyers to market risks and price volatility, making them best suited for organisations with internal energy or finance expertise.

What are Renewable Energy Certificates (RECs) and why do businesses use them?

RECs (or equivalent instruments like LGCs in Australia) represent proof that 1 MWh of electricity was generated from a renewable source. Organisations can purchase RECs to offset their grid electricity use. They offer a simple and fast way to achieve renewable electricity claims, require no infrastructure investment (opex not capex), provide flexibility for meeting interim or small-scale sustainability goals, and are often the lowest cost mechanism to achieve renewable energy.

Do all four renewable electricity procurement options rely on the same underlying instrument?

Yes. The article notes that while RECs may seem more abstract than other renewable energy options, all options in fact use RECs (or equivalent instruments like I-RECs, GOs, TIGRs, LGCs, ZNECs, J-Credits) to verify the validity of the renewable energy.

What is a limitation of relying on RECs for renewable energy claims?

While RECs support renewable generation indirectly, they may not increase additional renewable capacity if there is substantial oversupply in the market.

What factors should a business consider when choosing the right mix of renewable electricity procurement options?

The best choice depends on the organisation's energy consumption profile, budget and risk appetite, sustainability objectives, and timeline for achieving renewable goals. Many organisations use a hybrid strategy combining onsite generation with PPAs or RECs to meet sustainability targets efficiently while managing risk.

How does Northmore Gordon help businesses with renewable electricity procurement?

Northmore Gordon helps clients assess their energy use, explore renewable options, and design tailored procurement strategies, whether a business is just beginning its renewable journey or scaling its commitments, to ensure the investment delivers measurable impact for the business, its stakeholders, and the planet.

What is moREnewable100 and how does it relate to renewable electricity procurement?

moREnewable100 is a Northmore Gordon service, referenced in the article as a way to 'do more with less' regarding renewable energy certificates. According to supporting knowledge, it allows organisations to procure renewable energy certificates without replacing existing electricity supply contracts, offering multi-site coverage, procurement flexibility, RE100-aligned sourcing support, and technology and due-diligence support to verify certificates.

Who wrote the article on renewable electricity procurement, and when was it published?

The article was written by Sanah Bhalla and published on November 4, 2025, with an estimated reading time of 4 minutes.

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