Why Cisco, Why Solar, Why Now

In the past year, Cisco has significantly ramped up its use of renewable energy with a focus on solar.  We’ve been sharing these activities in press releases, blog posts, videos and our annual CSR report, but we haven’t talked about why – and these reasons are deeper than just a commitment to the environment.

Here’s a short summary of some of our recent activities with renewable energy:

Signed an agreement with NRG Renew LLC, a wholly owned subsidiary of NRG Energy, Inc. (NYSE:NRG), to purchase the output of a 20 MW solar energy facility located in Blythe, California for our San Jose headquarters and surrounding Bay Area locations

Completed 4 on-site solar projects at our sites in Texas, Massachusetts, and Bangalore, India taking our total solar production capacity over 2 MW (see photos below)

Launched a solar discount program for employees and contractors, along with their friends and family, to simplify and reduce the cost of installing solar panels on their homes leading to over 50 installations totaling over 250 kW in less than 1 year

Joined the Corporate Renewable Energy Buyers’ Principles supporting the increase in accessibility to renewable energy along with many of our peers in the technology industry

Free standing solar PV array in the parking area of Cisco’s campus in Boxborough, Massachusetts

Solar PV array on top of Cisco’s data center in Allen, Texas

Why have we undertaken these activities?  Certainly, each of these actions are helping bring more renewable power on line, reducing greenhouse gas emissions and moving us toward a better environment.  But any company, in any industry, can make the same claim.  To be authentic, it has to hold a special significance related to why Cisco exists.

Renewable energy is a good investment.  Our Cisco team has been evaluating renewable energy projects of all types for the past decade, but in the past few years we have seen the offerings cross a threshold where they stand on their own as solid and reasonable investments.  Technology cost has fallen, installation costs are being optimized, and reliability has been improved to the point where in many global markets renewable power has reached grid parity.  Considering the potential of renewable energy to eliminate fuel price risk, selecting renewable energy in these markets is the best financial decision, environmental benefits aside.

Renewable energy is a key enabler of the Internet of Everything.  To be able to have more people and things connected and to be able to share, analyze and create value from those connections will take energy.  We need to improve the efficiency of the equipment, the data centers, and the electric grid.  Even with those improvements, there will still be demand for electricity, and potentially even more demand than we see today if the Jevons Paradox holds true.  Therefore, we can only move forward with an electrical system that embraces and integrates significantly more renewable energy.

Options and choice will increase the value of the utilities industry.  Consumers are asking more from their utility providers than ever before.  Electrical systems were initially built for access to electricity, for example with projects like the Rural Electrification Act.  Now we are also asking for increased reliability and lower carbon emissions from our utility companies, and within a regulated structure that makes it difficult for them to balance short-term profitability with long-term investments.  Cisco strives to work with other large consumers of energy, utilities, governments, and regulatory agencies to help achieve this transformation quickly but effectively.   By finding innovative ways to enable more renewable energy, and the ability for consumers to choose renewable over traditional power sources, the value of each electron on the grid increases as we monetize carbon and reliability.

What’s next?  We’ll continue to look to strategically expand our use of renewable energy, and be a driving force to help utility market transformation supporting other consumers to do the same.

Please read more about our commitment to environmental sustainability at csr.cisco.com.