Honda has completed two virtual power purchase agreements (VPPAs) for renewable power to be produced in Texas and Oklahoma. These new agreements will help the company offset carbon from the energy it consumes at its manufacturing facilities.

In 2020, Honda will purchase 530,000 Mwh per year from a wind farm in Oklahoma and then, in the fall of 2021, Honda will add 482,000 Mwh per year from a solar power facility in Texas. Once the Texas deal is completed, Honda will be purchasing 320 Mw of renewable energy, which it will then redistribute to local markets to offset its in-house, non-renewable energy consumption.

"These combined VPPAs will help Honda meet its CO2 reduction goals by adding clean renewable electricity and by de-carbonizing the electricity grid," said Ryan Harty, manager, Connected and Environmental Business Development, American Honda.

"We hope the addition of a ‘collar' to the Boiling Springs project will encourage other companies to consider VPPAs as a method to secure renewable power and reduce climate-altering carbon emissions."

"A virtual power purchase agreement is a way for Honda to purchase renewable energy in locations where it is unable to purchase renewable from the local electric utility," Honda explained. 

With these new agreements, Honda will be purchasing 80% of its energy from renewable sources. Currently, that number sits at 21%. 

In other words, these purchases offset the company's existing use of non-renewable energy in markets where it has no alternative. Honda's operations take place predominantly in Ohio, Indiana and Alabama. These markets do not have sufficient renewable energy available at the grid level for the company to meet its sustainability goal.