Renewable energy provider Pivot Energy announced a five-year agreement with Microsoft to develop up to 500 megawatts (MWac) of community-scale solar energy projects across the U.S.

Through the agreement, Microsoft will match customer electricity usage with new renewable electricity generation, supporting its efforts to reduce Scope 3 emissions.

Growing Scope 3 emissions have emerged as a major challenge to Microsoft’s climate goals. While Microsoft has set a goal to reduce Scope 3 emissions by more than half by 2030 compared to 2020, the company recently reported that Scope 3 emissions in 2023 were actually more than 30% higher than in 2020, driven largely by significant growth in data centers to meet increasing demand for AI computing power. The company said earlier this year that it was launching a company-wide initiative to identify and develop measures to address its Scope 3 emissions challenges.

Under the new agreement, Microsoft will purchase renewable energy credits (REC) over a 20-year term from Pivot, which will develop approximately 150 U.S. solar projects in roughly 100 communities across 20 states, including Colorado, Maryland, Illinois, Delaware, Pennsylvania, and Ohio. The first projects are expected to come online before the end of 2024.

The agreement marks Microsoft’s first major distributed generation portfolio, and forms the latest in a series of clean energy deals for Microsoft, including a 5-year global renewable energy framework agreement with Brookfield, for the development of more than 10.5 GW of new clean energy capacity in the U.S. and Europe, and more that 800 MA of PPAs in Texas with providers Leeward Renewable Energy, and RWE, earlier this year.

Adrian Anderson, GM, Renewables, Carbon Free Energy, CDR, Microsoft, said:

“We believe the clean energy transition can and should benefit communities across the United States that have been historically excluded from economic opportunity. Through our work with Pivot Energy and with its commitments to driving community impact, this collaboration helps to build more inclusive, local economic growth across 100 communities while addressing the sustainability needs and opportunities within those communities.”

The agreement represents Pivot’s largest REC agreement and most significant community impact collaboration. It includes four initiatives including increasing diversity of subcontractors; partnering with workforce development organizations to train and hire diverse local talent; partnering with the Sustain Our Future Foundation to invest in equitable community initiatives; and increasing the energy bill savings of the community solar projects directed to low-income subscribers.

Tom Hunt, CEO of Pivot Energy, said:

“An economy fueled by clean, distributed energy can do more than provide power at low cost; it drives growth and success in communities across the nation. This collaboration between Pivot Energy and Microsoft exemplifies the power and impact that distributed generation can have.”