Saturday, May 25, 2013
Sara Parker, Staff Writer
June 29, 2007
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10 Comments
BJ's Wholesale, Estee Lauder, Kohls, Target, Tiffany & Co., Wal-Mart. From "big box" discount giants to high-end jewelry retailers, solar energy has become big business in 2007. The most recent retail-outfitter to become part of this trend is Macy's, which announced earlier this month it will install solar power systems on 26 stores throughout California.
The trend is welcomed news for U.S. solar manufacturers like SunPower Corp., a Silicon Valley-based manufacturer of high-efficiency solar cells, solar panels and solar systems. The company's subsidiary, PowerLight, is under contract to install photovoltaic systems atop the 26 Macy's stores—as well as systems totaling 4.6 megawatts on seven Wal-Mart stores in California.
Building on the momentum of these contracts, SunPower recently announced that the largest investment bank in the U.S., Morgan Stanley has agreed to own—and finance—the solar PV systems that the company is planning to deploy on the Wal-Mart facilities.
The financing agreement was secured under the SunPower Access program, which allows customers to purchase solar-generated electricity from a SunPower financing partner as an alternative to outright purchase of the solar power systems themselves.
"Leading companies like Wal-Mart are turning to solar power because it makes good business sense and supports their environmental initiatives," said Tom Werner, chief executive officer of SunPower. "Our SunPower Access program makes going solar even simpler and more cost effective for customers who prefer the option of a power purchase agreement."
SunPower arranges the solar power system's financing and sells the system to the SunPower financing partner, in addition to designing, deploying and maintaining the system to the customer's requirements. The customer pays the financing partner for the solar electricity generated over a long-term power purchase agreement.
At the end of the term specified under the agreement, the customer typically has the option to renew the agreement, transfer the equipment to a new site, or purchase the system outright from the financing partner.
Energy Efficiency Joins the Mix
It's not just renewable energy however that has corporations seeing green in terms of dollar savings and environmental benefits. Energy efficiency upgrades are becoming increasingly popular with retailers as they move toward green friendly business operations.
Along with the PV systems, PowerLight is assisting Macy's with energy efficiency upgrades at the 26 stores, including high-efficiency lighting and HVAC systems and energy management systems. According to the company, combining solar power with efficiency will allow Macy's to achieve an estimated 40% reduction in utility-provided energy, almost doubling the impact of the solar power alone.
"By combining energy efficiency with solar power, Macy's is taking the extra step to cut our peak load demand," said Macy's, Inc. Vice-Chair Tom Cole.
Tiffany & Co., with its trademark blue box and pricey diamonds, is already reaping the benefits of solar and energy efficiency with the dedication of one of the East Coast's largest commercial solar projects earlier this year. Tiffany's has deployed 1.3 megawatts of solar energy at the company's retail distribution centers in Whippany (680 kilowatts) and Parsippany (656 kilowatts), New Jersey.
Comprised of 6,394 solar panels and covering 104,000 square feet, Tiffany's new solar arrays will supply on average approximately 30 percent of Tiffany's distribution centers' electrical load at peak demand times. Additionally, lighting upgrades that reduce electrical use and improve lighting quality will help achieve an overall estimated annual project value of more than $500,000 in savings.
Even big business thinks going green is a good idea, why cant we get the government to move on it.
Make a green statement in the next elections!!!
John,
The price of PV panels are about plummet and be more competitive. I believe you are right, but the Solar market has been making that claim since the 1970s. One day they might be right.
If you are right, then putting in a solar system right now is foolish and a waste of money. You can get more PV for less in just a couple of years - so you should wait. Being one of the tax payers subsidizing this mess, I am in favor of waiting until the panels are competitive. Don't buy them the year or two before they are competitive.
IN REGARD TO RYAN, I believe your solar buz quote is for uninstalled panels from the factory without shipping and installation. I was quoting Solar Buzz for installed panels and related equipment at the END of the transaction when you flip the switch.
As such, the figures are not in conflict. Ryan even reinforces the point that you cann't even buy the panels for less than $.21 per kwh without shipping and installation..
If we just builts some coal fired generators, power is $.08 per kwh. Wind comes in the cheap priced in the teens.per kwh.
Ryan, while I agree that Jim's comments are off the mark, it should be noted that solar installations are also depreciating assets. Just compare units made today with ones made 10 years ago.
As for this article, one of the key points is that high energy costs are now making investments in efficiency comparable to other capital projects. In the past the ROI for efficiency upgrades could not compete with other business investments and would be denied.
On the other hand, investments in solar projects by these companies is more PR than ROI. Yet, the end result is the same.
The exchange above shows the wide and different perspectives about energy and it's true costs. Both the cost per kwh and the Peak Demand reduction benefits are important. While the sun doesn't shines as much in New Jersey as in California, it sure does shine during the Peak Demand times making this energy worh quite alot more at the right time! The roof tops of these stores offer valuable realestate and the conversion process of PV is improving everyday. I would also suggest that bringing in natural light is a better investment in renewable energy but it unfortunately can't run the electrocic cash registers. The energy not used for lighting can now be used for those applicatins that need it! Natural light can make everything in the store look better generating more sales which will ultimately also be beneficial! THat's real progress and may help balance the environmental detriments of that mass produced cheap khw's noted above.
Other methods of electricity production cause environmental and health damage which costs large amounts of capital to mitigate or heal.
These large corporations can't be accused of not doing their homework. I'm sure they did the math. The PR value is hard to calculate but definitely makes them look like responsible stewards of the environment that intelligent, concerned customers will support. That's why Whole Foods Market became a multi-billion dollar business, much to the surprise of everyone.
It just shows how well capitalism works. These businesses will invest in solar and pay $.30 to $.60 per kwh (without direct subsidies SOLAR BUZZ 2006 year end report) for a product that should cost $.12 to $.18 per kwh.
If governmetn screws up the electrical grid enough, forces rationing, third world country style blackouts/brown outs, and refuse to build new generating plants that could make power at $.12 to$.18 per kwh , then the businssess will invest in solar so as to not be forced into the 3rd world economics.
This is not progress. It is a hidden tax on everybody in the country so people can feel good about themselves. Over paying for a product is simply dumb. If you don't believe me, go by a new car off the lot and pay $40,000 for a $20,000 car. Would any of your fried say you were smart? Then why are you doing it with electricty?
Love it!.
1) Great business model (also used by Sun Edison) whereby a business owner signs a long term purchase agreement to buy solar power generated (a. lowers investment risk for installer, and b. locks in fixed energy price for the solar power for Macys) and the experts design, install, maintain, and finance and own the PV system.
2) Macys is investing in energy efficiency (probably much better ROI than solar) along with the solar commitment.
3) Contributes to lower carbon footprint, intelligent energy utilization, and leads by example. It may be small relative to their total energy consumption, but I believe is part of the front end of the wave leading to a greener tomorrow.
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July 10, 2007
It's and excellent business model, and an excellent opportunity. For decades, PV has been a cottage industry, with strong emphasis on "cottage". SunEdison's pioneering model, now being replicated nationwide, is creating huge demand for PV, which will lower unit costs while simultaneously spurring technical advancements.
It's not limited to big box stores. State and local governments can realize the same price advantages by installing large-scale systems on schools and other municipal buildings. There is huge interest. While they cannot capture the tax incentives, this model allows them, and society in general, to become more familiar with, and comfortable with PV. And, after the original Power Purchase Agreement expires, the customer can buy the system at a substantial discount. Everybody wins.
The model works in states with generous incentives. Steering the business toward state and municipal entities delivers more bang for the taxpayers' bucks, in contrast to underwriting installations on retailers, with benefits to corporations and stockholders oftentimes headquartered in other states.