Wal-Mart’s low cost philosophy often draws ire. The company’s singular focus on the bottom line drives low employee wages and aggressive business practices to push out small, mom-n-pop competitors. Yet, this philosophy is now also bringing praise.
Thanks to its low-cost mentality, Wal-Mart has emerged as a renewable energy leader. With 89 megawatts of rooftop solar installed across 215 locations nationwide, Wal-Mart sports twice as much solar capacity as any other American retailer and more than 38 U.S. states.
Make no mistake. Wal-Mart’s decision to go solar is not about climate change or spurring the green economy. It’s about economics. But that offers an important lesson for the rest of the country.
Solar installations save Wal-Mart money, which aligns perfectly with the global chain’s low cost philosophy. Using power-purchase agreements (PPAs), a solar developer installs, owns and maintains the system. Wal-Mart, putting no upfront capital down, simply agrees to buy the energy produced for a set duration that can stretch for a decade or longer.
The PPAs enable Wal-Mart to buy energy at or below the utility price over the life of the agreement. This provides price certainly on at least a portion of the electric bill and protects the company from the volatile price of fossil fuels.
Like Wal-Mart, a number of forward-thinking cities across the country are also realizing that local renewables are an affordable option. Los Angeles, Fort Collins, Sacramento and Gainesville are all generating clean energy in underused spaces – including rooftops, landfills, and parking lots. And they are doing so by offering renewable energy developers fair, guaranteed contracts and making it easy to connect projects to the grid.
By deploying more local renewables, regulators and utilities can help secure affordable electricity rates for consumers. To help accelerate this transition towards local renewables across the country, the Clean Coalition created the CLEAN Resource Hub. The Hub contains a wealth of information – including model policies, program design guides, and global best practices – to help policymakers, utilities, and advocates enact clean local energy programs in their communities.
With smart policies in place, every state can unleash the tremendous potential to bring cost-effective, local renewable energy online. The argument for renewables is no longer simply saving the environment; it’s about smart investments. Just ask Wal-Mart.