Why Solar? > Which Companies Get Solar--and Why

General Motors. BJ’s Wholesale. The Gap. FedEx. Costco. Staples. Frito Lay. Macy’s. Toyota Motor Sales USA. Target. Khol’s. Whole Foods. Wal-Mart. Kettle Foods.

Q: What do these companies have in common?
A: They’ve all invested in solar power in recent years.

And they’re not alone: a countless number of small and mid-size businesses have gone solar, too. This growing commercial demand may in part explain why the solar sector has seen such phenomenal growth in recent years. In 2007, the global market for photovoltaics (PV) grew over 60%, this on top of 20% growth in 2006. Investors, too, see bright prospects for PV manufacturers: the Cleantech Group’s Cleantech Index saw a gain of 42.9% in 2007. The S&P returned a comparably sluggish 5.5%.

Given these sun-shiny trends, it may be appropriate to ask if all this corporate interest in installing PV is well founded, or whether Wal-Mart and Macy’s have gone completely mad. As it turns out, the management at these companies do actually know what they’re doing. More and more companies are getting solar because it makes both financial and strategic sense.

We present here four ways solar energy can help add real value to your bottom line: (1) Peak shaving; (2) Price-hedging and price “lock-in;” (3) Getting ahead of the curve; and (4) Corporate Social Responsibility.

Peak Shaving

Large buildings draw a lot of power. Beyond the amount your company pays for the energy it consumes (measured in kilowatt-hours), it may also be subject to something called a “demand charge.” This is because electricity is more expensive during hours of peak demand. So if your building uses a lot of power during this time—typically during mid-day—you’re probably being dinged by a stiff surcharge. Incredibly, this amount can sometimes be higher than the charge for the actual energy consumed!

Luckily, PV systems typically generate more power during the times of day when demand is the highest. What this means is that solar panels can effectively reduce the amount of electricity you purchase from the utility precisely when they are charging the most for it. In industry speak this is called “peak shaving,” or reducing a building’s load during high-demand hours.

In 2005, FedEx installed 904-kW worth of Sharp solar panels atop their hub at Oakland International Airport. The system has consistently eliminated about 80 percent of the facility’s peak load demand, and cut electricity costs by 30 percent. The company has since installed a 282-kW system at their Whittier, California freight facility, and is nearing completion of a 269-kW system in Fontana, California. “It makes good sense over the long term because of the changing energy prices in California,” says Mitch Jackson, managing director of Corporate and International Environmental Programs. For more details on the project, check out the case study (PDF).

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