Last week, Mark Gaspers, U.S. energy manager with IKEA North America, and Pete Kadens, president of SoCore Energy, joined AltaTerra Research for an online conference on how corporate solar power strategies are evolving beyond isolated or pilot installations and moving toward portfolio-wide deployments.
Pete and Mark are highly knowledgeable on the subject. At IKEA, Mark is responsible for the rollout of solar at 39 IKEA facilities in the U.S. by the end of this year — representing 89 percent of all IKEA facilities in the U.S. At SoCore Energy, Pete has assisted leading retailers and REITs, such as Walgreens, JC Penney and Kimco, in developing onsite solar electric systems across a portfolio of locations.
Deploying solar across a real estate portfolio requires solar developers and corporate customers to address a number of challenging questions. To provide insight into these challenges and how they are being addressed by IKEA and SoCore, I have summarized a few key points from the event below.
Solar incentives and energy costs, more than solar irradiance, are the primary drivers to determining the financial feasibility of solar at a given site. According to Pete, financial returns for a solar project in states such as Massachusetts or New Jersey can be more substantial than in sunny states such as Arizona or California, where production-based solar power incentives have dropped off.
When a corporation installs solar at scale, smaller projects of 100 kW or less are increasingly feasible from a financial standpoint. Walgreens, which has deployed more than 100 smaller systems, has proven that smaller solar arrays can be built in an economically viable way, if included in a portfolio of projects. The incentives for these smaller systems also can vary significantly from incentives for megawatt-plus installations. Incentives for smaller systems are becoming increasingly available from municipalities and utilities.
There are significant benefits to installing solar at a portfolio of sites rather than doing a one-off project. Corporations can realize higher savings from reduced transaction costs, increased buying power and lower financing costs. For instance, with the current oversupply of solar panels in the market, now is an excellent time for customers to bring larger projects to solar equipment providers to achieve greater savings. Building at scale also typically results in faster installations with improved logistics and less operational impact.
Developers and corporations can also work with states and utilities to receive customer incentives for multi-site installations. SoCore Energy in conjunction with Walgreens went to the state of Ohio to receive custom incentives for a 90-site solar deployment at Walgreens in Ohio.
According to Mark, system output ($/kWh), rather than overall system capacity ($/W), really drives ROI. Design details — array tilt, shading, module output, inverter efficiency and maintenance routines — all impact a systems output and ROI. As the example in Figure 1 shows, ROI for systems with the same capacity can vary dramatically based on the system’s output.
Figure 1. Example ROI of Solar Projects
(Courtesy of Mark Gasper, IKEA)
Unlike the majority of other corporations deploying solar, IKEA has chosen to purchase all of their 39 systems rather than signing PPAs. From IKEA’s perspective, if a PPA developer can make a profitable return on a system, IKEA can as well.
There have been a number of challenges IKEA has faced deploying solar at a wide range of locations. Determining the feasibility of individual systems required a significant amount of upfront planning, due diligence and feasibility studies (e.g. roof evaluation, structural capacity, etc.). From a physical standpoint, every store is different and requires its own due diligence process.
And managing incentives and interconnection requirements requires a significant amount of backend administration. Navigating the complexities of different utility and state incentive and interconnection procedures can also be confusing and time consuming.
Nonetheless, IKEA has addressed these challenges and chose qualified solar integrators to help them in the process. IKEA has found that purchasing the systems and implementing them on a portfolio-wide basis has offered improved returns, increased building property values, maximized available tax incentives and allowed them to control all aspects of the portfolio-wide project.
http://www.renewableenergyworld.com/rea/blog/post/2012/04/insights-into-how-corporations-are-deploying-solar-portfolio-wide
Pete and Mark are highly knowledgeable on the subject. At IKEA, Mark is responsible for the rollout of solar at 39 IKEA facilities in the U.S. by the end of this year — representing 89 percent of all IKEA facilities in the U.S. At SoCore Energy, Pete has assisted leading retailers and REITs, such as Walgreens, JC Penney and Kimco, in developing onsite solar electric systems across a portfolio of locations.
Deploying solar across a real estate portfolio requires solar developers and corporate customers to address a number of challenging questions. To provide insight into these challenges and how they are being addressed by IKEA and SoCore, I have summarized a few key points from the event below.
Solar incentives and energy costs, more than solar irradiance, are the primary drivers to determining the financial feasibility of solar at a given site. According to Pete, financial returns for a solar project in states such as Massachusetts or New Jersey can be more substantial than in sunny states such as Arizona or California, where production-based solar power incentives have dropped off.
When a corporation installs solar at scale, smaller projects of 100 kW or less are increasingly feasible from a financial standpoint. Walgreens, which has deployed more than 100 smaller systems, has proven that smaller solar arrays can be built in an economically viable way, if included in a portfolio of projects. The incentives for these smaller systems also can vary significantly from incentives for megawatt-plus installations. Incentives for smaller systems are becoming increasingly available from municipalities and utilities.
There are significant benefits to installing solar at a portfolio of sites rather than doing a one-off project. Corporations can realize higher savings from reduced transaction costs, increased buying power and lower financing costs. For instance, with the current oversupply of solar panels in the market, now is an excellent time for customers to bring larger projects to solar equipment providers to achieve greater savings. Building at scale also typically results in faster installations with improved logistics and less operational impact.
Developers and corporations can also work with states and utilities to receive customer incentives for multi-site installations. SoCore Energy in conjunction with Walgreens went to the state of Ohio to receive custom incentives for a 90-site solar deployment at Walgreens in Ohio.
According to Mark, system output ($/kWh), rather than overall system capacity ($/W), really drives ROI. Design details — array tilt, shading, module output, inverter efficiency and maintenance routines — all impact a systems output and ROI. As the example in Figure 1 shows, ROI for systems with the same capacity can vary dramatically based on the system’s output.
Figure 1. Example ROI of Solar Projects
(Courtesy of Mark Gasper, IKEA)
Unlike the majority of other corporations deploying solar, IKEA has chosen to purchase all of their 39 systems rather than signing PPAs. From IKEA’s perspective, if a PPA developer can make a profitable return on a system, IKEA can as well.
There have been a number of challenges IKEA has faced deploying solar at a wide range of locations. Determining the feasibility of individual systems required a significant amount of upfront planning, due diligence and feasibility studies (e.g. roof evaluation, structural capacity, etc.). From a physical standpoint, every store is different and requires its own due diligence process.
And managing incentives and interconnection requirements requires a significant amount of backend administration. Navigating the complexities of different utility and state incentive and interconnection procedures can also be confusing and time consuming.
Nonetheless, IKEA has addressed these challenges and chose qualified solar integrators to help them in the process. IKEA has found that purchasing the systems and implementing them on a portfolio-wide basis has offered improved returns, increased building property values, maximized available tax incentives and allowed them to control all aspects of the portfolio-wide project.
http://www.renewableenergyworld.com/rea/blog/post/2012/04/insights-into-how-corporations-are-deploying-solar-portfolio-wide
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