LOS ANGELES: For Prologis Inc, the global industrial real estate investment trust (REIT), space for storing goods is a key asset.
But the huge, flat roofs atop the company’s warehouses are another significant asset, argued chief energy and sustainability officer Susan Uthayakumar.
With a long-term plan to plaster roofs with solar panels, Prologis views on-site renewable power – and the reliable costs and resiliency it can provide – as a selling point for tenants. “We do this to future-proof our buildings,” Uthayakumar said.
A corporate push in the United States to expand rooftop solar highlights the evolving challenges of adding renewable power amid shifts in technology, regulations and land use.
Corporations see upside in putting renewables on-site, although commercial and industrial solar is often trickier financially than residential rooftop solar.
If they’re buying the systems outright, it also has higher upfront costs than procuring power from solar farms.
Environmental advocates and many in the renewables industry argue that the challenge of getting rural renewable projects permitted and connected to the grid, the growth of wind-and solar-focused NIMBYism and the sheer amount of space needed to meet clean energy targets with wind and solar farms make solar on top of industrial and commercial buildings all the more essential to build out.
Big-box stores and warehouses are often located in industrial or commercial zones far from forests or farmland.
Roofs are a resource that’s only begun to be tapped: On-site commercial solar currently supplies less than 1% of corporate power. “If we’re going to really make use of the amount of sunshine that falls on our cities, while also protecting open space goals, it’s critical that we unlock the commercial sector,” said Bernadette Del Chiaro, executive director of the California Solar & Storage Association, the state’s largest clean energy trade and lobbying group.
Governments and businesses need both rooftop and utility-scale solar projects to hit renewable energy targets, says Mark Jacobson, a professor of civil and environmental engineering at Stanford University.
Boosting on-site energy generation reduces the amount of power lost through transmission (about 5% of what’s transmitted), builds a more resilient grid and preserves open land.
California alone would need roughly 1,400 additional square miles of solar panels to power the state by the sun, according to Jacobson.
The advocacy group Environment America is pushing Walmart Inc to add solar panels to every store and has even made this campaign one of its main efforts in 2023.
Currently, the retail giant is third in corporate rooftop installations behind Target Corp and Prologis. But if the roofs above every US Walmart store – a combined area the size of El Paso, Texas – were fully outfitted for solar, half of these buildings’ energy needs would be met.
“It’s clear that if Walmart made this move, it could change the market,” said Johanna Neumann, senior director of renewable energy for Environment America and director of the Walmart campaign.
In addition to cutting the firm’s energy costs, inspiring other retailers to invest in their rooftops and adding significant renewable energy capacity, such a move could create a network of local resilience hubs and electric vehicle charging stations, she said.
Corporations that have already made sizable rooftop investments see value in stable energy costs amid market fluctuations and in keeping the power on when the grid is out.
Prologis, which now has 405 megawatts of solar generation capacity, plans to get to one gigawatt – akin to adding a nuclear plant – by 2025 and could eventually hit 10 gigawatts with its 1.2 billion sq ft of rooftop.
But 55% of US corporate solar power came from off-site facilities as of last year, according to the Solar Energy Industries Association (SEIA), and the majority of new solar installations in recent years by firms such as Amazon.com Inc and Meta Platforms Inc have been off site.
There are many reasons corporations haven’t fully seized the on-site opportunity, which Environment America estimates could amount to 7.2 billion sq ft of panels on retail rooftops alone.
Often, companies believe the return on investment takes too long, and many do not directly own all of their buildings or stores, meaning they have to sell commercial landlords on a big capital expenditure investment.
When asked about the Environment America campaign, Walmart pointed to its record of renewable investment, which includes on-site projects: 46% of the company’s global electricity needs were supplied by renewable energy as of 2021, nearly halfway to its goal of 100% by 2035. — Bloomberg
