For companies with large and geographically diverse real estate holdings, a properly executed Solar Portfolio Assessment provides a comprehensive analysis of the project-level solar feasibility across each individual facility. When solar project economics are favorable, companies can capitalize in several different ways, such as entering into long-term low-cost solar electricity purchase agreements, or by owning solar systems directly and earning attractive ROI.
For better or worse, the underlying economics of individual solar projects in the U.S. varies dramatically depending on the location of the potential project site. A major trap that we see a lot of companies fall into is the assumption that solar project economics can be readily compared across geographies. We meet a lot of business managers who tell us, “we looked at solar, and just couldn’t get it to pencil”. And while it is true that solar project economics are not yet economic in many states, they are quite compelling in other states. It is all but impossible to make broad generalizations about solar project economics, and this explains why a detailed and comprehensive portfolio analysis is so important when assessing solar across broad geographies.
A well-developed Solar Project Portfolio Assessment will incorporate the relevant site-specific information for all possible project location candidates, such as the facility size, available roof, parking and/or land areas, the onsite electricity load profile, and other relevant characteristics. Once the physical viability (or lack thereof) has been determined, the Assessment should then determine the potential economic viability.
The key variables that drive project economics include the local environmental conditions (i.e. solar resources and temperature ranges), the retail cost of electricity, the availability of state/local solar incentives, and the all-in cost of the proposed system installation. It is important to note that the economic viability is a dynamic analysis that frequently changes over time (and often quite quickly) due to factors such as new incentive programs being launched or dramatic swings in the underlying retail cost of electricity,
When done correctly, a Solar Project Portfolio Assessment allows large businesses to confidently make fact-based decisions concerning the economic feasibility of incorporating solar energy into their energy procurement plan.
Many of our corporate clients often ask whether or not their commercial rooftops are good physical candidates for solar photovoltaic projects. And while every situation is unique, there are several critical factors that should always be taken into consideration when assessing the feasibility of a rooftop solar project for a commercial facility.
Firstly, the structural integrity of the building itself and the reserve capacity of the roof must be adequate to handle the incremental loading associated with a solar photovoltaic project. Fortunately, today’s commercial solar systems are efficiently designed and typically add only ~3-5 pounds per square foot on a distributed load basis. Although most of our client’s buildings are readily able to safely install a rooftop solar system, it is absolutely imperative that a licensed structural PE perform all of the required analyses to ensure that this is the case prior to installation.
Another key consideration is the condition of the roof surface itself. One of the best attributes of solar systems is the long asset life (well in excess of 20 years) and the basic nature of the technology (entirely passive/solid state usually with no moving parts). As a consequence, you do not want to install solar on a roof that is in imminent need of replacement, and ideally, solar can be installed on new or almost new roof with significant remaining useful life. It is important to know the type of roof on your building (membrane, built-up, metal seam, etc.) as well as the age and pertinent warranty information.
Other rooftop solar considerations include shading issues (i.e. are there existing or planned structures that could cause portions of your roof to be shaded at certain times of the day), potential changes to rooftop unit configurations (i.e. are you adding or removing HVAC units), and special considerations depending on your facility’s locations (snow removal protocols or high-wind requirements are specific examples).
Overall, there are a number of key factors to consider when evaluating a rooftop solar system, and for businesses looking seriously at solar for their facilities, we recommend partnering with an experienced solar development firm early in the exploratory process.
More and more U.S. businesses are choosing to significantly increase their procurement of cost-effective renewable energy through the installation of onsite solar photovoltaic systems and the purchase of contracts to buy or invest in offsite renewable energy.
According to a recent report by the World Wildlife Fund (WWF), over 60% of the largest U.S. businesses have set public goals to increase their use of renewable energy. Large corporates are setting these public goals because using renewable energy is becoming a core element of their business & sustainability strategies, and just as importantly, renewable energy is increasingly a more cost-effective option from a procurement stand point. It is no longer just the environmentally-conscious companies that are looking to benefit from renewably-generated electricity.
In July 2014, twelve leading U.S. corporations joined forces and collectively created the Renewable Energy Buyers’ Principles in an effort to broaden their ability to procure renewable energy. The twelve founding companies are Bloomberg, Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Procter and Gamble, REI, Sprint, and Walmart. The Principles emerged from discussions between the participants convened by the WWF and the World Resources Institute.
According to the Principles’ authors, “we know renewable energy can already achieve cost parity, or better, compared with traditional energy” and furthermore “a significant part of the value to us from renewable energy is the ability to lock in energy price certainty and avoid fuel price volatility”.
This message resonates strongly here at EnterSolar, where our mission is to provide corporate clients with cost-effective solar electricity solutions.
Corporate Renewable Energy Buyers’ Principles: Increasing Access to Renewable Energy