SUPERMARKETS TAKE A BITE OUT OF HIGH ENERGY COSTS BY GOING SOLAR

Another great example of the business side of green:  solving a high operating expense by investing in clean energy.  Such an investment fixes their costs and puts them in control over their electricity expense.

That brings benefit to the community--a cleaner environment- and local jobs--and shoppers who will see more consistent pricing, perhaps even some lower costs.  The building becomes more valuable with lower operating costs.  And, we use natural sources for power and continue a massive shift away from fossil fuel.  

Given supermarkets high utility bills, more of them should jump on the renewables and move away from unsteady market conditions around traditional fuels.

SUPERMARKETS TAKE A BITE OUT OF HIGH ENERGY COSTS BY GOING SOLAR

By: Daryl Zeis

One of the biggest challenges facing supermarket proprietors is managing and controlling operational costs. Although labor makes up the biggest portion of those costs, energy use is the next largest expense item. According to an Xcel Energy report, energy accounts for 15% of a supermarket’s operating budget. Refrigeration and lighting consume the most electricity in supermarkets, with air and water heating, ventilation, and air conditioning also adding a significant amount to the monthly bill.

Increasingly, supermarkets and other large, energy-intensive retailers are turning to solar to cut their electricity costs as well as reduce their carbon footprint and strengthen their sustainability programs.

The “Solar Means Business 2014” report published by the Solar Energy Industries Association (SEIA) reveals a growing number of U.S. commercial operations adding solar systems to their property, plant and equipment assets. Listed among the leading solar adopters are some of the most recognizable names in the supermarket sector, including Whole Foods, Safeway, and Stop and Shop, as well as many big-box retailers with embedded grocery stores, such as Walmart, Target, and Costco. Other market chains that have cut their energy costs by going solar at retail outlets and logistics centers include Albertsons and Fresh and Easy. 

“This growing adoption of solar by the commercial sector is predominantly the result of consistent price declines,” the SEIA report notes. “The average price of a completed commercial photovoltaic (PV) project in Q2 2014 has dropped by 14 percent year over year and more than 45 percent since 2012. As solar prices continue to fall, more businesses in more states turn to solar to cut operating costs.” Since those statistics were issued, the average price of completed commercial PV installations in the United States has continued to decline each quarter.

In addition to the decreasing costs of PV equipment, innovations in financing—from solar power purchase agreements (solar PPAs) to solar leases to commercial solar PACE loans—provide an additional incentive for supermarkets to switch to solar. Full-service solar installation companies like REC Solar now offer these types of financing programs—in addition to accepting cash purchase plans--that help make it possible for supermarkets to take a bite out of their utility bills from day one of their PV system’s operational lifetime.

A sample supermarket case study reveals that if a 300-kilowatt (KW) rooftop solar system were installed on a market in Anytown, California, the PV power plant would generate approximately 500,000 kilowatt-hours (KWh) of clean electricity per year, offsetting about 80% of the store’s energy needs.

Keep in mind that this quote is an example. The ultimate costs and savings for a specific supermarket project will differ based on many factors, such as utility rates (including peak demand charges), hours of operation, shading, and type of financing. 

The entire process—from site evaluation to financial qualification to permitting to the actual construction of the PV array and interconnection to the grid—typically takes 4-6 months. As an experienced commercial solar installer, REC Solar has built more than 65 supermarket and grocery store PV systems in multiple states over the past decade.

The example above includes calculations based on the use of the 30% federal solar investment tax credit (ITC). As of this writing, the 30% ITC is set to step down to 10% for commercial solar installations in January 2017. While solar industry advocates continue to work with Congress to extend the program, passage is far from certain.

We addressed the ITC situation in a November 2014 blog post. As we explained, while the 30% credit for installing solar expires at the end of 2016, the tax code requires that the solar installation be fully operational by the deadline to qualify for the entire credit. Consequently, the window of opportunity to commence and complete ITC-qualified projects is quickly narrowing.

Whether you run a grocery store with multiple locations or are the proprietor of a local organic green grocer, now is the time to get a free solar evaluation from an experienced commercial solar installer.

By working with REC Solar, you’re able to compare flexible financing options to identify the best approach to meet your financial and sustainability goals with solar energy.