A Ray of Hope For the Retail Industry
The retail industry is facing challenging times. Business Insider reported that electronics, grocery stores, department stores and drug stores are among the sectors threatened by online retailers, such as Amazon. Businesses that were considered “too big to fail” such as Toys “R” Us, Payless and Radio Shack are among the 300 plus companies that filed for bankruptcy within the last year. This makes it more important than ever to find a differentiator along with new revenue streams. One of the ways that many businesses are setting themselves apart is with renewable energy initiatives, and even more specifically, solar.
The US has added more solar power than any other type of electricity in 2018. A recent SEIA report noted that non-residential solar, a category used when companies like AT&T and Nestle switch their electricity source to solar power, was the second largest area of growth. Fortune 500 companies have increased their demand for renewable energy, fulfilling sustainability goals and taking advantage of lower solar panel pricing, stronger financial incentives and ambitious state-level clean energy programs and mandates. This has trickled down, where now many smaller to medium-sized retailers are embracing solar energy.
GOING GREEN BRINGS IN THE GREEN (AND MAKES COMPETITORS GREEN WITH ENVY)
Retailers have a lot to gain by switching to solar energy. Solar is a solid investment, with a return on investment of as low as 3-5 years. A solar system can eliminate utility bills, generating hundreds of thousands (if not millions) of dollars in new revenue. In New Jersey, Solar Renewable Energy Credits allow companies to sell energy back to utilities, plus businesses are eligible for income tax credits, and a bonus on system depreciation. Other states, including New York, offer strong solar rebate programs.
Malls and large retailers, typically with significant roof space, have the opportunity to generate additional revenue by selling excess energy to the community via a community solar program. Malls are uniquely positioned to benefit even further, given the ability to strike owner/tenant deals, selling excess power to its retail tenants at a discount to market rates. Under all structures, going solar gives the property owner a competitive and promotable advantage to attract new tenants. In addition, retailers have a great brand story to tell the public, attracting positive press regarding their sustainability initiatives. The greening of the property is a newsworthy upgrade that sets a business apart from local and global competitors.
IS SOLAR MY SOLUTION?
Solar energy isn’t necessarily the best fit for every retailer. The ideal property will have a larger roof space, typically 15,000 square feet or more. If roof size is an issue, another option is to install the panels in a large, adjacent field or unused parking area. Installing a solar system is also a good time to replace HVAC units and even the entire roof.
GETTING THE GREEN LIGHT
If you’ve been considering switching, now is a great time to pull the trigger. Solar panel pricing is low, there are the aforementioned financial incentives and ambitious state-level clean energy programs and mandates, along with new laws for system depreciation.
Switching to solar panels can be time-consuming, so it’s best to assign a sustainability committee internally and regardless use a solar advisor that can help navigate the process from start to finish. Solar brokers are agnostic when it comes to vendors and help to avoid delays and anticipate installation issues.
We see a crack in the brick and mortar with a glimmer of light coming through. And that ray of light is solar!
SolarKal, a commercial solar advisor, was named the winner in New York State’s 76 West Clean Energy Competition. They help companies navigate the transition to solar, from the first site visit to the final installation.
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