Retailers are showing increased interest in solar energy, with Wal-Mart Stores and Kohl’s Corp. among the latest to announce solar deployments. Chain Store Age executive editor Marianne Wilson spoke with Mark Culpepper, VP and chief spokes-person for SunEdison, Beltsville, Md., North America’s largest solar-energy services provider, about the benefits and challenges of solar-power installations.
Chain Store Age: What basic principles are involved in solar power?
Mark Culpepper: In very general terms, photons from a light source strike a material (a solar cell) which has specific material characteristics that allow it to convert those photons into electricity. The individual cells are combined into a solar module, also called a panel. The modules are, in turn, wired together to form a solar array. Multiple arrays are combined into a solar system, which uses a device called an inverter to convert that DC electricity into AC electricity for use in a home or business.
CSA: What type of equipment is required?
Culpepper: The installation involves solar modules; an inverter, which converts DC to AC; and what is known as BoS or Balance of System components. These are generally other electrical equipment such as disconnect switches, fuses, panel boxes, etc. The fundamental technology is well-understood, fairly simple and very predictable in its performance. The implementation is complex.
CSA: How does solar power benefit the environment?
Culpepper: Solar is completely silent, generates no emissions and is a net positive energy source—meaning that the lifetime energy output is significantly larger than the energy used to manufacture the panels.
CSA: Is it expensive to implement? Culpepper: SunEdison uses a solar-energy service-provider model. It requires no up-front expenditures for a solar-power plant. The service provider finances, installs, owns, operates and maintains the power plant. The customer pays only for the energy generated by the power plant. As with their existing utility, if for some reason the system goes offline, the customer pays nothing for that time period.
CSA: What are the major challenges in going solar?
Culpepper: The obstacles for retailers looking to go solar via the solar-energy-services model include building lease arrangements—if the retailer owns its buildings, it makes the process easier. Lease arrangements can slow down the deployment process.
Another obstacle involves the age and condition of the rooftop. Rooftops over seven years in age can present challenges, as these systems typically last 20+ years. If the roof needs replacing sooner than the aging of the system, this presents a challenge.
Financial status and credit also can be challenges. Our model works with lending institutions to provision the system and the installation itself. The hosting customer where the array is located must be in good financial standing in order for this model to work. Finally, local permitting departments, many of which have never seen a solar array, are major inhibitors.
CSA: What types of facilities are most appropriate?
Culpepper: The ideal facility is a new building, located in a state that is solar-friendly, with 100,000 sq. ft. of roof space, a relatively new roof, a favorable orientation, and relatively heavy energy requirements that coincide with the peak summer months. Facilities less than 50,000 sq. ft. are less preferred, as the amount of deployable roof space for the solar system tends to be too small.
CSA: Where is solar power not recommended?
Culpepper: There are no technical reasons why solar cannot be adopted across all of North America. That said, some states have not yet adopted well-accepted standards for interconnection and net metering, preventing business from connecting to the grid while generating their own power on site. Additionally, many states do not have active incentive structures in place to encourage the adoption of solar. So while every facility is a potential energy generator, not every facility is legally enabled to do so.
CSA: SunEdison takes complete ownership of the solar installation. What does this entail?
Culpepper: Typically this entails a long-term contract with the customer to deliver electricity at, or below, their existing retail energy rates, with a fixed-price escalator for the contract lifespan. The benefits for the retail chain include: immediate savings, immediate ROI, long-term predictable pricing for a portion of their most expensive electricity and a complete service solution requiring no maintenance on the part of the retailer.