5 insights about the state of corporate solar
The main players remain largely unchanged, but a new wave of renewables buyers is stepping up.
Last month, the Solar Energy Industries Association (SEIA) published its fifth annual "Solar Means Business" report, fittingly released at SEIA’s "Solar Goes Corporate – West" event in San Francisco.
The release came one day after Renewable Energy Markets 2016, at which the U.S. Environmental Protection Agency announced the latest Green Power Leadership Award winners. The latest SEIA report covers the period from the fourth quarter of 2015 through the third quarter of 2016. While it only includes the largest adopters of commercial solar PV in the United States — about 16 percent of non-residential, non-utility-scale solar, according to the report’s authors — it offers a number of valuable insights nonetheless. Here are five key takeaways.
1: Target takes the top spot
Walmart has earned the No. 1 ranking since the report’s inception — but not this year, by a very slim margin.
That honor goes to rival retailer Target, which has added nearly 70 megawatts (MW) of solar so far this year (through the reporting period), leapfrogging Prologis and Walmart to take the lead position with 147.5 MW of installed on-site solar photovoltaic (PV) capacity.
This addition brings Target to 300 facilities that are using solar PV in some fashion, which puts the company well on the way toward meeting its goal of 500 buildings with rooftop solar PV by 2020. Target estimates that its stores with solar PV installations get 15 to 30 percent of their electricity from the sun.
2: The top 8 remain unchanged
Although Target vaulted to the lead position, the top eight companies for installed solar PV capacity otherwise have remained unchanged for the past two years: Target; Walmart; Prologis; Apple; Costco; Kohl’s; IKEA; and Macy’s (in that order, apart from Target’s improvement). It’s no surprise that these market leaders remain, well, leaders.
And there are some impressive capacity additions among the lot, aside from Target’s 70 MW.
From 2015 to 2016, Macy’s nearly doubled its installed on-site solar capacity, from 21 MW to 39 MW; Apple added more than 50 percent to its on-site capacity, increasing from 61 MW to 94 MW. And Prologis added 10 MW to reach 108 MW, making it one of only three companies — alongside Target and Walmart — to surpass 100 MW of installed on-site solar capacity.
3: Leading companies show possible signs of slowing
Despite such positive news about the growth of on-site commercial solar, there are also signs that the leaders are perhaps beginning to slow down.
Although the collective installed capacity of the corporations profiled in the "Solar Means Business" report has grown from 300 MW in 2012 to more than 1 gigawatt (GW) in 2016, their annual capacity additions generally have shown a downward trend since peaking in 2011.
This is consistent with recent sentiment at industry conferences, noting that the first movers are starting to satisfy their first major wave of renewable energy procurement appetite, leaving it to the next and potentially much more numerous wave of corporations to sustain the next phase of market growth. There are signs that this is, in fact, happening.
Although the annual capacity additions of companies considered in the "Solar Means Business" report generally have declined since 2011, overall non-residential, non-utility solar PV annual capacity additions have remained remarkably steady at more than 1 GW annually for the four-year period from 2012 to 2015, suggesting that other corporations are stepping in to pick up that slack. Furthermore, after those four flat years, forecasts suggest 2016 could be the market’s biggest year yet, with an estimated 1.3 GW to 1.4 GW installed.
4: Much low-hanging fruit remains
Even among the leaders, much low-hanging fruit for solar PV investment remains.
For example, although retailer IKEA boasts a whopping 90 percent of facilities with solar PV, other companies have just scratched their respective and proverbial surfaces. Consider that the report estimates that just 7 percent of Walmart’s more than 5,000 facilities and just 2 percent of Albertson’s 2,000-plus facilities have gone solar.
Undoubtedly, many variables influence whether any individual facility actually would go solar — the lease vs. own decision, rooftop ages and warranties, the state of local electricity markets and utility rates, etc. But it’s also clear that the U.S. solar market — including commercial on-site and corporate offtake from large-scale, off-site projects — remains poised for growth through 2021.
5: Off-site solar missing from the equation
By its own admission, the "Solar Means Business" report is "not a comprehensive look at corporate solar in the U.S."
That’s especially true in its omission of corporate procurement from large-scale, off-site solar. A June PwC report (PDF) noted that 80 percent of major corporations take a "portfolio" approach to renewable energy procurement that combines on-site and off-site solutions. In fact, at least three of the top eight companies from the SEIA's ranking — Walmart, Apple and IKEA — also have signed power purchase agreements (PPAs) for large-scale, off-site renewable energy.
Solar is increasingly figuring centrally in that mix: corporate procurement from large-scale, off-site solar has exploded onto the scene, going from virtually non-existent prior to 2014 to 887 MW across 2015 and 2016 YTD, according to staff at the Business Renewables Center.
For perspective, that represents more than 21 percent of a market previously dominated more or less exclusively by wind.
This essay first appeared on the blog managed by Coronal Energy, powered by Panasonic.