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Why Target and Amazon like onsite solar power

Now large companies are adding batteries, too.

Target, Amazon, Apple and other corporations are installing more solar panels onsite than ever to save money on their power bills and meet their sustainability goals.

Large U.S. corporations installed 326 megawatts of solar panels in 2017, up 2 percent from 2016, according to the Solar Energy Industries Association.

Target completed more than 43 megawatts of solar-panel installations last year, by far the most that any other company installed in 2017. The giant retailer has panels installed at 425 locations and aims to install panels at 75 more, to reach its goal of generating solar power at 500 buildings by 2020.

Target stores that have panels use the power they generate for between 15 percent and 30 percent of the electricity the stores consume, said Target spokesman Lee Henderson.

"It saves us money, it saves us energy and it does good by the local communities," he said. "We’re really focused on the planet and wanting to do things today that will ensure that we’re around tomorrow, for the business and for the planet."

The Minneapolis-based company also has installed electric storage batteries, along with solar panels, at six of its seven stores in Hawaii: in Honolulu; Kailua; Kahului; Kapolei; Hilo; and Kailua Kona.

Amazon, which ranked third for 2017 corporate solar installations, added 17.5 megawatts of on-site solar in 2017, toward its goal to install at least 50 solar systems on the rooftops of the company’s fulfillment and sortation centers by 2020.

Power generation from U.S. non-utility small-scale solar installations, as a group, jumped more than 30 percent this year through February, to more than 3,400 gigawatt-hours, compared to a year earlier, according to the U.S. Department of Energy.

More companies are installing batteries and panels together, particularly in California and Hawaii, as a way to save on their power bills and respond to local regulations.

"Storage has become a necessity in Hawaii," said Nam Nguyen, executive vice president of commercial solar at SunPower, which installed a 910-kilowatt solar system and a 250-kilowatt pack of batteries at Target’s store in Kona, on Hawaii’s Big Island, among other projects.

During hours of the day when the panels are producing more power than the property owner can use, the power is used to charge up the batteries. Later in the afternoon, when the sun goes down, the power stored in the batteries can be used to power the building, which means using less utility power and reducing the impact of high electricity prices and demand fees, Nguyen said.

Commercial utility customers in Hawaii pay 29 cents a kilowatt-hour for power, on average, according to the Energy Department. That compares to the U.S. average of less than 11 cents a kilowatt-hour.

In Hawaii, state rules prohibit many new rooftop solar generators from sending power to the local utility grid. Instead, new residential and commercial solar projects must "self-supply," or use the electricity on-site that their panels generate. 

In California, new utility time-of-use rates and rising demand fees that kick in during mid-afternoon and early evening hours provide an incentive for enterprising businesses to find a way to cut their use of utility power from the grid during those times.

At the same time, solar providers increasingly offer financing to commercial customers to install solar-plus-storage systems. Rather than having to pay upfront for a solar project that may seem risky to own, a commercial property owner can sign a contract to make monthly payments to the solar and storage provider that are less than what they were paying their utility before the system was installed.

More than half of the commercial solar-panel and solar-plus-storage systems installed in 2017 were financed and owned by third parties, while the rest were owned by the property owners, according to an April report by GTM Research.

The price of a commercial solar system was about $1.50 a watt, or $150,000 for a 100-kilowatt installation, on average, as of the end of 2017, slightly below the average price a year earlier, according to a March report by SEIA and GTM Research.

U.S. developers installed more than 2,100 megawatts of commercial and other non-residential solar projects in 2017, up 28 percent from the previous year, according to the report.

Going forward, new solar installations are widely expected to grow at a much slower pace than in previous years, due to tariffs that President Donald Trump imposed in January on imported solar panels and cells, the devices inside the panels that convert sunlight into electricity. The tariffs start at 30 percent this year, and decline by 5 percent a year, to 15 percent in 2021.

More than 130 companies have pledged to go 100 percent renewable, as part of their sustainability goals, according to RE100, and those companies widely are expected to continue to buy solar and other renewable power, regardless of market changes.

Apple, for example, installed 17 megawatts of solar panels on the roof of its new campus in Cupertino, California, earning the company a spot in the top five corporate solar panel installations last year.

The tech giant has reached its 100 percent renewable energy goal of buying enough renewable energy each year, through power purchase agreements and other means, to match the amount of electricity that its data centers, offices and other operations use. 

Apple has said it plans to continue buying renewables, as it expands, and is encouraging its suppliers to do the same.

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