Free Solar Power for Staples

The Connecticut Clean Energy Fund (CCEF), Staples and SunEdison hosted a dedication ceremony on Jan. 16 to unveil the largest solar power installation in New England at Staples’ 300,000-square-foot retail distribution center in Killingly, Connecticut. The solar power installation, built at no capital cost to Staples, was made possible through the collaborative effort of CCEF, which provided a $1.7 million grant for the project, and SunEdison, which financed the remaining costs of the project and designed and installed the system.

Is this the way we want to see our solar projects financed?  Or is this type of financing necessary to enable expansion of the industry so it is more competitive with conventional power?  I certainly think that the end user should pay a share of the costs. I don't especially blame Staples for taking advantage of a business opportunity.

Comments

[Greg Woulf]

I like this way of financing solar for big companies.

I'd rather businesses would do it from a profit choice. I think it's tough to convince shareholders to spend profit this year to get slightly more profit in 10 years.

The cost pay back doesn't usually take into account the time value of money, or the risk.

I think any push forward for any renewable that will pay for itself is a step forward.

[aplantpathologist]

They are more than welcome to install a project at my house using this kind of financing. Sure they will lose money - but they'll make it up on volume!

[JJ]

Asking Staples to kick in some funds would mean aditional companies could take advantage of similar solar applications. More installations means less dependency on energy from "bad" places over there and a cleaner environment all around -- what gives with the 100% financing -- doesn't make sense!!??

[kevin]

Do they have to pay back the money from the grant lets say on a monthly bases
or do they get free electric ?

if it was a loan the money could go to the next guy and start something

[Sam Jaffe]

You've made a mistake on this one. Staples is offering free rooftop real estate in exchange for the p.r. The company that is taking on the risk--and enjoying the rewards--is Sun Edison. Their whole business plan is to put up big solar arrays and make money off the electricity produced over the long term. The $1.7 million sure helps, but once Sun Edison gets its groove as an installer and operator of solar panels, they won't need it.

By the way, $1.7 million is a lot of cash, but it surely took a lot more than that to cover 300,000 feet of rooftop with solar panels. That should be in the tens of millions of dollars of upfront capital costs.

[William]

They're only using 74,000 sq ft of the roof. Not sure what percentage of total roof area that is, but considering it's a 300,000 sq ft facility, as much as 25%.

I'd rather not have the government put any money into this, certainly not $1.7 million. Seems that Staples and SunEdison get enough out of this to front that $1.7 million.

[BCC]

It's a
433kW installation, so even at $10/W installed, that's around $4M. At about 10W/sq. ft., a 433kW system would need around 40k square feet. So the roof isn't exactly 100% covered. These numbers are rough but in the right ballpark.

[BCC]

Hmmm, I see the press release says 74k sq. ft.

[Jim from The Energy Blog]

Sam your right, I missed this statement in the press release:

“Through our relationship with solar services provider SunEdison, we’re able to purchase solar energy off our rooftop at a rate below or equal to the cost of electricity off the grid. This reduces our operating costs while freeing up more electricity during peak times for use by local homes and businesses.”

[JP Elverding - the Netherlands]

A Belgian company has put 8000 square meter (some 85.000 sq feet?) of solar panels on the roof of it's warehouse; in the summer the power generated should suffice for the cooling and freezing inside the building.
COLRUYT apperas to be quite green; they're also investing in windpower and operate a chain of bio-supermarkets. The link to their site (partly in english) can be found on my blog, an entry of today.

[Mark]

I don't see the big deal about the financing. Staples isn't getting any freebie. They don't own the power panels, they provided real estate for its location for the opportunity to buy the output at market rates or at a discount. Ranchers in Texas let the power company install wind generators in their fields and make a tidy sum in similar deals. The $1.7M grant gives the industry a kickstart in New England. I'm not a big fan of industrial welfare but this isn't a big pile of pork compared to a lot of other choices the money could go to.

[James]

Kevin is right about the way this works and the benefit to SunEdison, though he left out that SunEdison probably also got a long-term power purchase agreement from Staples, greatly reducing the risk of the project. If they can do a bunch of these with good credits (strong companies), they can build a portfolio with even lower overall risk and sell interests in it. Great idea. Cheers to SunEdison.

[disdaniel]

The only one that loses in this deal is the traditional power utility (in that it is losing some volume from a major customer.

If this becomes the norm for the solar industry, in 50 years power utilities will have snoozed themselves out of a rock solid business.