Walmart recently announced the completion of its 100th rooftop solar installation in California. The San Diego College Avenue store is now one of over 150 solar-powered Walmart properties across the country, totaling nearly 90 MW of installed capacity on Walmart rooftops. And that’s just the beginning; they are planning to have 1,000 retail solar installations by 2020, which is nearly one-quarter of all US Walmart stores.
Walmart is not alone in their pursuit of green energy. For example, Ikea has completed 26 solar projects with 13 more planned, and Apple is constructing a 20 mega-watt solar farm at one of its data centers. Is Walmart’s solar growth outpacing fellow retailers because of its size and market power, or do they know something that not all retailers do?
In addition to being an important milestone for US commercial solar, Walmart’s story contains important lessons for any company looking to approach their solar investments from a strategic perspective. After all, Walmart is (first and foremost!) a for-profit company. It’s scale is massive and accounts for over 11% of all retail sales in the United States – over $440 billion in sales in FY2012 alone. If it were a country, Walmart would have the 19th largest economy in the world.
With that type of scale, Walmart’s solar projects are no doubt a key element in reaching its overall sustainability goals, including company-wide environmental directives aimed at 100% renewable energy, zero waste, and a full sustainable product selection. In addition, they have also made aggressive improvements to fleet efficiency, implemented a sophisticated sustainability scoring system, and moved towards selling only Energy Star appliances in recent years.
However, assuming that Walmart’s adoption of sustainability measures is done at the expense of the bottom line does not give them enough credit. In fact, their solar projects make good business sense and generate revenue for the company. Case and point: Walmart’s director of energy, Marty Gilbert, speaks openly about the company’s policy of pursuing only solar projects that make economic sense at the store level.
And why not? The cost of solar is rapidly declining and has already reached grid parity in certain markets. The key is to identify the locations where good solar resources, adequate rooftop space, and strong local and state incentives combine to make it profitable.
Other retailers would be wise to take a page from Walmart’s playbook and develop a strategy to find opportunities where they can be both a good corporate citizen and a highly profitable retailer.