Wal-Mart's Solar Energy Vision

It's been a busy holiday season for a corps of professionals, courtesy of Wal-Mart, and I'm not talking about store greeters or Santas. The retail giant recently issued an RFP, or request for proposal, to install solar energy systems on its stores in five states -- the largest procurement of solar ever proposed. Bids are due on January 5, hence the end-of-year scrambling.

The confidential RFP document, which I recently reviewed, is part of the company's stated commitment "to reduce our overall greenhouse gas emissions by 20 percent over the next eight years" and to "design a store that will use 30% less energy and produce 30% fewer greenhouse gas emissions than our 2005 design within the next 3 years," according to the RFP. At a higher level, it marks a significant first step toward Wal-Mart CEO Lee Scott's publicly stated, long-term goal (Download-PDF): "To be supplied 100 percent by renewable energy."

The goals of this project, as stated in the RFP, are somewhat more modest:

• the establishment of a relationship "with one or more solar photovoltaic developers that facilitates the cost effective development of solar photovoltaic systems at a predetermined number" of Wal-Mart sites, and

• securing alternative sources of energy "at competitive prices and in a form that is replicable among multiple sites and multiple building formats."

The request for proposal -- which was sent to a small, select group of prospective developers, who are no doubt scurrying to prepare their proposals as you read this -- asks bidders to consider three options in considering how to power Wal-Mart by sunlight:

• a direct purchase by Wal-Mart of turnkey solar energy systems, along with a plan to maintain the systems;

• solar systems that are installed, owned, and operated by the supplier, which would then sell all of the system's electricity output to Wal-Mart; and

• an arrangement in which Wal-Mart would lease solar installations, own all of their electricity output, and have an option to purchase the systems if it desired.

Those three paths represent a pretty good overview of the options available these days to commercial and industrial purchasers of solar. The second and third options, in which the systems are developed and owned (at least initially) by a third party, help to overcome one of solar's major obstacles: its large, up-front capital expense. Since practically all of us -- companies and homeowners alike -- are accustomed to paying for electricity based on the amount we use on a monthly basis, we have little appetite to shell out thousands of dollars to suddenly own and maintain the power plants (in this case, solar panels) that generate that electricity. Companies are more willing to "go solar" if there's no large, up-front expenditure and their monthly energy costs don't change much, or even go down. In its RFP, Wal-Mart is asking solar companies to act like a small-scale utility, owning the equipment, but selling the electricity to Wal-Mart.

(By the way, such arrangements should by no means be limited to companies. Individual homeowners and renters should be able to purchase electricity generated by solar panels on their roofs, installed and owned by third parties, rather than having to buy and install pricey solar panels themselves. We want the power, not the power plants. As Amory Lovins has famously put it, "It's not kilowatt-hours that we want, it's hot showers and cold beer.")

Wal-Mart says it will begin installing solar on its stores in five U.S. states: California, Colorado, Connecticut, Hawaii, and New Jersey. The company anticipates that "that only a portion of the stores in each state will be physically and economically suitable for solar installations," according to the RFP. It calls for bids for projects to be carried out during 2007, but is asking bidders for "expansion or build-out plans, including projected prices and costs, over the next five years." The projects, says Wal-Mart, should "maximize available roof space and electric generation output" and create "maximum financial returns due to rebate, incentive, and tax impacts that may reduce or scale-back system sizing."

What's the impact of all this? Wal-Mart doesn't mention a specific purchase size, but my sources tell me that the company could put solar on as many as 340 stores in the next few years. Assuming that each store utilized about 300 kilowatts of solar panels (it could be as much as 500 kilowatts), we're talking roughly 100 megawatts of solar. To put that into perspective, the solar system currently being installed at Google headquarters in California -- the largest single corporate solar installation in history -- is 1.6 MW, about 1/60th the size.

Of course, it's unclear whether Wal-Mart will install solar in all of those locations. The company could look at the bidders' numbers and decide to install solar at only a handful of stores -- or none at all.

Assuming it moves forward with even a portion of its plans, Wal-Mart's move is significant, and historic. While a growing number of companies are staking their claim at being "carbon neutral" by purchasing power from developers of far-off wind farms or other large-scale installations, or have installed (often with much fanfare) solar panels on a single showcase facility, no one has yet made a long-term commitment to "alternative sources of energy at competitive prices and in a form that is replicable among multiple sites and multiple building formats," as Wal-Mart puts it.

As one insider told me: "Putting out the RFP alone has some level of significance. Going through with it will be epic. If they follow through, it will be profound and will have a long-lasting impact on the global solar industry. And probably on the mindset of retailers around the planet."

It's far from a done deal, and there are significant hurdles to overcome. Not the least of these will be to accommodate Wal-Mart's voracious appetite for renewables as well as its legendary cost-cutting pressure. The company's opportunity is to help bring the price of solar down to earth. The challenge will be to do it in a way that doesn't negatively exploit its suppliers, or those that toil for them.

Wal-Mart intends to notify the winner of the contract on February 28. I'm not a bidder, but I'll be watching anxiously nonetheless.

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Comments

[Hank]

Very cool stuff, thanks for the information. February suddenly seems quite distant...

[siddharth gupta]

Very cool info, I am planning to start a business in india on similar lines where I can sell this to the ever growing number of companies with a huge appetite for power. I have just started researching for the various products available.

[Tom Konrad]

You wrote: "Individual homeowners and renters should be able to purchase electricity generated by solar panels on their roofs." That model is starting to take shape. The first (hopefully of many) company to offer that service appeared about a month ago. See my blog entry: http://tomkonrad.wordpress.com/2006/12/13/102/

[tschirmer]

Seems like a lot of companies are trying to get on the clean energy train lately, maybe sometimes its just done for marketing purposes but in the sum of it all you can see a movement taking shape that will make the difference someday. Also BMW is now working on a clean energy project, just yesterday I stumbled over a site called http://www.clubofpioneers.com where such topics are discussed, so things keep moving forward which is never a bad thing.

[Ken McMurdo]

Joel:
Saw your article on Walmarts intention to use solar energy for their stores commencing with some stores in NJ.
That being said, I represent a company that manufactures a "Cordless Solar Powered Trash Compactor" , something that could be very useful in parking lots or near an entrance or exit. Maybe these units could be sort of a kickoff to the energy saving process. I am the director of sales for Seahorse power in New Jersey and Pa.
Please go to our website for some more detail about the product.
www.seahorsepower.com.
Hopefully there may be some interest and possibly persue a walmart or two in NJ to pilot.
Hope to hear from you--
Regards
Ken McMurdo---Dir Sales----nj/pa

[alpha24seven]

RFP? They are just going through the motions so as to look keep the legal department off the hook.

Here is the company that will get the contracts. It was floating in the RE wind 3 months ago.

Check the connection.

http://www.marketwatch.com/news/story/first-solar-ipo-shines-energy/story.aspx?guid=%7BDD94C704-8308-4941-91EE-AB1C112D5E77%7D&dist=

[alpha24seven]

Try again.

First Solar rallies 24% in debut

NEW YORK (MarketWatch) -- First Solar Inc. rallied 24% after adding shares and pricing above its range, as Wall Street took a shine to the maker of thin-film solar panels.
Riding an overall stock-market rally and growing interest in both traditional and alternative-energy firms, First Solar (FSLR
FSLR28.05, -0.70, -2.4% ) priced at $20 a share, raising $400 million by offering 20 million shares.

Wal-Mart connection
The estate of Wal-Mart heir John T. Walton owns about 82% of First Solar and will be selling about 3.8 million shares in the IPO.

Phoenix-based First Solar now employs 634 people. For the nine months ended Sept. 30, the company reported a loss of $4.1 million on revenue of $82 million, compared with a profit of $742,000 and revenue of nearly $35 million in the year-ago period.

[Jeffrey Rusch]

As someone who has become profoundly depressed the few times I have ventured into a Wal-Mart store, I'd hope they'd leave some space between the solar panels for some skylights. Daylighting has been shown in studies to not only save energy but to lead to improved sales and worker morale. It's perverse to use the sun to power artificial lights instead of letting it shine directly on those who need it, the shoppers and the people who work there. But one step at a time, I suppose...

[Chris]

This is a significant move from the largest purchaser in the World. Don't be surprised to see them evaluate Solar Thermal as well as PV. Btu's are an essential part of their energy mix and probably make up 50% of the building load so, this RFP may be further reaching than initially thought.

[Solar Energy]

You can switch to Solar and Save!
Customers may sign up free at http://www.jointhesolution.com/usasolarenergy.
You may be a Sales Associate at http://www.powur.com/usasolarenergy.

[Solar Pool Boy]

I think this is good news. I know in Vancouver, Canada, Walmart has been shut out of that center and has come back with expensively designs that incorporated solar energy and even wind generators. I'd like to see the Walmarts in my town look like this.

[simpleboy]

alpha24seven has a good point. We shouldn't lose the fundamental purpose of what the solar/wind/and-other-alternative-energy- production etc. revolution is about in the fracas over of the huge solar panel revolution that is happening. If we produce our energy in more sustainable ways, well -- of course that's great. But why
waste energy in the first place?

Another example of this irony is the case of GE. They're poised to be one of the main US builders of wind turbines. But it is only via federal regulations on refrigerators that they have begun to approach the energy efficiency of say, a Sunfrost. Sunfrost is probably the smallest refrigerator manufacturer in the US, yet has produced the most energy efficient 'fridge since the mid eighties.

Obviously big firms like GE have never been really all that innovative when it comes to efficiency of applicances, motors etc. because they've always known that such efficiency would lessen the number of nuclear power plants (and other power-producing entities) they could sell. Now it is wind turbines that they can sell more of -- if they hold back on energy efficient products. The situation may be better, yes, but . . . .

I'm not sour or bitter or anything like that, but it is obvious that if folks were listening back during the seventies (or even earlier), to the "hippie" philosphy (or for that matter, the Amish, for example), then we would be in far better shape now that even Europe is, rather than worse, from a sustainable-energy point of view. Likewise, if we focus solely on energy production practices and policies, and ignore the tremendous savings to be had from energy efficiency, then we are committing the same mistakes that led us into the whole problem orignally. Putting our energy-producing eggs into one basket, relying on big corporations and the government, emphasizing costly infrastructure changes like highways over railroads, bicycle and pedestrian trails etc. will still have the same ultimate negative effect even with greener production capabilities.

And that is why, despite Wal-Mart's possible impact, I'm still not going to shop there (unless it is an "emergency" type situation and there isn't anything else open, as has happened a few times in the past). The fact that their fundamental philosophy has not changed is reflected in their continued marginalization of workers, their intent to construct stores in environmentally and aesthetically sensitive areas (like a recent court victory in Tarpon Springs, FL, where they won the right to build next to the Anclote River). . . or even their inability or unwillingness to even construct some type of sturdy shade-giving structures in their black-asphalt parking lots.

No, they have to change far more -- and more quickly, and so do the other big-box stores before they win my love!

[Green Investor]

This Walmart deal could be very good news for Solar Integrated Technology (SIT) a US company that trades on the UK's AIM market.

The SIT SP has been rising steadily since start of the year, and they have recently announced a contract with another supermarket chain.

Furthmore Walmart is already a client of theirs

[robert veach]

Walmart is great, solar is great. Lets give them a break. Just becauSe they are number one-makes them a target. Speaking of TARGET, THEY ARE JUST AS CORRUPT (ACTUALLY WORSE, IF YOU SCALE THE NUMBERS) as Walmart.

If you own a home or rent and are concerned about the environment,Look at this:
www.jointhesolution.com/yorkville
www.powur.com/yorkville

[[email protected]]

Circuit breaker Industries Inc manufactures Hydraulic-magnetic circuit breakers for use with solar panel (PV) installations.

Hope to hear from you. For more detail or samples contact:

Hennie Burger
Electrical Engineer
CBI Inc. Exton, PA

[Stephanie_M]

Further to recent comment above is it known if Solar Integrated Technology one of the fims who may get the contract?
Also when will Wal Mart announce their decision?
Thanks
SM

[ECD4ME]

walmart already has an installation Of Solar Integrated tech useing Unisolar's Thin film product at McKinney Texas. It seems likely That SIT will be among the bidders> they are having great success here and in Europe, Using Unisolars building integrated PV and their own roofing procts

[ECD4ME]

replying to simpleboy. I doubt that GE makes less efficient fridges to sell more power plants. I think its about the marketplace. I'd bet that Sunfrost costs way more than a popular brand for the same size etc. Lets face it most working class Americans wont pay a lot more than typical for appliances or anything else. Wages for the average person are less in real dollars than they were 25 years ago. And people are expected now to save for their retirement, their health care and their childrens college. The social safety net has is disappeared. Only when economics (cost of electricity) dictates will large numbers of people begin paying more than they have to for the items they need.

[Joel Makower]

Here's the latest on the Wal-mart solar RFP.

-- Joel

[Rosie]

These comments have been invaluable to me as is this whole site. I thank you for your comment.

[dee]

You can find prices and other information on solar products at http://altenergy.in

[Juno888]

Another example of this irony is the case of GE. They're poised to be one of the main US builders of wind turbines. But it is only via federal regulations on refrigerators that they have begun to approach the energy efficiency of say, a Sunfrost. Sunfrost is probably the smallest refrigerator manufacturer in the US, yet has produced the most energy efficient 'fridge since the mid eighties

[Phillip Lewis]

Businesses exist to make money. Noone should expect anything different. If solar panels make sense---money wise---they will install them. If not, they won't. As public policy, if we want to use less foreign oil, then make it financially attractive to do otherwise or grow the fuck up. This pollyanna crap is nauseating. The federal government owns 700 million acres of land in America. If less dependence on imported oil was really desireable, there would be drilling in the caribou country of Alaska. Until that happens, I will continue to consider all the conversation about the tragedy of buying oil from the middle east just so much tireless rhetoric.

[energie]

In Europe there is currently an wind energy revolution going on.
Germany has increased its use of wind energy in 2006 by 26%!
This is a huge example that deserves following by other nations.