Box-Office Solar …

Wal-Mart announced today a huge solar system purchase, a “pilot project … toward its goal of being supplied by 100 percent renewable energy”.

For many, Wal-Mart has been an odd poster child for Green business management. While it is hard to say that its business model is ‘sustainbilility focused’ (importing things from far away, disposible (non-durable) products, big box stores served more by SUVs than public transport, etc), in terms of managing it stores’ and transport fleet operations, Wal-Mart is setting a standard for others to follow.

As part of Wal-Mart’s sustainability focus, one of the targets is to power stores with 100% renewable power. With renewable power, generally, costing more than current fossil-fuel power, Wal-Mart is first focusing on making stores as efficient as possible in energy use.  And, they are working to move their power supply to 100% renewable. 

According to today’s announcement,

  • Wal-Mart signed contracts with three firms for solar for 22 sites
  • Annual solar production estimate: 20 million kilowatt/hours (kwh)
  • Each facility will receive up to 30 percent of its power through the solar system
  • Estimated GHG reduction: 6500-10,000 metric tons/year

Wal-Mart seems to have started its ‘greening’ as a path to divert attention from other issues — as a publicity tool, as “greenwashing”.  Now, well, they seem to have discovered that being Green is smart business for a company focused on being ‘lean’.  Wal-Mart has discovered the business case for going green and is pursuing it with a vengeance.  And, they aren’t scared to share their lessons, including in their very good The Road to Sustainbility web presentation.

And, to be clear, while the dollars work out, Wal-Mart leadership has clearly acknowledged Global Warming (“Climate Change”) and that they have a role (even a meaningful role) in setting  a different path foward. From Walmart CEO Lee Scott’s October 2005 Twenty-First Century Leadership speech:

“These commitments are a first step. To address climate change we need to cut emissions worldwide. We know that these commitments won’t even maintain our fast growing company’s overall emissions at current levels. There is more to do and we are committed to doing our part.”

Now, while Wal-Mart is taking significant strides forward in terms of its own operations and their GHG footprint (and taking these lessons to suppliers), the next question is when will they be taking these to their customers.

There are many obstacles to breakthroughs in solar power installations — a major store like Walmart could burst through many of these by providing:

  1. Economy of scale in a specific marketplace
  2. Standard offerings (‘defined’ packages with performance guarantees)
  3. Training for inspectors / etc about how to handle solar installations

Wal-Mart could help, when it comes to solar power, to make the right choice, the easy choice

8 responses to “Box-Office Solar …

  1. It is interesting how they did this, they are very smart, from another source:

    Wal-Mart (WMT) will buy electricity produced by the arrays at market or below market rates and retain ownership of any Renewable Credits.

    Based on this, I don’t think WMT is buying the arrays, just agreeing to buy the power produced at market rate. It is win win for WMT, they get green press and continue buying power at market rate (or lower). I don’t know how they managed to get those solar panel manufacturers to take that deal, I’d take it in a heartbeat if I could get it. Maybe WMT is paying for the installation, but it still sounds like a really good deal for WMT, much better than what whole foods is getting.

  2. Green Man — I could be wrong, but my impression is that there will actually be solar installations at the Wal-Mart sites (or directly tied to them). This does not look to be the equivalent of buying electricity from wind on the grid. At their test stores (mentioned in the press release), Walmart has actually installed windmills and solar PV. Now, I heard a Wal-Mart executive brief on their energy efficiency & renewable energy in January. In terms of pure fiscal ROI, at that time, the numbers did not justify their investment for WMT. Now, what happened in the interim? Is this simply a living up to “we will be 100% renewable” or, as you suggest, perhaps they worked the financials of the deal such that they are a better ROI. Or, perhaps, both.

  3. Siegel: I think you’re right, WMT is headed towards distributed generation in a number of ways. From what I’ve seen, their ROI numbers are working out OK so far. Guess it all depends on the timeline?

  4. I wonder whether their greening will lead to actually carrying renewable energy products… Like solar-kits, small PV panels, etc. I would be very excited if WalMart’s buying clout could actually lead to (gasp!) lower prices and more PV/turbine availibility.

  5. Eileen … that was the point of my ending paragraphs. While I have serious questions about CitizenRE, a major retailer like Wal-Mart could, in my opinion, radically change the retail market space for solar solutions.

  6. I know they are putting the panels on the stores themselves, however, my point was that they’re paying retail or lower for the electricity the panels generate. I’m assuming whole foods is paying a premium for their RE.

  7. Three firms for 22 sites.

    If nothing else, WMT will push to increase the manufacturing capacity of PV solar if this pilot project gets off the ground, the big pay-off is going to be if the 22 stores become 220 and then 2200 stores and DCs.

    I wonder if the three companies were selected because one couldn’t handle to job, or if they’re having a solar beauty contest between three PV-inverter combos. My guess would be the latter, if one proves itself to be superior in output and low TCO they may go with that one for a bigger project.

    It’s A Good Thing.

  8. Steve Caratzas

    Wal-Mart is like a well-meaning nincompoop uncle: trying to do the right thing, just not very competently. I’m not a big fan of the chain, but I give them points for trying.

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