Big Retail Stores Prime Solar Energy Generators

A few solar energy companies have discovered an opportunity on the roofs of big retail stores. They're offering to install solar panels for free. They then sell the electricity back to the store, often at lower rates than the local utility charges.

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A few solar energy companies have discovered opportunity on the roofs of big retail stores. They're offering to install solar panels for free. They then sell the electricity back to the store, often at lower rates than the local utility charges. Retailers like this because it lets them boast about being green, as NPR's Jeff Brady reports.

JEFF BRADY: The Walgreens Drug Store chain has signed up for a trial run on 20 of its stores. One is in Magnolia, New Jersey.

(Soundbite of banging sounds)

BRADY: Store manager David Wilson climbs up a metal ladder.

Mr. DAVID WILSON (Store Manager, Walgreens): So basically, when you come up on the roof and you take your first glance, it's pretty much like a sea of glass, and you see a bunch of solar panels all lined up and facing the sun at a very small angle.

BRADY: The panels rise only about a foot off the roof. You can't see anything from the ground. They produce only 10 to 15 percent of the store's electricity, but Walgreens' national energy manager, Menno Enters, says this was an easy decision.

Mr. MENNO ENTERS (National Energy Manager, Walgreens): We're doing something because it's good for the environment, and we're doing something because it is the right thing to do. We have the roof space, and if it doesn't really cost us any money...

BRADY: Then what's to lose? That's also the sales pitch of the company that installed the panels, SunEdison. It's one of several recent start-ups that are using a new business model for the solar industry. Instead of selling the panels, they install them at no cost and sell the electricity. Under this arrangement, investors with deep pockets front the money and keep the tax credits that encourage investment in wind and solar.

Mark Culpepper is SunEdison's vice president of strategic marketing.

Mr. MARK CULPEPPER (Vice President, Strategic Marketing, SunEdison): You don't have to worry about the equipment. You don't have to worry about how your building is oriented in relation to the sun. We take care of all those problems for you. And at the end of the day, you get a bill on a regular billing period that basically says this is how much electricity was produced, and this is what your rate is, and this is how much money you actually saved.

BRADY: Usually, that's not much. But retailers are pleased it doesn't cost more than what they've been paying. So everybody's happy, except the local utility. While some utilities have embraced this new idea, most have not. They're concerned about the way the record keeping works, specifically an issue known as net metering. When the solar panels produced more power than the store uses, the electric meter essentially rolls backwards, so the utility is buying electricity from the store at the retail rate.

Utilities prefer to buy wholesale and sell retail. Some of the profits pay for all those power lines and poles in your neighborhood. Ed Legge is with the Edison Electric Institute. He says net metering gives companies like SunEdison a free ride on a distribution network that utility rate payers spent a lot of money to build.

Mr. ED LEGGE (Spokesman, Edison Electric Institute): The analogy is of someone who uses a toll road everyday, but somehow doesn't have to pay the toll. Everybody else ends up subsidizing that person's presence on the tollway.

BRADY: It's not a lot of money now, but Legge says if the industry grows, it could be. The solar companies argue that at times, they actually save utility's money. On really hot days, many utilities operate near their peak capacity have to turn on the expensive-to-operate power plants. With these solar panels, utilities would have to do that less often. Still, overall, Legge says it amounts to a subsidy. SunEdison and the other companies are backing a bill in Congress that would establish a national net metering standard. The legislation appears stalled. Meantime, the companies say they're operating only in seven states - all have local net metering regulations.

Jeff Brady, NPR News.

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