From the Rooftops, Big Box Stores Are Embracing Solar

Oct 7, 2019 07:10 PM ET
From the Rooftops, Big Box Stores Are Embracing Solar
Target’s famous bull's-eye is so cosmically linked with the brand that it’s hard to imagine the retail behemoth ever messing with the logo’s red color. But over the past decade — under pressure from customers, shareholders and employees — Target’s retail future is morphing into a very different hue: eco-green.

The Minneapolis retailer best-known for its trendy, private-label brands and its millennial-friendly prices, has very publicly embraced the renewable energy passions of its millennial-heavy consumer base and is adding rooftop solar panels to its stores to generate renewable electricity at a breathtaking pace.

Target is so serious about being viewed as a friend of the planet that by November, the company said, it will have erected rooftop solar panels on 500 of its stores in the United States. That’s more than one-quarter of its total 1,855 stores, and Target expects to reach that goal one year earlier than projected.

By the end of 2019, Target will have achieved 25 percent of its mission to attain 100 percent renewable electricity in its stores — and this just months after announcing the pledge. In its relentless bid to out-green archrival Walmart, Target also has ranked No. 1 in on-site solar capacity for three years in a row in the Solar Energy Industries Association’s Solar Means Business report, a survey of corporate solar users.

“We view this as one of the most important things we can do,” said Mark Schindele, senior vice president of properties at Target. “The headline we are focused on is this: What’s most important to Target’s guests?”

At a time when the federal government is increasingly stepping away from addressing issues like sustainability and climate change, corporate America is stepping up. Retail giants from Target to Walmart to Amazon; and tech titans from Apple to Google to Facebook, are taking action to respond because it’s good for business and good for corporate image. For many consumers, addressing core issues like climate change and sustainability go hand-in-hand with attracting their business.

Going green has never looked so good — or cost so little. Solar power is almost 90 percent cheaper than it was 10 years ago and wind power is about 70 percent cheaper, said Gregory Wetstone, president and chief executive of the American Council on Renewable Energy, a nonprofit that promotes the transition to renewable power. That explains why companies in the United States purchased three times as much power generated from solar and wind energy in 2018 than they did the year before.

“Every aspect of retailing’s machine is going to be modernized and ultimately energized green,” said Marshal Cohen, chief retail industry analyst at The NPD Group, a research and consulting specialist. This green evolution not only applies to energy use, but everything from packaging to fuel consumption during delivery, he said. “Retailers will chase greenness to be viewed as part of their DNA.”

This has left many of the world’s biggest companies falling all over themselves to embrace solar power, wind power and other renewables. But over the past decade, major retailers like Target and Walmart, who use vast quantities of energy in their stores, have gone from sticking a toe in the water to diving in headfirst.

“Target and Walmart are competing over who can be greener,” said Mr. Wetstone. Besides saving serious money on energy costs, he said, “There are tremendous business advantages from having customers understand that you walk the walk.”

Which may explain why since mid-2017, Target’s distribution center in Phoenix has been outfitted with a massive solar panel display designed in the shape of Target’s bull's-eye logo. The solar panel display — which stretches the distance of seven football fields — can be seen by passengers arriving and departing on flights at nearby Phoenix Sky Harbor International Airport. Because Target is so widely recognized for its design capabilities, designing the solar panels in the shape of Target’s logo was a no-brainer, said Mr. Schindele.

But Walmart is right on Target’s tail. It also has set a long-term goal of using 100 percent renewable energy. “We know this is on the minds of our customers,” said Laura Phillips, senior vice president of sustainability at Walmart. By 2025, Walmart aims to power 50 percent of its operations with renewable energy through on-site installations and purchases from external power providers.

That helps to explain why companies purchased three times as much renewable power last year than they did the year before, said Mr. Wetstone. They purchased 8.6. gigawatts of solar and wind power in 2018, which is enough to power 2.2 million American homes annually, according to the American Council on Renewable Energy.

Unlike Target, whose stores are all domestic, Walmart has renewable energy projects all over the world from South Africa to China to India. In India, rooftop solar power is in 90 percent of its buildings. And in China, Walmart recently placed a rooftop solar project at a Sam’s Club store in Jiangxi Province.

Worldwide, Walmart has 136 projects under development that will generate another two billion kilowatts of renewable energy, Ms. Phillips said. And via a supplier-focused initiative that Walmart calls Project Gigaton, the retailer is working to avoid one billion metric tons (a gigaton) of greenhouse gases from the global value chain by 2030.

Back at Target, the company’s rooftop solar program began with a trickle around 2011, shortly after John Leisen, Target’s vice president of property management, joined the company. The program took off in 2015 when 150 stores added solar roofs — and just four years later, that figure has more than tripled.

Not all Target stores are solar roof candidates, however, because most of its smaller stores are rented spaces and some are in parts of the country where the economics of going solar don’t work out. Target won’t say what it’s investing in solar, but Mr. Leisen confirmed it’s “millions” of dollars.

A solar panel rooftop system for a mass merchandiser like Target or Walmart can cost $150,000 to install, according to estimates from the Solar Energy Industries Association, a nonprofit trade association of the solar-energy industry. “As C.F.O.s get more comfortable with the concept, they realize it makes sense,” said Abigail Ross Hopper, chief executive of the trade group.

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