In recent months, chains including Wal-Mart Stores, Kohl’s, Safeway and Whole Foods Market have installed solar panels on roofs of their stores to generate electricity on a large scale….
In the coming months, 85 Kohl’s stores will get solar panels; 43 already have them. “We want to keep pushing as many as we possibly can,” said Ken Bonning, executive vice president for logistics at Kohl’s.
Macy’s, which has solar panels atop 18 stores, plans to install them on another 40 by the end of this year. Safeway is aiming to put panels atop 23 stores….
Wal-Mart [is considering a] program that would put panels and other renewable technologies at hundreds of stores.
All that is left for the Sunday NYT story, “Giant Retailers Look to Sun for Energy Savings,” is to explain why these bottom-line savvy companies are making such large bets on rooftop solar photovoltaics (PV), even though the power is widely thought to be expensive.
This should be incredibly easy — assuming this reporter or her editor even bothers to read their own paper. After all, just a few months ago a different NYT reporter explained it all in a story titled, “Pay for the Power, Not the Panels“:
The new financial techniques allow the solar companies to separate the capital expense of the systems they sell and the tax benefits that accrue to the buyer from the final costs of the electricity produced. In doing so, the solar companies have made it possible for more corporations and even some homeowners to kill two birds with one stone: doing good for the environment while cutting the cost of the power they consume.
[Small note to NYT: In an environmental story, maybe use a different metaphor than bird-killing.]
That’s right. Corporations are actually cutting their electricity costs by installing solar panels. But you would never know that from Sunday’s story. In fact, you’d think these companies were throwing away their money:
Booming demand in recent years has driven up the price of solar panels, and analysts say it costs far more to generate electricity from solar energy than from coal.
Coal generation costs about 6 cents for a kilowatt hour, which is enough electricity to run a hair dryer for an hour. Natural gas generation costs about 9 cents a kilowatt hour, said Reese Tisdale, a senior analyst with the consulting firm Emerging Energy Research. In comparison, “best case” for power from solar panels is about 25 to 30 cents a kilowatt hour, he said.
But retailers believe that they can achieve economies of scale. With coal and electricity prices rising, they are also betting that solar power will become more competitive, especially if new policies addressing global warming limit the emissions from coal plants.
No, no, no, and no! Un-friggin’-believable.
Readers of this story would be left with the distinct impression that major retailers are paying four times more for electricity than they should be just to satisfy some irrational green urge. The line “retailers believe that they can achieve economies of scale” wins points for unintentional humor, given the old joke about the retailer who lost money on each sale but hoped to make it up “on volume.”
Why on earth would you compare the price of coal from existing plants, which no retailer can buy power directly from, with the supposed “best price” from some uninformed “senior analyst” at an obscure, albeit cleverly misnamed, research firm?
The fact is that the retail price for electricity in most parts of the country is considerably higher than six cents per kilowatt hour, especially during the peak times when PV panels deliver most of their power. And as the NYT itself noted in its earlier story, clever firms like SunEdison have figured out how to finance solar projects so as to offer retailers a guaranteed long-term contract for electricity below their current electricity rate.
Retailers see solar energy as a way to provide certainty for their own electricity costs at a time when traditional providers are raising rates (see “AEP demands 45% rate increase for Ohio“).
Yes, you (currently) need to have government incentives to make this work, but U.S. incentives are considerably less than many major countries that see the benefits to their nations of pushing clean energy and establishing a major foothold in what is certainly going to be one of the biggest job-creating industries of the century.
And by 2015, solar PV shouldn’t need government incentives, since the price is expected to drop considerably and since we should have a price for carbon dioxide by then that starts to reflect its environmental damage.
But the bottom line is that solar is good for the bottom line right now in many states.
Let’s award the NYT five spent nuclear fuel rods on energy issues for their ongoing lame coverage of this seminal issue (see also “The NY Times’ absurd energy editorial“).