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Is The Corporate Demand For Solar Energy Stronger Than Trump’s Tariffs?

Is The Corporate Demand For Solar Energy Stronger Than Trump’s Tariffs?
Amazon is shooting for the sun and is about to rev up one of California’s biggest solar rooftop systems that spreads 23 rooftop-acres. It’s a microcosm of the trend sweeping across corporate America. But is this wave more powerful than current federal policies and especially the just-imposed solar tariffs?

Eco-minded businesses, in fact, have led the effort to join global climate talks and to curb heat-trapping emissions. And they are the same ones entering into power purchase agreements, buying directly from utilities and installing solar panels on their roofs — efforts that have not escaped even the most cynical politicians.

While the movement started with Silicon Valley’s tech giants like Amazon and Apple, it has now gained a lot of traction among major retailers like CostCo., Wal-Mart and Target. And companies long a part of the American fabric are also active: General Motors and General Mills, to name two.

Why? Building up the brand to appeal to environmentally-aware consumers is one reason. But so too is economics and free markets: Indeed, wind costs have fallen by 67% since 2009 while utility-scale solar has dropped by 86% since that time, according to the financial advisor Lazard.

“This is one of 50 installations that we plan to execute by 2020,” Greg Michaelson, Amazon’s Renewable Energy Projects Manager, said of the project that will go live in April. “At peak sunshine, this roof will generate 3.8 megawatts direct current, which is one of the largest solar rooftop installations in California.”

Amazon now powers half of its energy needs using renewable power and it has a longer-term goal of getting to 100%. It has 10 such green projects that will generate a total of 2.6 million megawatt-hours a year. Its new buildings are also equipped with LED lighting, advanced building management systems and high-efficiency heating and cooling programs.

In all, corporations have contracted to buy 7 gigawatts of renewable energy over four years — a number that is expected to grow to 60 gigawatts by 2025. That what the utility-backed Edison Foundation Institute for Electric Innovation is reporting. It points to General Motors, Johnson & Johnson and Proctor & Gamble that are part of the Renewable Energy Buyers Alliance that collaborates with the RE100 — comprised of companies that aim to run their entire operations using renewable energy by 2050.

“We’re incredibly proud of the progress we’ve made in improving building efficiencies and reducing environmental impact,” adds John Leisen, vice president of property management at Target that set solar installation records last year, in a release. “Our commitment to installing solar panels on 500 stores and distribution centers by 2020 is evidence of that progress.”

To be clear, rooftop solar panels are a form of distributed energy that only relies on the grid when the sun isn’t shining or to send excess power to utilities. Utility-scale solar power, by contrast, feeds into the grid. Because it is generated from a central location and then transported to the urban areas where it often consumed, it can be more cost effective than distributed power.

With that, utility-scale solar has represented about two-thirds of the market over the last few years, says the Solar Energy Industries Association.

Solar customers span the market. They are high tech and retail, as well as smaller commercial and industrial enterprises. Santa Barbara-based Wiser Capital has said that 83% of the small-to-mid-size company managers that it surveyed will be investing in solar energy projects by 2020.

PriceWaterhouseCoopers adds that the green energy market has grown over the last 24 months and that it will continue to expand. 72% of the companies it surveyed said that they are pursuing renewables, noting that they want to be more sustainable and to use green energy to hedge against volatile energy prices.

Will this movement be impeded by the solar tariff imposed by President Trump in January? The 30% percent tariff on all solar panel imports will unquestionably hit the $29 billion industry.

The irony of the tariff, which falls by 5% a year and which is ultimately phased out, is that it is intended to “save” or “prop up” the domestic solar manufacturing sector. But American solar panel makers make up just 5% of the global production market. What the tariffs will do is to raise solar energy prices on those entities that buy and deploy the technologies.

The Solar Energy Industries Association estimates that the increases will cost 23,000 jobs while GTM Research says the industry will see solar projects reduced by 11% as a result. Specifically, solar deals totaling 7.6 gigawatts will be foregone over the next five years; utility-scale solar will take the biggest blow, losing 65% of that 7.6 gigawatts.

“It boggles my mind that this president — any president, really — would voluntarily choose to damage one of the fastest growing segments of our economy,” Tony Clifford, chief development officer of Standard Solar said.

The good news is that much of corporate America remains committed to becoming increasingly sustainable. No doubt, challenges persist, whether they be new tariffs or evolving policies. But one thing will remain a constant no matter who occupies the White House — the free market, which is led by consumer demand and economic opportunities. And that will eventually trump the current obstacles that are obstructing the path of the solar energy sector.

Amazon

 

SOURCE:  Forbes

BY:   , I write about the global energy business.

LINK:  https://www.forbes.com/sites/kensilverstein/2018/03/12/is-the-corporate-demand-for-solar-energy-stronger-than-trumps-tariffs/#1ecfcd6641

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