Corporate America Is Betting Big on Solar Energy

The future of solar energy may be debated in the media, but in corporate boardrooms the decision to go solar is easy. It comes down to dollars and cents.

Aug 31, 2014 at 8:51AM

Many people may still question the future of solar energy in the United States, but there's little debate in corporate America over whether to go solar. What may surprise you is that the discussion has nothing to do with climate change.

Some of the largest and most influential companies in the country are spending billions of dollars to outfit their businesses with solar energy. And they're doing so in the name of increasing shareholder value.


An image of eBay's headquarters with a solar system built by SolarCity. Source: SolarCity.

Verizon takes the telecommunications industry solar
The latest company to make a big investment in solar is Verizon Communications (NYSE:VZ), which is installing 10.2 megawatts of solar power systems from SunPower (NASDAQ:SPWR) at eight network facilities around the country. The investment will cost about $40 million and will nearly double the company's investment in solar energy.  

When discussing the investment on Bloomberg TV, James Gowen, Verizon's chief sustainability officer, said "It's not just about going green. It's about driving shareholder value; it's about building redundancy." Today, solar energy created on-site is cheaper than buying energy from the grid, particularly when you include the tax benefits to companies such as Verizon.  

Corporate America bets big on solar
Verizon is just the latest in a long line of corporations to go solar by building its own sun-powered energy systems. These include some major U.S. names.

Wal-Mart (NYSE:WMT) has installed over 250 solar energy systems on store and distribution center rooftops, providing 15% to 30% of each location's energy needs. In all, the mega-retailer has built over 335 renewable energy projects around the globe. SolarCity (NASDAQ:SCTY) is one of Wal-Mart's main suppliers of solar, with an agreement to build 60 rooftop systems in California alone.  

Walmart Renewable Energy Infographic

Source: Wal-Mart.

Apple (NASDAQ:AAPL) is another notable corporate solar and renewable energy supporter. The company has built three 20-megawatt solar systems at data centers around the country and has at least 40 MW more solar in the pipeline. The company also uses fuel cells that run on biogas and other renewable (or at least cleaner) forms of energy to power its business.

Costco had 47 MW of solar installed as of mid-2013, enough to make it the second-largest commercial installer at the time.


Commercial solar system on the roof of a Wal-Mart distribution center. Source: SolarCity.

These are big, profitable companies that wouldn't put solar on their rooftops or adjacent to data centers if it wasn't profitable. As Verizon's Gowen said, it's about adding shareholder value, and that means saving money.

The tip of the iceberg
If solar energy makes sense anywhere it's on the large rooftops of stores and distribution centers, which is where most of these companies are building the systems. The installations provide energy at the source of demand, and the large scale of the installation brings costs in far lower than a small residential rooftop system. That's why the economics are too good for corporate America to pass up.

Keep in mind that this trend is just beginning. The Center for Environmental Innovation in Roofing estimates there are 50 billion square feet of flat commercial rooftops in the U.S. If only 25% were suitable for solar, that's potential for 125 gigawatts of installations, or more than three times the amount of solar installed in the world in 2013.  

To put it another way, 125 GW of solar is enough to power 20.5 million households in the U.S. Corporate America has already started to see the value in turning its rooftop space into power-generating assets, and I think this trend is only going to grow in the future.

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Travis Hoium manages an account that owns shares of Apple, SunPower, and Verizon Communications and is personally long shares of SunPower. The Motley Fool recommends Apple, Costco Wholesale, and SolarCity. The Motley Fool owns shares of Apple, Costco Wholesale, and SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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