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Retail Goes Solar

By Jack Uldrich – Updated Nov 15, 2016 at 12:25AM

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Two more major retailers embrace solar power because it makes economic sense.

Advocates of solar power were given additional reasons to be bullish about the industry's long-term prospects this past week after two large retailers -- Tiffany & Co (NYSE:TIF) and Kohl's Corp (NYSE:KSS) -- announced plans to install major solar power projects.

Of the two, Kohl's is the more significant deal. According to company officials, the giant retailer will immediately convert 24 of its 80 stores in California beginning in May, and within a year it plans to convert more than 75% of its department stores in the state. When completed, the solar installations, which will be set up and serviced by SunEdison, could generate close to 30 megawatts of power.

Tiffany's project will deploy 1.3 megawatts of solar power (the equivalent of powering about 1,300 homes) at two of the company's distribution centers. When operational, the solar arrays, which will be supplied by SunPower (NASDAQ:SPWR), will contribute an estimated 30% of the distribution centers' electrical load at peak demand times.

In both instances, the companies will need time to recover their upfront investments. Therefore, I wouldn't encourage investors of Kohl's or Tiffany's to get too excited about the news from an immediate investment perspective. For investors interested in solar, though, the fact that such large retailers have now joined the likes of Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT) and Applied Materials (NASDAQ:AMAT) in installing large amounts of solar power is welcome news because it strongly suggests that businesses are no longer turning to solar power just to improve their environmental image -- they are doing it because it makes economic sense.

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Fool contributor Jack Uldrich doesn't own stock in any of the companies mentioned in this article. The Fool has a strict disclosure policy.

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Stocks Mentioned

Kohl's Corporation Stock Quote
Kohl's Corporation
KSS
$26.30 (-2.34%) $0.63
Tiffany & Co. Stock Quote
Tiffany & Co.
TIF
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.92 (-1.27%) $-3.06
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
SunPower Corporation Stock Quote
SunPower Corporation
SPWR
$24.69 (-1.95%) $0.49
Applied Materials, Inc. Stock Quote
Applied Materials, Inc.
AMAT
$84.29 (-0.88%) $0.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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