Covering a large commercial rooftop with solar panels is not as simple as it may seem.
Start with the art and science of power engineering and the idiosyncrasies of the power grid to which the solar panels connect. When engineers from GE Solar installed 550 kilowatts worth of panels on Home Depot’s store on Rhode Island Avenue in Washington, D.C., they had to adapt to an antiquated grid in which power could flow only one way — from the power plant to the customer.
That posed a dilemma: On sunny days when the panels were pumping out kilowatts, electricity in excess of what Home Depot needed for its operations would have to flow into the grid; and on cloudy days or nights, energy from the grid would have to flow into the store. “We had to design around this,” says Carlos Floresguerra, the head of GE’s development team for the project. “We had to understand not just the solar system but the power around it — the way the load is shaped and power is produced.” How exactly they managed to do this would require its own series of stories.
Other considerations, such as making sure that the roof is structurally compatible and the solar panels are properly installed, are easier to solve. Because most industrial buildings are made to shelter what’s inside rather than having to support heavy objects, using a cinderblock-weighted racking solution is often not feasible, and lightweight racks bolted to the roof are expensive. The solution, following a bit of structural engineering, is often a hybrid between the two.
But the physical engineering challenges of rooftop solar panels pale compared with the financial structuring involved. That’s because the economics of solar energy is intertwined with the myriad regulations of federal, state and local governments and the incentives provided for renewable energy.
Above: A 550-kilowatt solar array now sits atop Home Depot’s store on Rhode Island Avenue in Washington, D.C. GE Solar, which handled the panels’ installation, sells the energy they produce to Home Depot. “Home Depot gets two bills — one from its utility and one from the solar project,” says Ellen Roybal, strategy leader for GE Solar. “Between both bills, the Home Depot pays less for power than before its solar project.” Above and top images credit: GE Solar.
Chief among those regulations is the requirement that utilities, the companies that serve large segments of consumer demand for electricity, generate some portion of their energy from renewable sources such as solar power, and that they provide customers like Home Depot or you with the ability to sell electricity they generate back to the grid. The financial instrument that allows a marketplace to operate is the solar renewable energy credit (SREC). Utilities buy SRECs to show that they are utilizing solar energy within their grids.
SRECs have a market of their own, subject to the laws of supply and demand. In New Jersey, where rooftops are abundant, solar energy is in great supply. When GE installed 850 kW of solar panels on Home Depot’s store in Union, New Jersey — the company’s largest store — the price of SRECs was about $200 per kilowatt-hour. Since rooftops are fewer in number in Washington, D.C., demand for SRECs is steep, and prices of $400 or $500 per kWh are typical. On top of the SRECs market, the federal government offers a 30 percent solar tax credit, and many states, counties, municipalities and utilities offer rebates or other incentives for solar energy technologies. “We were able to structure these deals in a way that captures maximum incentives, and translate that value for Home Depot through our power purchase agreement,” says Ellen Roybal, strategy leader for GE Solar.
GE has installed solar panels on 30 Home Depot sites throughout the northeast United States in the last few years. Image credit: GE Solar.
Optimizing all these variables is a big part of what GE Solar brings to these projects, and it has an incentive to get it right: GE assumes the operational risks of the rooftop plants. Home Depot didn’t spend any money on either installation — GE financed the systems and funded and managed their construction. It sells the energy the panels produce to Home Depot at a steep discount to what it gets from the local utility. “We are responsible for all the complicated things we do behind that to produce that power,” Roybal says. “Home Depot gets two bills — one from its utility and one from the solar project. Between both bills, the Home Depot pays less for power than before its solar project.”
In the past few years, GE has installed solar panels on 30 Home Depot sites throughout the northeast United States. That’s an important milestone in GE’s goal of growing the distributed solar market, and bringing economical, local energy to businesses.
GE | http://www.ge.com