Skip to main content

Solar powers business

Solar power got another much-needed boost recently when Wal-Mart announced that it would plan on adding solar equipment to a number of its U.S. stores.

The company has asked potential solar equipment suppliers to bid on initial projects and to include costs for possible build-out and expansion over the next five years. If the plans are carried out, it could make Wal-Mart America's largest user of solar power.

The Financial Times reports that a move to solar and other forms of renewable energy is taking place due to rising electricity costs and a desire to bolster corporate images:

The new US enthusiasm for solar power reflects both the impact of rising electricity bills, and concerns over reputational or brand identity issues.

Wal-Mart, for instance, says it wants its stores to be entirely powered by renewable energy, and has committed itself to reducing the greenhouse gas output from its existing global network by a fifth by 2012, while Staples has said it intends to get its emissions to 7 per cent below its 2001 levels by 2010.

This would be a great move for Wal-Mart and other big box retailers who are looking to win over some of the more environmentally conscious and higher-income shoppers who have tended to snub these stores.

But what makes these projects really interesting is their ability to overcome the problems of cost that have previously held them back.

Solar power development in the US has, in general, lagged behind Europe and Japan, where governments have been more active in encouraging it, and centralised power utilities have created initiatives such as buying back surplus power for use on the grid.

But potential users in the US are now benefiting from the emergence of a new approach to operating solar arrays. In a model developed by SunEdison, an energy services company specialising in solar power, the retailer pays for the electricity but not for the costly installation.

In 2005, SunEdison formed a $60m investment fund with Goldman Sachs and Hudson United Bank to finance the installation of 25 solar systems for Staples and Whole Foods, using the subsidies now provided by a growing number of US states to encourage the development of renewable power.

The model, says Mr Buckley at Staples, dramatically changed the attractiveness of solar power, offering companies the immediate benefit of power priced below current prices on a 20-year contract, with maintenance costs handled by the service provider.

"We looked at solar power in the past, and to own it and put it on the roof just didn't meet our standards for the internal rate of return on a capital project," he says. Under the power purchase approach, "there's no capital investment, no maintenance, and no associated costs . . . we know what our costs will be for that proportion of our load for that period of time."

Unfortunately, subsidies are still deemed necessary for getting some of these projects off the ground. Hopefully, the latest advancements in solar, combined with Wal-Mart's entry into the power business, will help drive costs lower.

Popular posts from this blog

The Dot-Com Bubble in 1 Chart: InfoSpace

With all the recent talk of a new bubble in the making, thanks in part to the Yellen Fed's continued easy money stance, I thought it'd be instructive to revisit our previous stock market bubble - in one quick chart.

So here's what a real stock market bubble looks like. 

Here's what a bubble *really* looks like. InfoSpace in 1999-2001. $QQQ$BCORpic.twitter.com/xjsMk433H7
— David Shvartsman (@FinanceTrends) February 24, 2015
For those of you who are a little too young to recall it, this is a chart of InfoSpace at the height of the Nasdaq dot-com bubble in 1999-2001. This fallen angel soared to fantastic heights only to plummet back down to earth as the bubble, and InfoSpace's shady business plan, turned to rubble.

As detailed in our post, "Round trip stocks: Momentum booms and busts", InfoSpace rocketed from under $100 a share to over $1,300 a share in less than six months. 

In a pattern common to many parabolic shooting stars, the stock soon peaked and began a…

New! Finance Trends now at FinanceTrendsLetter.com

Update for our readers: Finance Trends has a new URL! 

Please bookmark our new web address at Financetrendsletter.com

Readers sticking with RSS updates should point your feed readers to our new Finance Trends feedburner.  



Thank you to all of our loyal readers who have been with us since the early days. Exciting stuff to come in the weeks ahead!

As a quick reminder, you can subscribe to our free email list to receive the Finance Trends Newsletter. You'll receive email updates about once every 4-8 weeks (about 2-3 times per quarter). 

Stay up to date with our real-time insights and updates on Twitter.

William O'Neil Interview: How to Buy Winning Stocks

Investor's Business Daily founder and veteran stock trader, William O'Neil shared his trading methods and insights on buying winning stocks in an in-depth IBD radio interview.

Here are some highlights from William O'Neil's interview withIBD:

William O'Neil's interest in the stock market began when he started working as a young adult. 

"I say many times that I didn't get that much out of college. I didn't have much interest in the stock market until I graduated from college. When I got married, I had to look out into the future and get more serious. The investment world had some appeal and that's when I started studying it. I became a stock broker after I got out of the Air Force."
He moved to Los Angeles and started work in a stock broker's office with twenty other guys. When their phone leads from ads didn't pan out, O'Neil would take the leads and drive down to visit the prospective customers in person.

"I'd get in the c…