Target starts solar-power rollout

John Vomhof Jr., April 30, 2007

Target Corp. is spending millions of dollars to cuts its energy costs and secure a greener image in the process.

The Minneapolis-based retailer has installed solar panels on the roofs of four of its California retail stores and plans to install similar systems at 14 more locations later this year. The solar-panel systems will generate about 20 percent of those stores' annual energy requirements.

Target joins a growing number of retailers and other major corporations that are adopting alternative-energy sources. Rival discount retailer Wal-Mart Stores Inc. also has adopted renewable energy sources at some of its stores, though it only has dabbled in solar power.

Target has installed solar panels at three stores in the Los Angeles market and another in El Cajon, near San Diego. The company will expand the program to other California stores later this year, including some in the San Francisco Bay area.

Target declined to comment on whether it might someday use solar energy in the Twin Cities or other markets outside of California, but spokeswoman Amy von Walter said the use of solar energy falls in line with Target's focus on energy-efficient design and operations.

"Part of Target's DNA is our commitment to the community, and certainly that ties into the environment as well," she said. "We're known as being an ethical company, and we are very sensitive to meeting green standards as we do business whenever possible." Major investment

It is not a small commitment either. The solar-power systems Target is using are extensive and costly.

A Target store in Stockton, Calif. -- about 60 miles east of San Francisco Bay -- recently installed solar panels in five grids, spanning roughly 50,000 square feet, or about 40 percent of the rooftop. The 1,962 solar photovoltaic modules would be more than enough to cover an entire football field.

A system that size would cost an estimated $3 million to $5 million, said Barry Cinnamon, CEO of Los Gatos, Calif.-based Akeena Solar Inc., one of the nation's leading designers and installers of solar-energy systems.

But a company like Target could see immediate economic benefits from using solar energy, Cinnamon said. When a company finances a solar project, the monthly energy savings often outweigh the monthly financing expenses. "It's cheaper over the long term to put a solar-power system on your roof and generate your own electricity than it is to rent it forever from a utility."

Even large companies that pay the full capital expense upfront generally see the solar-power systems pay for themselves in seven to 10 years in California, said Andrew Beebe, president of Pasadena, Calif.-based Energy Innovations Inc., which installed a multimillion-dollar system at Google Inc.'s corporate headquarters earlier this year.

Many companies are moving to solar energy in California, Beebe said, because the state's rebate program, combined with federal tax credits, can cover 50 to 60 percent of the cost of installing a solar-power system. "It's almost becoming a part of every major company's corporate strategy," he said. Wal-Mart's energy rollout

Target's largest competitor, Bentonville, Ark.-based Wal-Mart, installed solar-power systems at two experimental stores in 2005. Those stores also implemented wind turbines and various other initiatives aimed at reducing the company's energy usage.

Most of Wal-Mart's new stores use an energy-saving program referred to as daylight harvesting. Skylights throughout the stores let in natural light, and sensors automatically dim or turn off store lighting when there is enough natural light.

Earlier this year, Wal-Mart launched its new high-efficiency store model, called HE-1, which it says will trim energy usage by about 20 percent. The company hopes to design and roll out a prototype store that is 25 to 30 percent more energy efficient by 2009, spokesman Kory Lundberg said.

"The ultimate goal is to be supplied 100 percent by renewable energy," he said.

Wal-Mart also sent out a request for proposals for solar-power generation late last year. The company declined to provide any details regarding its solar plans.

"We're still reviewing that, and hopefully we'll have an announcement to make on that very soon," Lundberg said.