Spurred by declining solar power costs and an increase in state and federal incentives for adopting the energy source, search-engine giant Google Inc. and other property owners are turning to the sun for their energy needs.
Google's solar installation — featuring 9,212 solar panels — is the largest on a U.S. corporate campus and will be located at the company's 1 million sq. ft. headquarters in Mountain View, Calif. Slated to go on line in the spring of 2007, it will power several office buildings and offset about 30% of peak electricity consumption.
“I think we've reached a tipping point where companies are realizing that you can be both green and profitable at the same time,” says David Radcliffe, vice president of real estate at Google.
The system will save the company more than $393,000 in annual energy costs, or about $15 million over the 30-year life of the system, according to Andrew Beebe, president of Pasadena, Calif.-based El Solutions Inc., which is installing the system.
At that rate, the solar energy source should pay for itself in seven to eight years. It is estimated that with commercial systems priced at $7 to $8 per watt, the tab for the 1.6 megawatt project will be roughly $11 million to $13 million.
The cost of solar systems is now dropping, thanks in part to a boost in manufacturing capacity for solar-power components. In fact, Navigant Consulting Inc. suggests that by 2010, at a projected system price of $2 to $2.20 per watt, the U.S. market for commercial building solar installations could skyrocket to $4.2 billion. By contrast, the U.S. market for solar installations totaled $640 million in 2005.
“I think we're at the beginning stages of some very large commercial installations,” observes Travis Bradford, president and founder of the Prometheus Institute for Sustainablein Cambridge, Mass.
One of the driving forces behind solar power is the system installers who work with companies like Google, says Bradford. Some installers finance the projects and take advantage of tax credits and incentives. Costs are then passed along to the customer, enabling some companies to support solar while keeping capital expenses off the balance sheet.
When corporate users finance installations, the installer sells the kilowatt-hours generated by the customer's system. The customer then buys back the power it needs at a discount.
The key advantage of solar for commercial buildings is that states allow solar users to sell the excess electricity generated to the power grid, Beebe says. Companies can be compensated in the form of credits on their bills for the most expensive peak energy they send to the grid during the day, and can tap cheaper electricity at night when a solar-power system isn't active. In Google's case,rebates are projected to add up to roughly $5.5 million to $6.5 million.
For his part, Google's Radcliffe wants many more companies to become active in solar power and even eclipse his employer, whose new system will produce about 2.6 million kilowatt hours of solar power each year.
Radcliffe is optimistic other pioneers will emerge. “I hope in a year from now that Google will no longer be the largest corporate solar installation in the U.S.”