Walmart’s Hawaii Solar Play: Be Green, Save Green

In announcing its three new solar installations in Hawaii, bringing its total in the state to six, Walmart emphasized the environmental benefits, including eliminating 9,600 metric tons of carbon dioxide emissions in the next 10 years.

The company also alluded to expected savings of the monetary variety, and while no specifics were offered, you can bet the investment is worth the while.

Solar increasingly makes sense everywhere, but particularly so in Hawaii. A recent report [PDF] by the Economic Research Organization at the University of Hawaii raised a ruckus with solar advocates because it recommended the state do away with a 35 percent tax credit for solar systems. But lost in the shouting about the tax credit’s fate was the report’s unambiguous conclusion that installing PV in Hawaii is pretty much a no-brainer.

walmart solar hawaii

Part of Walmart’s rooftop solar installation in Kapolei, Hawaii. (image via Walmart)

“In purely economic terms … the rational household decision is to make the PV investment, regardless of tax credit policy,” the study says. It goes on to call PV systems “a lucrative investment,” yielding an internal rate of return of over 9 percent with no state tax credit, and 14 percent under recently adopted rules.

You think the Walmart number crunchers back in Bentonville aren’t aware of that?

Hawaii is particularly solar-friendly because standard electricity rates are so high, the highest in the nation [Feb 2013 EIA Electric Power Monthly, page 122], a result of the state getting about three-quarters of its electricity from imported petroleum.

Walmart said that each of the three new installations – on stores in Kahului, Kailua-Kona and Kapolei – has 311-kilowatts of generating capacity and is expected to produce more than 400,000 kilowatt-hours of electricity per year.

“We are committed to making decisions that are not only good for business and the environment, but also allow us to pass on savings to our customers,” said Rey Armijo, Hawaii market manager for Walmart.

Walmart isn’t solarizing only in Hawaii, however. A report last September from Vote Solar and the Solar Energy Industries Association put Walmart atop the list of U.S. corporate solar adopters, with 65 megawatts of capacity.

As that report noted, “The economics of PV have become so attractive that many of the best managed companies … are adopting solar energy on a massive scale in the U.S.”

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.

    • Jonathan_Justice

      While Hawaii is a pretty obvious lab for ending energy imports, the geography makes the appropriate question with regard to electricity prices more like, “What is the range of utility rates?” Perhaps even island by island. If renewables can deliver the power at lower rates than the utilities currently charge, the case is indeed obvious.

      So is the case for continuing the tax credit program until renewably based electricity is entirely dominant so that Hawaii gets the benefits of early adoption and the planet is not burdened with burning oil to ship oil to the state to burn to make electricity. Once the electricity systems are on a firmly renewable base, it is time to extend it to ground transportation.

      Meanwhile there are very interesting questions to ask about what effect the history of high electricity prices has had on consumption and efficiency.

    • Jonathan_Justice

      The UHERO report shades itself so thoroughly as to be problematical. we are asked to buy into its writers sense of what the problems are without addressing the issues the rest of us might be interested in. The big bad billions in tax revenue lost to the tax credits it wants to worry about are spread out over a whole string of years and would amount to 10% to 20% of the $14 billion state budget if it all hit in a single year. Meanwhile the cost of the PV capacity involved has fallen about a dollar per watt since the report data points were assembled. By reducing capital costs, this change shrinks the amount of tax credit per watt as the process moves forward. The trend was pretty obvious. It also reduces payback time and puts even more money in the postulated homeowners’ hands to spend on local goods and services. If W-M actually does pass some of the savings on its PV systems back to customers that has a similar effect. For UHERO, the question of the value to the Hawaiian economy of not being so dependent on the volatility of the world price of the oil it now uses to generate most of its electricity is somehow not worth bothering about. How sad are we supposed to be that certain oil companies will have less of Hawaii’s money to play with?

      The question of what local electricity rates are is not well covered. The link to IER reports a 2010 average of around 22 cents a kilowatt hour. UHERO hypothesizes about paybacks at rates ranging from 32 cents to almost 45 cents without reporting a sampling of actual local rates.

      • http://www.facebook.com/petedanko Pete Danko

        Jonathan,

        Thanks for your comments. The latest EIA Electric Power Monthly puts the average retail price of electricity for residential end-user in Hawaii for 2012 at 37 cents/kWh. I’m going to change the link to that more current info.

        Pete

        • Jonathan_Justice

          That is a good bit more plausible. Why the rather dramatic jump? If the IER numbers were valid, the jump is more than I pay for a kWh now. How closely does the set of Hawaiian electricity prices track the price of the oil they burn?