Big Boxes Go Solar
As reported a few months ago, Its coming (finally) – Massive roof-top solar at Big Box Retail. Wal-Mart has expanded an experimental roof-top solar program with an agreement to lease panels and buy the electricity from modules on top of 20-30 stores in Arizona and California. These Big Boxes, whose footprints average 100,000 square feet, are considered one of the most attractive financial opportunities in US markets. The concept is to install the modules and sell the power to the owner/tenant, using the retail electricity price umbrella to capture ‘retail-lite’ prices which are attractive to both investor and customer. This business model is moving forward most aggressively in high cost and/or high subsidy markets, such as California and New Jersey.
Home Depot has already leased about a third of its Canadian ‘rooftop real estate’ to an outside installer, who would then sell power into the grid. Pension funds and retail investors, alike, clamor for high single digit yields from long term sales of green energy to utilities or commercial consumers. Can a solar REIT, with high single digit yield, be far behind?