Why Big Retailers Are Going Solar

Why Big Retailers Are Going Solar

(Fortune) It’s about economics, not just environmentalism.

Years ago, big retailers and tech companies installed solar panels as a way to take an environmental stance. But these days it’s often an economic choice that is fueled by the promise of lower and less volatile energy costs.

On Tuesday, Whole Foods WFM -0.54% said that it planned a huge project to cover nearly one-fourth of its stores with solar panels. After construction is complete, Whole Foods says it could be among the top 25 biggest commercial U.S. solar suppliers alongside Walmart WMT 1.17% , Walgreens WBA -0.25% , and Target TGT -0.15% .

According to a report last year by the Solar Energy Industry Association: “While solar has long been viewed as an environmentally responsible energy choice, businesses now deploy solar because it is a smart fiscal choice as well.” SolarCity workers install solar electrical panels on the roof of a home in Palo Alto, Calif. in 2011. Whole Foods’ global sustainability leader, Kathy Loftus, said in a statement that the move was about “lower energy costs,” among other goals. Whole Food’s global energy coordinator, Aaron Daly, told Fortune that the solar project is about “environmental stewardship while saving money and reducing the power price volatility for our stores.”

Another report from SEIA found that in every quarter in 2015, the average cost of solar systems for commercial businesses dropped steadily. Across 2015, the cost of solar systems for commercial businesses slid by an average of 10% to a low of around $2 per watt by the end the year.

For more about the economics behind clean energy, watch:

Whole Foods is working with solar panel suppliers NRG NRG -2.71% and SolarCity SCTY 1.63% to cover its stores in solar. These companies, which build solar projects for homes and businesses in huge numbers, can provide Whole Foods and others with attractive deals that potentially make solar cheaper than a typical monthly utility bill. These solar deals also fix the rate that companies pay for solar power over time so companies can hedge against a spike in grid prices.

Add in attractive state and federal […]

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