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How Green Was My Tally

Companies battle it out to prove that they have more solar panels than their competitors.
Kate Galbraith, CFO Magazine
July 27, 2007

No sooner had Target Corp. announced in April that it had installed solar systems atop 4 California retail stores (with plans for more) than Wal-Mart announced a similar project for 22 of its stores. Last year a nearly identical battle took place in Silicon Valley when Microsoft's boast of having the largest solar array there was trumped by Google's plan to build "the largest solar installation on any corporate campus in the U.S." at its Mountain View, Calif., headquarters.

As companies in all sectors now look for ways to "green" themselves, any return-on-investment analysis of solar power has to include public-relations appeal. Customers respond well to environmental friendliness and seem inclined to punish companies that ignore this priority (see "A Toxic Mess").

The big impediment to solar power has always been cost. A photovoltaic array atop a 100,000-square-foot facility can run $3 million, according to Jigar Shah, CEO of SunEdison, a Maryland- based installer. The price can run even higher for tall buildings, due to safety concerns during installation.

But the spot price for polysilicon, a key ingredient in the panels, is starting to come down, and new financing options may also help. SunEdison offers "nonrecourse financing," in which it pays the installation cost and assesses the customer an annual fee based on the amount of power used. That may prompt companies to install solar at multiple sites rather than a single, image-boosting location.

The financial case for solar is further strengthened by state incentives and a 30 percent federal tax credit. But beware: in some states the rebate will be reduced over time, on the presumption that prices will drop. And despite falling costs, the current price for photovoltaic is more than double that of conventionally supplied electrical power.