The Potential: Rooftop Solar’s Game-Changing RoleA recent report by RMI reveals that real estate investment trusts (REITs) in the United States oversee a staggering 38.5 billion square feet of rooftops, offering prime real estate for solar panel installations. If fully leveraged, these spaces could generate a whopping 25 percent of the electricity consumed in commercial buildings across the nation, and contribute about 10 percent to the overall American electricity grid.
The Value Proposition: Solar Power for REITsMorgan Stanley’s latest study reinforces the notion that this shift towards solar power not only advances the goal of zero-emissions electricity but also holds immense value for the REIT industry. The report outlines five compelling reasons to adopt rooftop solar installations:
- Existing Infrastructure: Utilizing already developed rooftops and parking lots unlocks value from previously untapped assets, while bypassing many of the regulatory hurdles faced by projects on undeveloped land.
- Optimal Generation Conditions: Commercial buildings, often featuring large, flat roofs devoid of tree cover, provide an ideal canvas for maximum solar energy generation.
- Building Electrification Ready: Solar power aligns seamlessly with the trend towards building electrification, aiding REITs in lowering operating costs while complying with evolving building performance standards.
- EV Charging Offsets: Solar generation can offset the surging power demand from electric vehicle charging, benefiting both tenant-owned fleets and personal vehicles.
- Faster Implementation: By addressing a building’s energy needs internally, solar projects face fewer delays in interconnection, allowing for faster implementation.
Community Solar: A Transformative Solution
RMI suggests that structuring rooftop solar installations as community solar projects not only overcomes these obstacles but also transforms them into community assets. By offering clean and renewable energy to the broader community, these projects have the ability to tap into investor tax credits, significantly bolstering profitability.
Currently, only a handful of states, including New York, New Jersey, Illinois, Massachusetts, Maryland, California, Minnesota, Connecticut, and Virginia, have enacted laws permitting community solar on commercial buildings.
Execution: Making Rooftop Solar a Reality
To bring commercial rooftop solar to fruition, thorough assessments of viability, tenant agreements, and property suitability are essential. RMI advocates for engaging seasoned solar technical advisors and conducting competitive procurement to secure the best partners.
For building owners, the transition to rooftop solar is more than a financial endeavor, it is a crucial step towards reducing the global carbon footprint. RMI estimates that implementing solar on REIT-owned buildings could cut emissions from purchased electricity by a substantial 45 percent.
Morgan Stanley underscores that, to align with net-zero objectives, both non-residential and residential buildings must significantly reduce emissions from purchased electricity. Rooftop solar installations, it argues, are pivotal in advancing progress towards these targets.
Conclusion: Embracing Rooftop Solar for a Sustainable Tomorrow
In conclusion, while the road to commercial rooftop solar may be challenging, the economic and social benefits it offers can be beneficial. This initiative not only enhances the sustainability profile of building owners but may also contribute to a more sustainable and resilient future for communities across the nation.