ProLogis, one of the world’s largest real estate management companies, has discovered that it can make money, not just from the covered storage space inside these warehouses, but also from their rooftops . Since 2009, ProLogis has been installing solar photovoltaic cells on the roofs of their properties. In recent months they have announced individual projects in California, Portland and in Spain with power generating capacities in the 2 MW to 11 MW range.
This week they have announced a dramatic shift from such individual projects to a US wide project to install solar photovoltaics on the rooftops of 750 buildings to generate 733MW of power. This project, named Project Amp, is to be completed in 4 years and will cost $2.6 billion. The buildings identified are across 28 states and the District of Columbia. Founded in 1989, NRG owns and operates over 24,000MW of power generation plants , mainly in the US, but also plants in Germany and Australia. NRG Energy is a major investor in this project. It has formed a subsidiary NRG Solar that is developing and building a large number of Photovoltaic plants around the US.
The project has already tied up its funding. Bank of America’s Merril Lynch unit has committed $1.4 billion of loans and US Department of Energy has committed to another $1.4 billion. The Department of Energy has included this project under the “Sunshot Initiative” that is a national collaborative project to reduce the cost of solar generation by 75% by the year 2020 so that solar energy costs can get to under 6c/kWh without government subsidy. To put the size of this project in perspective, this project aims to install 733MW of solar power, which is close to all the solar power installed in the US until 2010.
Construction of the first phase of the project has already begun, it incorporates a 15.4MW installation in Southern California.The advantage of a single large project, in place of multiple small projects is clear. It will enable ProLogis and NRG to develop standardized designs, common installation practices and give them enormous muscle with suppliers to drive costs down. In the past, such photovoltaic projects were installed to supply captive power to the premises, where it installed. In this project, all of the power will be sold to utilities under a common power purchase agreement. This helps the bankability of this project.
ProLogis leases and manages over 3500 warehouses with some 600 million square feet of space. Over 400 million square feet of these are in the US . As this project develops , we should expect to see ProLogis expand the project to more buildings. We should also expect other people who own or manage such large covered real estate to think of such projects.
Via: Green Bang
