Large facilities, such as warehouses and cold storage facilities, typically run energy-intensive equipment that requires round-the-clock operations. And those high energy costs can wreak havoc on budgets.
But with warehouses and cold storage facilities also having expansive, flat roofing surfaces, that makes them ideal candidates for incorporating solar panels and energy storage into their energy mix.
Solar + storage is a strategic solution for warehouses and cold storage facilities that addresses increasingly high energy costs, regulatory pressure at the local, state, and federal levels, and sustainability demands from the public. Plus, solar benefits for warehouses include reducing expenses and increasing operational efficiency.
Why Warehouses Need to Start Thinking About Energy Costs
America’s investment in solar power and other renewable energy sources is rising dramatically. The market reached almost $93 billion in 2023. On the other hand, electricity prices in California have doubled in the past decade. These skyrocketing costs have increased the cost of doing business for warehouses and cold storage.
Companies that don’t take action will face growing financial impacts as costs continue to soar. They may also find themselves subject to regulatory penalties for noncompliance with mandates. Energy-efficient practices such as going solar can help reduce costs, promote regulatory compliance, and drive more efficient operations.
The Impact of Rising Utility Rates
California not only currently has one of the highest utility rates in the country (with little signs this squeeze will let up in the future), but its state regulators also raised utility rates four times in 2024, driving prices even higher. For energy-intensive industries such as warehousing, utilities can end up being a major driver of budget overruns.
Solar power and energy storage can transform the heat-absorbing capacity of warehouse roofs into a source of energy creation. Operators can use this renewable energy to power lighting, air conditioning, heating and cooling, refrigeration, and other machinery.
The Push for Sustainability in Warehousing
The growing demand for environmentally sustainable practices is another compelling reason to incorporate solar power into your energy mix. Between state regulations, consumer expectations and corporate social responsibility goals, switching to renewable energy sources is a high priority for many companies for reasons that go beyond its cost-efficiency.
Many major corporations are already making the switch. Walmart has a goal of running on 100% renewable energy by 2035. Amazon plans to reach net-carbon zero emissions by 2040. These and other leading enterprises are heavily investing in solar power to reach their sustainability initiatives.
What Are the Benefits of Solar-Powered Warehouses?
Solar and energy storage solutions provide economic, operational, and environmental benefits, particularly with facilities that have the following conditions:
- Large rooftops or available land
- High energy bills
- Perishable food, pharmaceutical, or biotech storage
Reduced Operating Costs
By integrating solar and storage into your energy mix, you can save on overall energy costs by evening out your energy load and avoiding peak usage penalties.
A commercial solar + storage system stores low-cost energy and delivers it during peak periods of higher electricity rates, helping your organization save on overall energy costs and avoid peak usage penalties. And when financed as a power purchase agreement (PPA), you can get the budget certainty your organization needs, helping to predict energy costs for years to come.
Under a PPA, a solar developer will install solar panels on your roof or land, without you having to purchase them upfront. As part of the agreement, you’ll purchase the solar energy they generate at a discounted rate that helps to serve as a long-term hedge against rising utility prices.
Enhanced Sustainability
In addition to meeting your own sustainability goals and commitments, switching to solar power and energy storage allows you to help others fulfill their sustainability initiatives. As the economy becomes more globally connected, each node in the value chain contributes to the success or failure of the others.
To illustrate the environmental impacts throughout the supply chain, businesses use scope emissions as part of sustainability strategies. Scope emissions fall into three categories:
- Scope 1: These are your direct emissions that occur as part of your on-site operations.
- Scope 2: These are the indirect emissions that occur when you purchase electricity for your operations.
- Scope 3: These are the emissions that occur throughout your value chain, such as transportation, distribution, and storage.
On top of generating your own scope 1 and 2 emissions, warehouse facilities are a source of scope 3 emissions for the organizations they provide services for. By improving your scope 1 and 2 emissions with solar energy (and also incorporating solar into fleet electrification plans), you’ll also help to improve scope 3 emissions throughout the value chain.
More organizations are considering environmental, sustainability, and governance (ESG) goals to demonstrate their commitment to the environment and to transparency in business operations. A strong ESG position can help you appeal to investors, attract and retain top-quality talent, and improve employee motivation. Incorporating commercial solar panels and energy storage can play an important role in crafting an effective ESG position.
Improved Energy Independence
Commercial onsite solar energy and energy storage reduces your reliance on the grid and gives you more control over your energy. Some states have started implementing rolling power outages to address electricity shortfalls. For warehouses with critical operations, this benefit is particularly important.
What Solar Programs Are Available for Warehousing & Cold Storage Facilities?
Because decreasing carbon emissions and encouraging renewable energy are societal goods, there are several specific programs and initiatives you can take advantage of that are designed to encourage solar adoption in warehousing.
- WAIRE Program: The Warehouse Actions and Investments to Reduce Emissions requires that warehouses over 100,000 square feet accumulate WAIRE points via emission-reduction measures. It offers incentives for projects such as solar installations that power warehouse operations and charging zero-emission vehicles.
- Net Metering Benefits: Net metering programs allow you to sell your excess solar energy for cold storage back to the grid, which can further offset your energy costs. However, in California, net metering has changed due to NEM3, which reduces the rates for net metering credits. Because of this, you’ll likely generate the most savings by storing your excess solar power through battery energy storage systems. This allows you to bank excess energy generated by your solar panels so you can use it later.
What Businesses Can Expect From Solar Power
If you choose to install solar panels on your warehouse or cold-storage facility with the right developer, you can expect a minimally disruptive installation process and long-term benefits.
- Streamlined process: The right solar developer will understand your business operation needs and realize that you can’t shut down your primary business functions to put in a new system. They’ll work with you to minimize disruptions to your daily operations through efficient project management practices and advanced technology that promotes a seamless transition.
- Comprehensive business sustainability plan: Combining your solar energy system with fleet electrification and other energy-efficient upgrades will help you get ahead of regulatory requirements and give you a competitive edge that will future-proof your operations.
- Long-term savings: With an investment in solar panels and battery energy storage systems, you can expect to see long-term savings on your utility bill as well as predictable monthly payments. Depending on the purchasing option you choose, some solar for warehousing benefits may be immediate. If you go with PPA financing, you won’t have any initial upfront costs, and you’ll realize immediate savings on energy expenses.
Install Solar on Your Warehouse With REC Solar
Solar energy for cold storage opens up cost-saving and sustainability opportunities for your facilities. REC Solar has been a trusted partner for warehouses seeking to transition to solar energy for decades. We have extensive experience in designing, financing, owning, operating and maintaining hundreds of solar and storage projects. We empower organizations like yours to reduce reliance on the grid, better control energy usage, and meet environmental goals.
Reach out today to discuss the best options for your cold storage facilities and distribution centers.