What Solar Company Does Costco Work With?

Costco is one of the largest retailers in the United States, with over 500 warehouse locations. In recent years, Costco has made sustainability and renewable energy a key priority. They have implemented a number of environmental initiatives, such as installing solar panels on store rooftops and selling products that promote energy efficiency.

One of Costco’s major renewable energy initiatives involves partnering with a solar company to provide solar panel installation services. But who exactly is Costco’s solar partner? This article will explore the details of Costco’s solar program and their partnership with a leading solar provider.

Costco’s Commitment to Renewables

Costco has made sustainability and transitioning to renewable energy a key part of its business strategy. According to its Climate Action Plan, Costco aims to reduce its carbon footprint and mitigate climate impacts related to its operations. This commitment started taking shape in 2012 when Costco set a goal to obtain 100% of its power needs from renewable sources.

A major part of achieving this renewable energy goal involved installing solar panels on Costco warehouses and other facilities. Costco began installing solar in 2007 in California and Hawaii. By 2015, Costco had solar arrays at over 100 sites in 8 states and Puerto Rico. Currently, Costco has solar at over 250 sites, making it one of the largest commercial solar users in the U.S.

Beyond on-site solar, Costco has signed multiple virtual power purchase agreements that enable the development of large-scale solar and wind farms across the country. These initiatives allow Costco to offset a substantial portion of its energy use with renewable sources.

The Challenge of Installing Solar

Big box stores like Costco face several challenges when it comes to installing solar panels. One major challenge is having enough roof space. As reported by CNN, big box stores need massive roof areas to accommodate all the solar panels needed to generate significant electricity. For example, a 200,000 square foot store would need around 100,000 square feet of roof space for a solar array.

Another challenge is the logistics involved. Installing commercial-scale solar panels on big box store rooftops requires significant coordination, permits, equipment rentals, and labor. As highlighted in a report by Environment America, it can take months to years to fully install a large rooftop solar system.

The upfront costs are also very high, often millions of dollars depending on the size of the solar array. Big box retailers have to weigh the long-term energy savings against the initial capital expenditure. Many rely on third-party solar providers to finance and operate the rooftop solar installation.

Why SolarCity Got the Deal

SolarCity was founded in 2006 in San Mateo, California by brothers Lyndon and Peter Rive. The company is led by CEO Lyndon Rive and their cousin, chairman Elon Musk who is also the CEO of Tesla Motors (1). SolarCity is the leading residential and commercial solar provider in the United States. They have installed solar panels on the homes and businesses of over 300,000 customers across the country. As of 2018, the company claims to have a 34% marketshare of the residential solar market (1).

SolarCity has partnered with major retailers across the United States to install solar panels on their stores and distribution centers. In 2016, SolarCity announced deals with Walmart and Costco to put solar on over 240 stores, making them two of SolarCity’s largest retail partners (1). They also installed solar systems at Amazon warehouses in California, New Jersey, and Nevada (2).

With their experience installing commercial solar systems on large retail chains and warehouses, SolarCity was a natural fit for Costco’s solar expansion plans. Their scale, track record with major retailers, and visionary leadership made them well-positioned to partner with Costco.

Sources:

(1) https://en.wikipedia.org/wiki/SolarCity

(2) https://www.greenbiz.com/article/solarcity-nrg-snag-whole-foods-deal-commercial-solar-heats

The Costco-SolarCity Partnership

In 2014, Costco announced that it had selected SolarCity as the preferred solar partner for its stores and corporate offices. This established a partnership through which SolarCity would finance, install, and maintain solar panels on Costco buildings across the United States.

Through this deal, SolarCity aimed to install solar at up to 60 Costco locations over the next 2-3 years. The installations ranged in size from 130 kW to over 1 MW. Some of the early Costco stores to receive SolarCity solar panels included locations in Lancaster, Palmdale, Richmond, and San Jose, California as well as stores in New Jersey, New York and Arizona.

The partnership enabled Costco to utilize solar power without any upfront investment. SolarCity handled the financing, installation, permits, and maintenance of the solar panels. Meanwhile, Costco agreed to purchase the power generated from the panels from SolarCity at a lower rate than their utility rates.

This first set of installations was part of a larger goal for Costco to eventually have solar panels on over 100 warehouse store locations across the United States. The partnership with SolarCity enabled the company to make significant progress towards their renewable energy goals.

The National Solar Program

In 2014, Costco announced a partnership with SolarCity to install solar panels on Costco warehouse rooftops across the United States. The goal was to install solar at up to 130 sites in a massive solar expansion project spanning multiple years (Costco, 2014).

By 2020, Costco had installed solar panels at over 100 locations in partnership with SolarCity. In total, Costco has over 150 solar arrays across its sites, generating a total of 246 megawatts of power. The solar installations cover around 20% of Costco’s operations electricity needs nationwide (Costco, 2022).

The partnership with SolarCity allowed Costco to significantly expand its use of solar power across its operations. By leveraging SolarCity’s expertise in designing and installing solar systems, Costco was able to quickly roll out solar to numerous warehouse rooftops over a multi-year period. The large-scale national solar program has increased Costco’s renewable energy usage and helped improve the company’s sustainability.

Financial Benefits

One of the key reasons Costco partnered with SolarCity for its solar installations was the projected energy cost savings and return on investment.

According to one analysis cited in the New York Times, Costco was able to reduce its electricity costs by 10-30% by installing solar panels on its store rooftops. The solar installations paid for themselves within 4-7 years thanks to these energy savings.

For a company like Costco with hundreds of large-format stores, these savings added up quickly. Costco estimated it could save tens of millions of dollars over several decades by utilizing solar power across its stores.

The return on investment and long-term cost savings from solar energy was a major factor that led Costco to partner with SolarCity and develop an extensive national solar program.

Improving Sustainability

The solar installations at Costco warehouses and other facilities help the company work towards its renewable energy and emissions reduction goals. According to the Solar on Superstores report, the solar arrays installed at just 39 Costco locations in California will generate enough clean energy to offset the greenhouse gas emissions of over 10,000 homes annually (SolarCity). The solar projects are estimated to produce over 50 megawatts of renewable energy capacity, which will enable Costco to offset over 17,000 tonnes of CO2 emissions each year based on average emissions factors (CAE). By switching to solar power, Costco aims to reduce its dependence on fossil fuels and shrink its carbon footprint across operations.

Costco has stated a goal of obtaining 100% of its energy needs from renewable sources like solar. The partnership with SolarCity is helping the retailer make significant progress towards this ambition. As the SolarCity installations multiply to hundreds of Costco sites nationwide, the emissions reductions and energy cost savings will keep accumulating as well. Embracing solar supports Costco’s commitments around environmental stewardship and reducing its climate impact. It also helps the company respond to rising consumer demand for brands that prioritize sustainability.

Recognition and Awards

Costco and SolarCity have both received recognition and awards for their national solar partnership. In 2016, SolarCity won the Top Solar Project of the Year award from Solar Power World magazine for completing the Costco solar program. This award highlighted the innovative partnership and impressive scale of installing solar on over 140 Costco locations. Additionally, the Costco solar program was praised by the Solar Energy Industries Association (SEIA) for pushing boundaries in commercial solar and being an industry leader.

On an individual project level, the Costco solar installation in Tucson, Arizona was recognized by SEIA as a top commercial solar project. It features a 1.1 MW single-axis tracking system that offsets 20-25% of the facility’s energy usage. Both Costco and SolarCity have been widely recognized for their commitment to adopting renewable energy across the company’s expansive retail footprint.

Conclusion

In summary, Costco partnered with SolarCity to install solar panels on the roofs of hundreds of its warehouse stores across the United States. This partnership allows Costco to generate much of its own electricity from a renewable source, solar power. As one of the largest retailers in the world, Costco’s commitment to adopting solar energy sends an important message about the viability and benefits of renewable energy. By working with SolarCity, a leading residential and commercial solar provider, Costco was able to take advantage of their experience and scale to install solar nationwide in a cost-effective manner. This solar program has reduced Costco’s dependence on non-renewable energy sources, lowered its carbon footprint, and provided an additional revenue stream through the sale of solar power back to the grid. Other major companies would be wise to follow Costco’s lead in embracing solar and other renewables. In the end, to answer the original question, the solar company that Costco works with is SolarCity. This partnership allows Costco to benefit from solar power while supporting wider adoption of renewable energy.