Could Abandoned Strip Malls Be a Boon for Solar Energy?

This is a guest post by Russell Diamond, the founder of Solution Capital Partners, an investment firm that focuses on clean technology and alternative energy solutions.

Over the past 60 years, America’s population has moved out of cities into sprawling suburbia – a move enabled by cheap and available gas. The scarce population of suburbia didn’t lead to more skyscrapers, the embodiment of urban density. Instead there arose an endless supply of low-rise big boxes surrounded by parking lots — the glorious American strip mall. These buildings were constructed to maximize ground floor exposure, giving little heed to energy efficiency. Landlords based dimensions on the premium rent of ground floor retail space. And with cheap energy to heat, cool and transport, carbon footprint wasn’t a major concern.

Now, we’re paying the price for this disregard: As the retail sector contracts, owners may not get the returns per square foot once imagined – and ever increasing energy costs will highlight the error of past building practices.

But there is a silver lining to all those wasteful strip malls, one that can reduce carbon emissions, decentralize power production, shave peak demand, and even turn a profit. The secret is this: Flat roofs make a great staging platform for solar installation. The roof space of a strip mall or supermarket is often empty black space. Converting that space to a power plant maximizes its use, generating revenue from otherwise worthless space. And panels can shade a heat-retaining black roof, reducing the air conditioning load and increasing net energy efficiency.

The economics of solar depend not only on how much sun a location receives, but also how easily a system can be deployed and policies put in place to subsidize deployment. A flat open field is good for erecting solar — but an unshaded flat roof is better.

Meanwhile, the economic incentives for commercial-scale rooftop solar vary by state. New Jersey offers investors the best opportunities, plus it happens to have plenty of flat roofs ripe for the task. Other states with accommodating subsidies include Colorado, Pennsylvania, California and Vermont.

These combined incentives have created an environment where investors are willing to pay for the installation and sell the power back to the host. A building owner need not put up any capital and can still reap an immediate discount on electricity bills, all while enjoying a decentralized source of power generation. Commercial scale solar can also reduce customer exposure to peak utility pricing on hot sunny days when the solar production is strong. This is turn can reduce a utility’s need to build additional infrastructure to accommodate peak demand.

Suburban sprawl has contributed to the problems we face. Deploying rooftop solar on big flat roofs presents an opportunity to derive value from an installed asset.