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Can Rooftop Solar Save the World?

The impact of climate change was laid bare in 2023. It was the hottest year on record and the ten warmest years in the last 174 have all occurred in the last decade. Climate investment is attempting to rise to the occasion – investors poured $1.8 trillion into the energy transition globally, a 17% increase from the prior year. Still, the impact of climate change is clear, and capital deployment needs to accelerate in order to meet any of the stated energy transition goals at any level. Large, flat rooftops across America’s commercial and industrial (C&I) segment present a promising solution. 

Installing solar panels on industrial rooftops provides an opportunity to bring meaningful chunk of clean energy generation online. Rooftop solar currently produces 1.5% of US electricity consumption, up tenfold from 2012; although this is a significant increase, there remains a large opportunity for growth. Environment America reports that widespread installation of solar on residential, commercial, and industrial properties could result in rooftop solar generating up to 45% of all electricity currently used in the United States. If all qualifying REIT real estate assets added panels on their rooftops, the amount of energy generated would make up 25% of commercial consumption. Large, flat warehouses roofs could produce enough electricity to serve their own consumption, leaving 80.14TWh available to the grid. Industries such as furniture, textiles, metal, apparel, and printing could generate enough electricity through rooftop solar to power their operations.  

Most industrial rooftops are flat and uncovered, creating ideal conditions for installation. Developers are not required to acquire land or work through burdensome siting and permitting requirements. Prioritizing onsite generation also mitigates significant interconnection delays that plague renewable deployment across the US. On top of it all, rooftop solar installation creates meaningful value for customers. Leasing rooftops to project developers creates an opportunity for landlords to increase net operating income (NOI). At the same time, onsite generation from rooftop arrays have the potential to reduce the cost of electricity. Commercial customers could see a 9% reduction in electricity costs relative to purchasing utility electricity in 2025 by installing rooftop solar. When coupled with battery storage, there are additional opportunities to generate income and reduce costs by participating in virtual power plants or providing ancillary services. 

When considering the challenge ahead to combat climate change, the empty, flat rooftops in America’s commercial segment are a valuable resource. Unlocking this resource will be a massive uplift in the energy transition. 

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