With ProLogis entering into an agreement to lease roof space to Southern California Edison for photovoltaic panels, the possibilities of other companies adopting the concept is imminent.
"We've heard from utilities in different parts of the country, asking for details about the project and what vendors we're going to use," Edison spokesman Gil Alexander said. "We have heard from numerous corporations who own these types of buildings and want to take part."
"It is reasonable to assume this program will create some offspring," he said.
In the initial phase of the program, Edison will lease 607,000 square feet of roof space at ProLogis' Kaiser Distribution Park in Fontana.
The area will be used to install and maintain solar panels with the potential to generate enough electricity to power 1,426 households.
The startup phase will include an additional five to 10 installations and should be completed by the end of this year.
Edison intends to build 50 megawatts of solar panel installations each year for a total of 250 megawatts.
The projected total cost of the project is $875 million.
Each individual installation is expected to comprise one to two megawatts.
All energy harnessed from the installation will flow into the neighboring electrical grid and help meet Southern California's energy needs. Edison's goal is to have the first panels operational in time for this summer and five megawatts installed by the end of the year.
Following the first year, Edison's goal is to have 50 megawatts installed every year with the project completed in five years.
"We chose this building in Fontana precisely because it's very large; it's a distribution warehouse where there is very little demand for power on the inside," Alexander said.
"It's valuable Southern California real estate," he said. "You would be hard-pressed to buy two square miles in Los Angeles, San Bernardino or Orange County but there it is sitting there."
Both Edison and ProLogis hope the project will have a positive effect on the cost of solar panels.
"One of the great things about the program for solar is it should drive down the cost of panels for everyone," said Drew Torbin, manager of sustainability for ProLogis.
"This will be the largest order anyone has ever placed. If you buy in bulk, you get a better price," Alexander said.
The number of photovoltaic panels Edison will install might induce a supplier to build a facility in the area to meet the demand, thus creating more local jobs.
"There are specific manufacturers that already have that capability in place," said Mo Rousso, president of Temecula-based HelioPower, a solar power integrator. "That doesn't mean Edison isn't looking to attract one in the area; I don't think there is one in the area."
Sharp, Mitsubishi and Evergreen Solar supply HelioPower's panels, Russo said.
Edison has yet to choose a supplier, but Alexander said the utility is in "intense negotiations" with several vendors.
ProLogis alone has 41 million square feet of rooftop space in Edison's market, Torbin said.
The facility benefits from being in the heart of the city as opposed to outlying desert land, eliminating the need for a transmission line and avoiding the zoning issues a transmission line would create.
"You don't have the expense of the transmission line, the time required for the transmission," Alexander said. "You don't have to work through what might be homeowners' property concerns, people who understandably are worried about having new transmission power across the street from their house."
The project will supplement existing and future transmission lines, such as the Tehachapi Renwable Trasmission Line, rather than replace them due to the staggering amount of energy needed in the region.
"We serve a very large area with large energy demands and in order to access even larger amounts of renewable energy we have no choice but to go to remote regions where there are unusually large amounts of wind, geothermal resources, geysers and solar," Edison's Alexander said.
The current record peak demand by Edison customers was 23,000 megawatts last July, Alexander said.
"That's part of the permitting process that takes up some time," he said.
While Edison may be one of the first companies to lease rooftop space for the purpose of solar panel installation, Alexander said it is not concerned with other companies that might copy the model.
"We're one of the few businesses who say we're really looking for ways for our customers to use less of what we sell," Alexander said. "The reason you hear that in Southern California is regulators wisely separated the returns investors would make from the amount of power sold."
"If you disconnect those two, the utility doesn't have a financial incentive to use more energy," he added. "If we do this and it sets a model and other people do it and its less opportunity for us to installs solar, that's fine."
ProLogis is the world's largest owner, manager and developer of distribution facilities with operations in 118 markets across North America, Europe and Asia. Leasing rooftop space for solar panels was not what Prologis envisioned when it acquired the Fontana property years ago following a merger with Catellus but the prospect is definitely appealing.
"It's a new way of creating additional value," Torbin said. "Catellus was brought about through old railroad companies that found themselves with a surplus of land and sold it."
"We happen to be a developer with a lot of roof space and this program helps us," he said. "Just like the railroaders, I doubt anyone at ProLogis contemplated leasing solar space but here we are."
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