In a state known for its sunshine, installing solar panels makes sense for companies looking to ease energy bills and benefit the local environment - as long as they're willing to shoulder the high price of solar technology.
But Salt River Project, along with utility companies around the country, offer incentives that are enticing a growing number of companies to install solar panels on their buildings and properties, encouraging growth in the solar industry and allowing companies to reduce overhead and promote a greener image.
Lori Singleton, manager of sustainability initiatives and technologies at SRP, said the number of corporate partnerships has increased as the cost of solar technology comes down and utility companies continue to offer installation incentives for solar energy alternatives.
"More and more companies are looking at energy costs for the future," she said. "By installing solar, they can guarantee what their energy costs are going to be for 20 to 25 years - the life of the solar system."
SPR has helped 163 of its commercial customers install solar panels as part of the utility company's EarthWise Solar Energy program - a total energy generation of 13.2 megawatts.
Solar energy produced by commercial customers may not seem significant in an energy grid supporting 940,000 customers and totaling about 7,800 megawatts, Singleton said. But solar installations can make a big impact for individual businesses.
"Energy prices are increasing and they may increase even further should there be some type of legislation related to greenhouse gasses and renewable energy," she said. "(Costs) are driving companies to really think more about their energy and the way it's generated."
IKEA recently became SRP's latest commercial example by completing the largest commercial solar installation in SRP's service area.
On Oct. 20, IKEA officially plugged in a 75,000-square-foot solar array atop its Tempe store that will generate an estimated one million kilowatt-hours of electricity annually - equal to the yearly energy consumption of 84 residential homes.
The Swedish furniture company contracted with Gloria Solar to design, develop and install the plant, but the project relied heavily on financial support from SRP that helped offset IKEA's investment.
Declining costs in solar technology and continuing incentives from utility companies ultimately prompted IKEA to take the plunge, said IKEA's public relation's manager, Jackie Terry.
"It's a significant undertaking," she said. "We wanted to make sure that the technology was available and it was a more cost-effective avenue to take."
IKEA's decision to join the solar movement also plays into the company's emphasis on sustainable business practices, Terry said. IKEA values the impact projects like the solar plant have on its public image and local customer relations.
"We feel that we're making a good business decision, and people validate it," Terry added.
The Tempe branch is the third IKEA store nationwide to install solar panels. Stores in Pittsburgh and Brooklyn, N.Y., also have finished solar projects. Additionally, IKEA announced plans in October to install solar energy panels on seven stores and one distribution center in California - 90 percent of its presence in the state.
IKEA also plans to pursue other alternative energy sources, including a new store in Centennial, Colo., with integrated geothermal facilities.
Power drawn from the geothermal system will substantially reduce the outside energy required to heat and cool the store, Terry said.
"We believe we can be a good business while doing good business," Terry said. "We're all about designing initiatives that will minimize the impact on the local environment."
Both IKEA and SRP declined to comment on the cost of the solar project or the Tempe store's energy consumption, but customers can monitor the energy output of the plant from a kiosk located in the exit area of the store.
"If IKEA didn't feel this was an investment that was going to give a net-positive result, we wouldn't have invested in such a project," Terry said.
That's the confidence the incentives are designed to inspire, Singleton said. They help commercial customers like IKEA overcome the inertia generated by the cost of installing a solar system.
SRP set aside $32.5 million for solar incentives last year and $17.5 million this year, Singleton said. By using "performance-based incentives," which pay companies based on the energy their solar plants generate over time, SRP can spread the cost of solar projects over multiple years to avoid big budget hits.
But these incentives aim primarily at developing the solar industry in Arizona and won't exist forever, Singleton said. "Policies and incentives have made the market grow," she said. "However, incentives have been set up by utility companies ... with the thought that we were helping to subsidize the industry as it developed its market. Subsidies will not be here forever."