By Amy Campbell and David Koster
As a self-storage operator, finding ways to save money is among your top priorities. One option coming under greater consideration in the industry is an investment in solar power.
Consumers are becoming more environmentally conscious, so choosing solar not only saves you money in energy use, it can increase your facility’s public appeal. “People like doing business with companies that are environmentally responsible,” says Michael Murphy, head of new project development at Murphy Brothers Contracting, the developer and owner of Mamaroneck Self-Storage in Mamaroneck, N.Y. Opened in October, the facility features a number of green initiatives, including DOW Powerhouse Solar Shingles, which are a combination of roof shingles and a solar-panel system.
Expansive roofs can make solar power a great investment for self-storage operators, particularly those in sunny states. Some facilities generate additional revenue by selling excess power back to their utility company. And the technology has never been more affordable, as municipalities and other organizations continue to offer incentives and rebates.
If you’re thinking about adding solar panels to your new or existing self-storage facility, here are a few things to consider.
Not only is the general community increasingly appreciative of a business that goes green, city governments and some utility companies are encouraging companies to invest in eco-friendly initiatives by offering rebates and incentives to offset the cost of installation. This has made adding solar panels more affordable for many self-storage owners.
Midtown Vault Self Storage in Memphis, Tenn., took advantage of one such program. The facility received a direct tax credit of 30 percent for the cost of its solar-panel system, cutting the price tag from $100,000 to $70,000, according to Michael Haugh, owner and president of Absolute Storage Management Inc. (ASM), the company that developed and operates the facility.
“The federal and utility company incentives made it financially accretive to the property to install the panels. We also wanted to test the system to see if it really worked the way the vendor explained. The good news is that indeed it has worked, and we recently expanded the system,” Haugh says.
A little bit of research can help you uncover what, if any, incentives might be available for your project. The federal government, for example, currently offers an investment tax credit of 30 percent to companies that add solar. There are a number of rebates for sites under construction as well as those for existing facilities. Often your vendor can help you uncover potential savings.
A solar-panel system reduces a storage facility’s utility costs through net energy metering (NEM). Under NEM, a meter tracks how much electricity is consumed by the facility and the amount of excess electricity sent back into the electric utility grid. In some states, operators can even sell that excess power back to the utility company and generate revenue. They can also use it as credit toward future energy use.
This is the case for Greenbox Self Storage, which operates three facilities in Denver. “During the summer months at some of our facilities, we are a net producer of energy, meaning we produce more energy from the photovoltaic panels than we consume from our operations,” says Josh Fine, vice president and general counsel for Focus Property Group, the management company that oversees Greenbox properties. “We send this energy back to the power grid and our electric meter literally spins backward, giving us valuable credit for the winter months when our energy production is diminished because of reduced sunlight.”
The success of its first solar installation led ASM to expand the number of panels on Midtown Vault Storage last summer. The new system covers nearly all of the building’s 12,500-square-foot rooftop. The existing panels, which were installed in 2013, have cut the facility’s electric costs by a third. “Our solar-panel system will cover two-thirds of our carbon footprint and will do so for the next 25-plus years,” Haugh says.
ASM has also added solar panels to properties it manages in North Carolina and Tennessee. “We’ve been happy with the systems. We’re looking out 20-plus years, expecting these systems to continue to produce over that timeframe delivering carbon-free utilities,” Haugh adds.
To receive the full benefits of solar, self-storage operators typically must go through an approval process by a delegated organization of the state. The New York State Energy Research Development Agency, for instance, determines if a New York business qualifies for incentives by making sure panels and usage output reach an acceptable standard. It’s not just the solar system’s functionality that’s taken into consideration, though, but also appearance.
Murphy witnessed this firsthand while building Mamaroneck Self-Storage. The architecture-review board and city officials expressed issues with solar-panel design from an aesthetic viewpoint. “They just didn’t like the way they looked. So it was always a bone of contention when people came before them to put solar panels on their project,” he says.
To appease its opponents, Murphy Brothers decided to use an alternative to traditional-looking solar panels: DOW Powerhouse Solar Shingles. While they carry the same solar-absorbing technology as traditional solar panels, the shingles can be custom-designed to blend better with any roof texture. This decision earned Murphy Brothers the approval it needed to move forward with its solar plan.
AMS also faced obstacles to getting authorization for its solar-panel project. “Getting approved by the Tennessee Valley Authority was a challenge since they have a set amount of dollars they can allocate,” says Haugh, who credits his vendor, Lightwave Solar, for pushing through the red tape and getting the panels installed.
Reaping Long-Term Benefits
While storage operators who add a solar element are generally happy about saving money, there are other advantages to consider. Many are eyeing their global footprint and how they’ll be perceived by the communities they serve.
“When we started the project, we decided that we were going to build it in an energy-efficient manner,” Murphy says. “Because Murphy Brothers Contracting is a family-owned construction business, we believe that building green and simple is building smart. When we saw the solar shingles, we thought this was a brilliant product.” Mamaroneck Self-Storage will achieve 60 percent energy efficiency over an average building of the same size and specifications, Murphy says. “Basically what we want to do is reduce our energy consumption.”
Going green can also bring in new business to a storage facility. “Although we recognize it’s not necessarily the main factor in a customer’s decision, if two sites are similar and one has solar, the one with solar will probably get the tenant,” Haugh says.
Being eco-friendly has paid off for Greenbox facilities. “Because solar energy is aligned with our brand and corporate identity, our solar panels help us convey our values of environmental responsibility to our customers,” Fine says. “We operate our facilities efficiently and in as environmentally friendly a manner as possible. Our environmental responsibility is an important way we become good neighbors to the many types of uses that surround our locations.”
Greenbox also has a monitoring system that shows customers how much energy is being produced from its rooftop solar array and how much is being consumed by the building. The data is displayed on a monitor in the facility offices so customers can see in real time how much energy is being saved.
“We translate this into terms our customers can comprehend, like how many pounds of CO2 each customer is preventing from being released into the atmosphere by renting with us as opposed to a conventional facility,” Fine says. “Our customers appreciate knowing that simply by choosing Greenbox they can reduce their environmental footprint.”
At the end of the day, the decision to add solar is pretty simple, Murphy says. “Want to be energy efficient? Put solar on the roof! Operators should think about what they’re doing, and the impact they have on the environment and the place they live. If they want to show customers they’re environmentally responsible, be energy efficient.”
David Koster is a senior English major at Arizona State University in Tempe, Ariz. His emphasis is on fiction creative writing, pursuing a study of fiction publication and editing. After graduation, he hopes to build his way up to becoming an editor of a fiction-publishing company and publish his personal novel work on the side. To read more of his material, search his name at www.insideselfstorage.com.