Feb 20 2013
Building on its commitment to increase the use of renewable energy resources in the U.S. and throughout the world, UPS has invested in two solar power projects at its distribution facilities in Parsippany and Secaucus, New Jersey that showcase the business benefits of owning and operating sustainable energy systems.
The 1.2 megawatt Parsippany project was completed in the fall of 2012 and the 1.2 megawatt Secaucus project is planned for completion in the spring of 2013. The completion of these projects will expand UPS’s solar power generating capacity from 360 kilowatts to 2,760 kilowatts and will produce in excess of 3 million kilowatt hours of renewable energy per year. The combined power produced from these projects is equivalent to providing electricity for more than 300 homes annually.
Solar Power: A Viable Business Model
At UPS, investment in renewable energy production is subject to a rigorous evaluation for return on investment. UPS has created a viable business model by developing, engineering, purchasing, overseeing construction, and operating the solar panel arrays in-house. By utilizing a direct ownership approach, UPS has uncovered valuable best practices to produce a strong return on its investment in current and future developments. A typical model is to outsource roof space for solar panels to a third-party in return for discounted energy rates for 20 years. UPS decided to finance and build its own solar projects following a drop in solar panel installation costs, continued improvements in the technology and the availability of supportive government incentives.
“Federal and state government incentives encouraged our investments in solar energy sources,” said Steve Leffin, director of global sustainability at UPS. “We develop, engineer, own and operate our solar capacity, which is a departure from contracted power-purchase agreements in which a company pays a solar power provider for a set price of electricity for 20 years. Under this arrangement, we not only benefit at UPS, but can also help community power grids by providing a hedge against possible energy price hikes during peak usage times.”
New Jersey has established incentives for the generation of renewable power that can serve as a catalyst for increasing overall business commitment to renewable energy. The state has one of the nation’s most progressive solar energy policies and is currently second in the U.S. for total installed capacity of solar energy technology.
Community Energy Conservation
The UPS facilities will typically operate during off-peak hours, which allows a significant proportion of the renewable electricity to flow back to the grid in what is known as net metering. This can help to protect against peak demand periods for kilowatt hours which are historically higher in the New York-Northern New Jersey area, especially during peak summer months. It also means that utilities will need to purchase less energy from more expensive distant sources to cover peak periods of demand.
UPS’s Solar-Powered Footprint
UPS’s initial venture into solar power development dates back to 2004 in Palm Springs, California, where solar panels were installed and are still generating approximately 110 kilowatts of sustainable energy. Since 2010, at UPS’s European regional air hub in Cologne, Germany, the company has operated a rooftop solar farm that was commissioned by the airport and is producing 1.2 million kilowatt hours of electricity per year. In 2011, UPS completed the installation of a 250 kilowatt system on the roof of its Lakewood, NJ distribution facility.
For more information on UPS's sustainability initiatives, please review the company's 2011 Corporate Sustainability Report at responsibility.ups.com/Sustainability.