Shopping centers set their sight on solar

As part of its pledge to environmentally sound practices, real estate investment trust Macerich is implementing solar across its portfolio of 85-plus properties in 19 states.

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February 09, 2015 |
Shopping centers set their sight on solar

The demand for renewable energy continues to grow. More and more, facility leaders are looking for a way to improve sustainability with large-scale solar programs that establish their environmental commitment and provide matching financial rewards. For professionals managing multiple properties, “going green” at one facility alone can be challenging enough. Implementing renewable energy across a portfolio of properties can seem even more daunting. 

Consisting of 85+ properties across 19 states, Macerich is a fully integrated, self-managed and self-administered real estate investment trust which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. Under the stewardship of Vice President of Sustainability, Jeff Bedell, Macerich continued to fulfill its pledge to environmentally sound practices with the game-changing decision to implement solar across their portfolio.

 

Clearing the Hurdles

The three main hurdles faced by all facility managers when going solar – financing, implementation, and operations and maintenance – were magnified by Macerich’s substantial portfolio of properties.

Tax equity financing in general is extremely complex, requiring customized transactions tailored to each individual project.  Needless to say, creating these unique finance structures for each of the properties served as a main roadblock for Macerich. The question of ownership of the systems was also a major concern.  To take adventage of available tax incentives, given the limited tax capacity of Real Estate Investment Trust (REIT) entitites, third-party ownership was crucial.

 

Twenty Ninth Street Mall, Boulder, CO

In the implementation phase, Macerich was faced with catering to the unique specifications of multiple properties located in a number of states, each with their own permitting and procurement regulations. Some locations had straightforward installation conditions, while others featured spaces that required high-level design and construction expertise. In addition, implementation without interruption to retail business was crucial.

Operations and long-term maintenance of each system posed its own distinctive set of challenges.  While there was no shortage of companies available for operations and maintenance at the beginning of the endeavor, there existed a cavernous lack of companies in which Macerich could trust to be dependable, consistent providers of those services for more than two decades across their national portfolio.

While daunting, Macerich was excited to play the role of pioneer in the sustainable development of large REIT portfolios.

 

The Solar Solution

In response to frustrated expressions of facility leaders managing a broad range of projects, Panasonic, in an exclusive partnership with Coronal Group, developed a turn-key, end-to-end solutions based platform able to directly address finance, implementation, and operations and maintenance concerns.

In 2011, Macerich aligned with Panasonic to begin their REIT power program. With a customized financing structure, Panasonic was able to compensate for Macerich’s lack of tax appetite and support the utilization of the varying federal tax credits and local incentives pertinent to each individual property. Panasonic’s unique comprehensive solution also resolved the issue of ownership, providing the third-party entity responsible for carrying the systems as assets via their relationship with Coronal Group.

With their extensive global network, Panasonic ensured quality implementation for every aspect of each individual project, regardless of location. And, as a nearly 100 year-old, $65 billion company, Panasonic guaranteed its ability to fulfill the 20 year commitment to sustaining expert operations and maintenance of Macerich’s solar systems.

Together, Macerich and Panasonic are nearing the successful installation of solar across 11 shopping centers totaling 10 MW of clean energy – enough power for approximately 10,000 homes.

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