Walmart’s Approach to Renewable Energy

By David Ozment
May 8, 2014
Solar Panels

We’ve talked a lot about our renewable energy goals and progress, but what does it really mean? Well, to put it all into context, we have 335 renewable energy projects in operation or under development around the world. Between those new projects and the renewable energy we get from the grid, 24 percent of our electricity needs worldwide will be met from renewables.

You would probably never think of us this way, but Walmart is actually the largest on-site green power generator in the U.S., according to the EPA. But we're overachievers, so we always want to take it a step further. So, we’ve developed our renewable energy activities with three core objectives in mind: to develop and install new energy projects at scale; to drive down the cost of renewable energy; and to secure cost-effective, stable energy pricing that meets or beats utility power pricing.

One of the ways to stabilize pricing is through long-term power purchase agreements (PPAs). Under PPA agreements one of our renewable energy providers owns, installs, and operates the systems, and Walmart agrees to buy the renewable power they produce over a long period of time — usually five, 10, or even 15 years or more. It sounds a bit confusing but basically it means that we have control over an operating expense as there is price certainty for a portion of our energy expense over the term of the PPA. The project developers benefit because PPAs provide a predictable source of income.

PPAs can sometimes be tricky because Walmart and other big energy buyers need more market freedom to approach renewable energy developers directly for large-scale offsite projects rather than go through the utility. But we’re actively working with policy-makers to find a solution that works for all parties involved.

As you can see, we’re as committed as ever to renewable energy and making a change in the way we do business so that it benefits the environment. You can read more about it in a whitepaper on the topic here.