Alternative Energy: Walk Before You Run

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January 19, 2012

By Jesse LaRose

Kohl’s Department Stores is widely recognized as a retail leader in nearly all aspects of sustainability. They are an award-winning partner of several U.S. Environmental Protection Agency (EPA) programs, but one area where Kohl’s has pulled away from the rest of the pack is in its alternative energy program.

Kohl's Laguna Niguel, Calif., solar installation.

If energy efficiency is walking, then green power is running -- and running really fast -- at Kohl’s. In 2011, the company generated and purchased 1.4 billion kilowatt hours of renewable energy, which is 101 percent of its total energy usage. As a result of this commitment, Kohl’s has been named the Green Power Partnership, Partner of the Year for the past three consecutive years by the EPA.

Kohl’s earned these awards by successfully implementing both key aspects of a world-class alternative energy program:

• On-site generation: The alternative energy source (e.g. solar panels or windmills) is on the grounds of the facility it is powering; and
• Purchasing: Either Renewable Energy Certificates or electricity from a local provider offering a green power product.

John Worthington

“Becoming an energy efficient company is a journey and not something that is completed overnight,” said John Worthington, Kohl’s chief administrative officer. “All companies, large or small, must start by understanding and managing their energy consumption data. Once the data is measured and controlled, make improvements through energy efficiency projects that you can do really well that have a measurable impact. By providing positive energy reduction results, you can save money while gaining the support of senior leadership for future efficiency projects and incorporate renewable energy into your portfolio.”

For example, by simply upgrading one store’s energy management system, it is now using 13 percent less energy than in 2008. By enacting similar energy efficiency measures with targeted, predefined payback periods across the chain, Kohl’s demonstrated an understanding of the strong links between energy efficiency, corporate responsibility and cost savings. By implementing energy efficiency programs that make sense for the retailer and the environment, Kohl’s estimates it prevented nearly $50 million in electricity costs between 2006 and 2010.

Set Audacious Goals
Worthington believes a shared company wide commitment from the most senior levels of the company is key to becoming a leader in sustainability. Kohl’s has one of the most ambitious retail goals -- to remain carbon neutral through the end of 2012.

Kohl’s initial solar efforts began in California in 2007. “Now, Kohl’s currently has more than 100 solar locations in nine states with plans to continue to expand where it is feasible, profitable and provides a cost savings to Kohl’s,” said Worthington.

Projects largely depend on policy support at the state and federal level. Over time, Worthington believes decreasing costs of solar and increasing costs of conventional energy will make solar economically feasible in many other locations. In 2011, Kohl’s launched its first three wind powered locations and is reviewing opportunities for additional rollouts this year.

Leverage Partnerships
Kohl’s works with a wide variety of partners nationwide to execute its programs successfully. These relationships, along with a strong commitment from associates in planning, constructing and operating stores, have assisted Kohl’s achieve its energy efficiency goals, according to Worthington.

Below are the types of organizations Kohl’s has partnered with:

• A utility billing consolidation company to provide structure to measure its energy usage and corresponding operations data;
• The EPA’s Energy Star for Commercial Buildings program to monitor and measure energy usage to help prioritize investment;.
• A building automation systems provider with technical resources to support energy efficiency programs;
• A solar service provider for a 20-year term, where the SSP owns, operates and maintains the system, and Kohl’s hosts the system at its stores and purchases the electric output for the 20-year term, requiring no capital outlay; and
• The Green Power Partnership program, which provides Kohl’s with technical assistance, green power education, recognition and green power purchasing guidance.

Achieving alternative energy goals can be challenging, even with the right partners. And unlike energy efficiency programs, it isn’t for all companies. As a value-oriented retailer with more than 1,100 big box department stores, Kohl’s has demonstrated that building a leading alternative energy program is not just for niche companies where sustainability is a key aspect of the brand or for those with a small footprint.

As Worthington said, success does not happen overnight, but by following a similar path any company can become more sustainable and profitable by embracing energy efficiency and green power.

Jesse LaRose is the President of ESE Solutions, a sustainability consulting firm that helps retailers achieve their environmental goals while reducing expenses. The U.S. EPA has contracted with ESE Solutions to provide enhancements and publicize the resources of its Retail industry Portal. Jesse can be reached at jesselarose@esesolutions.com.

Read These Related Articles:

• Sainsbury's Rolls Out Ambitious Solar Power Program
• Ikea Plugs in Minnesota's Largest Solar Array
• Ikea Turns on Solar Power at Five More Stores
• Big Box Retailers Top U.S. Commercial Solar Users List
• Ikea Plugs in Solar Power at Savannah Distribution Center

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