The Home Depot Sustainability Approach, with Craig D’Arcy and Craig Noxon, Ep #4

10/11/19 • 47 min

One of the high profile corporate renewable energy initiatives in the news recently has been the unveiling of Home Depot’s sustainability goals. Home Depot is among the increasing number of corporations working to make renewables a significant part of their energy procurement strategy. But for Home Depot, this new direction is not fueled by a desire to become sustainable, it began because it makes financial sense.

On this episode of Beyond The Meter, join host John Failla and his co-host Craig Noxon, Vice President for Enterprise Sales at REC Solar, a Duke Energy Renewables Company as they speak with Craig D’Arcy, Director of Energy Management for Home Depot. You’ll learn how Home Depot started its journey toward the use of renewables, how early successes encouraged further efforts, and how both the financial and efficiency benefits of using renewable energy has motivated them to keep innovating. The Home Depot approach is a great example of how corporations can make use of renewables and increase the bottom line at the same time.

Outline of This Episode

[1:05] The background and role of each participant in regards to renewable energy
[3:25] Home Depot’s energy management strategy: key elements
[5:41] The primary drivers for the Home Depot strategy
[8:13] Comparing Home Depot’s approach to the work other companies are taking
[11:56] Technologies Home Depot has employed, renewable energy and otherwise
[16:57] The role renewable energy plays for Home Depot
[20:42] Which programs are most important to Home Depot (on-site or off-site)?
[25:11] The challenge of getting stakeholders aligned toward renewable energy
[27:50] Tips for those trying to get the attention of the C-suite for sustainability efforts
[29:35] Advice about how to enlist the financial teams to help make the case
[32:36] What’s next for Home Depot’s energy management strategy?
[35:54] The challenges of energy providers in light of renewable energy innovation
[40:36] Energy as a service concepts: Do they work for large companies?

Home Depot’s energy policy goals made renewables a viable option

There are typically three drivers behind a corporation’s consideration of renewables as an energy source. The first is cost, the second is the company's conscious sustainability goals, the third is increased resiliency. Craig D’Arcy says there is no doubt that all three play some role in Home Depot’s approach, but the first attempts to roll out renewable energy projects were entirely focused on the financial benefits. Renewables simply made financial sense for increasing efficiency and bottom-line profitability.

As early successes with renewable projects were achieved, they were able to investigate other options and expand their efforts toward sustainability. It's led to their sustainability story becoming public, which has driven internal excitement and created momentum for the renewables side of their energy procurement strategies. Listen to hear how Home Depot continues to consider all sorts of energy solutions, including any renewable sources that make sense for their broader goals.

3 critical elements of the Home Depot sustainability approach

When thinking of the renewable energy movement, it’s common to assume that those pushing for the use of renewables are only concerned about global issues of sustainability, but there’s incredible motivation to implement renewable energy alternatives from a variety of standpoints. In the case of Home Depot, three primary concerns guide their energy decisions...

1 - Foremost, Home Depot views everything they do through caring for their stores so that associates and customers are served well

2 - Every energy sourcing project must make sense financially

3 - Leadership has passed down a mandate to be as innovative as possible to accomplish those first two, which makes their decision-making technology and structure agnostic

Listen to hear how this plays out for Home Depot as Craig D’Arcy explains the fit renewable energy has in that three-pronged approach.

Sustainability efforts are significant for Home Depot's future

No company can survive if it is not profitable. Home Depot is no different, so it is no surprise to find out that from a financial standpoint, renewable energy is being leveraged to lower the net rates paid for energy throughout the company. But the benefits of renewable energy go far beyond that...

Home Depot has become known as a sustainability brand, recently releasing its own science-based targets for its energy policy, which includes renewable energy as a significant part. And finally, renewable energy provides natural, beneficial hedges against volatile energy pricing in the markets. Power Purchase Agreements with energy providers enables this hedge and has proven to be a huge benefit to the compa...

Outline of This Episode

[1:05] The background and role of each participant in regards to renewable energy
[3:25] Home Depot’s energy management strategy: key elements
[5:41] The primary drivers for the Home Depot strategy
[8:13] Comparing Home Depot’s approach to the work other companies are taking
[11:56] Technologies Home Depot has employed, renewable energy and otherwise
[16:57] The role renewable energy plays for Home Depot
[20:42] Which programs are most important to Home Depot (on-site or off-site)?
[25:11] The challenge of getting stakeholders aligned toward renewable energy
[27:50] Tips for those trying to get the attention of the C-suite for sustainability efforts
[29:35] Advice about how to enlist the financial teams to help make the case
[32:36] What’s next for Home Depot’s energy management strategy?
[35:54] The challenges of energy providers in light of renewable energy innovation
[40:36] Energy as a service concepts: Do they work for large companies?

Home Depot’s energy policy goals made renewables a viable option

3 critical elements of the Home Depot sustainability approach

1 - Foremost, Home Depot views everything they do through caring for their stores so that associates and customers are served well

2 - Every energy sourcing project must make sense financially

3 - Leadership has passed down a mandate to be as innovative as possible to accomplish those first two, which makes their decision-making technology and structure agnostic

Listen to hear how this plays out for Home Depot as Craig D’Arcy explains the fit renewable energy has in that three-pronged approach.

Sustainability efforts are significant for Home Depot's future

Previous Episode

Renewable Energy Sourcing In Higher Education, with Wolfgang Bauer and Scott Therian, Ep #3

The use of renewable energy is becoming more and more common on campuses of higher education across the country - and it’s not surprising. Institutions of higher education are both massive consumers of energy and are in the business of learning and teaching. That combination makes them ideal laboratories for innovation and advancement in the field. This episode features two guests, Wolfgang Bauer and Scott Therian who are both uniquely positioned to speak on renewable energy sourcing and adoption as it relates to higher education.

Wolfgang is Associate Vice President for Administration at Michigan State University. His expertise is in renewable power systems integration, micro-grid management, energy efficiency, and sustainability. Scott is Project Development Manager at REC Solar. He has spent the last 9 years in the solar industry after getting his education in electrical engineering with a focus on power systems, energy conversion, and renewable energy sources.

Join these two renewable energy experts and host, John Failla of Smart Energy Decisions for this intriguing and insightful episode.

Outline of This Episode

[1:05] What are the drivers for renewable energy sourcing in higher education?
[8:02] How renewable energy fits into the energy sourcing of many colleges
[18:09] Why are universities moving slowly on renewable energy sourcing?
[26:42] Will higher education institutions accelerate the adoption of electric vehicles?
[29:52] What is happening in universities by way of innovation to drive renewable energy adoption?
[39:27] Final comments about the topic from Wolfgang and Scott

University campuses are huge energy consumers. Is it possible for them to use renewable energy?

Most universities are strategizing around the use of renewable energy, both in terms of how to use more renewable energy for current needs, and how to increase the use of renewable energy through establishing their own sources of RE in the future. But there are many variables that either support or hinder the adoption of renewable energy in these institutions. One advantage is that universities are long-standing institutions, which provides stability and inertia that can be leveraged toward multi-year contracts with renewable energy companies. But other factors can make the adoption of renewable energy difficult. For example, many land grant institutions have the advantage of developing their own sources of renewable energy, while urban universities have less opportunity to do so.

What are the drivers for adoption of renewable energy in higher education?

For institutions of higher learning, as well as other large organizations, a choice no longer has to be made between environmental sustainability and fiscal sustainability. Both can be a reality. The levelized cost of large scale solar and wind power is now lower than that of fossil fuel generated power - even with the historically low cost of natural gas that has resulted from Fracking. For this reason, cost is a significant driving factor for the adoption of renewables at universities.

But also, due to political pressure, more and more universities are making progressive pledges that put them at the forefront of the renewable energy stage. They want to be seen as leaders in this innovative and future-oriented field. As a result, many universities are entering into cooperative agreements with public sector organizations to bring the reality of renewable energy on campuses to life. Listen to hear more drivers for the adoption of renewable energy at these institutions.

Renewable energy sourcing is not something universities are used to doing

The adoption of renewable energy is challenging for universities because it’s not like any procurement the administration is used to doing. In the past, energy needs would simply be procured from the local utility company. But the marketplace has changed and now schools have many options for meeting their energy needs. And the transition from old energy models to renewable energy involves complex projects that require much foresight and planning, which often gets bogged down in committee.

But many universities are beginning to move in the right direction - restructuring their administration to take energy needs into account with the creation of administrative positions such as Director of Sustainability or Director of Energy and Utilities. As well, the use of third party consultants is becoming more commonplace since most universities don’t know exactly what they need when it comes to renewable energy. Consultants can help the institution get through the decision-making process in an informed way so they can more quickly lay out exactly what they need. This facilitates the bidding process to get adoption projects underway.

The complex and multi-faceted needs of universities are driving innovation

The fact that higher ...

Next Episode

How Energy Providers Like Duke Are Leading The Way, with Doug Esamann and Chris Fallon, Ep #5

As one of the largest energy providers in the United States, Duke Energy is positioned to make a significant impact on the move toward renewable sources of energy. Duke provides electricity to 7.7 million retail customers in six states. While some might see the renewable energy movement as a threat to a company like Duke, its leadership sees renewable energy as the future of energy providers across the nation.

As a result, Duke’s commercial business owns and operates diverse power generation facilities in North America, including a growing portfolio of renewable energy assets. The company is leading the way with the modernization of its energy grid, generating cleaner energy to create a smarter energy future for customers. This conversation features Doug Esamann, Executive Vice President of Energy Solutions at Duke and Chris Fallon, Vice President of Duke Energy Renewables. Listen to learn how energy providers like Duke are positioning themselves to serve customer needs through renewable energy.

Outline of This Episode

[1:10] The background and involvement Doug and Chris have in energy utilities
[4:00] Duke Energy’s history in renewable energy procurement
[7:41] In deregulated markets, Duke has been very active. Here’s how
[9:16] The role renewable energy has played in the company overall
[13:10] How Duke communicates with customers regarding renewable energy
[18:20] A wide range of customers in renewable energy projects
[24:56] The biggest obstacle for Duke’s renewable energy projects: uncertainty
[29:35] Why Duke is bullish about renewable energy
[34:40] How the “Energy Integrator” concept impacts the approach of utilities like Duke

The renewable energy story at Duke begins with commercial business

The leadership at Duke energy could see the writing on the wall as more and more states were becoming focused on renewable energy in the development of legislated energy standards. It meant a change for the way Duke creates and supplies energy to its customers, but the team was ready to respond.

Renewable energy at scale was a natural fit for Duke to consider as it sought to offer utilities to municipalities and cooperatives who were under the requirements to meet renewable standards. At first, justifying the investment in renewable options was difficult from a price perspective but the company’s leadership was committed to sustainably growing the business. As costs have come down in regulated markets and tax credits have made renewables competitive with traditional options, Duke has looked to replace coal plants and other carbon-free options with cleaner forms of energy.

Balancing profitability with customer needs and CO2 emission goals

Traditionally, energy suppliers like Duke have looked for opportunities of a long-term nature that allow the company to build out a power plant or facility and be able to rely on a return on that investment coming back over time. While not the same thing structurally, renewables allow customers with good credit history to provide a similar long-term opportunity for Duke through longer-term contracts. This provides the same secure deal structure but allows Duke to vary its supply chain considerably.

At the same time, renewables present an opportunity to couple investments in new generation sources of energy with the company’s CO2 emission reduction goals. Duke’s current goal is to reduce its carbon emissions by 40% by the year 2030. Its efforts have been so encouraging there is consideration within the company of shooting for an even larger CO2 reduction. Duke’s leadership understands that they have a unique responsibility to embrace renewable sources of energy as a way to get to its environmental goals while still being able to provide reliable, affordable power to its customers.

The customer’s perspective matters to the team at Duke

Modern customers want to be more responsible with their energy choices. They also want the opportunity to select the kind of energy they want to purchase for their homes and places of business. Duke has developed customized solutions using its resources and options from outside the regulated utility space. The way the company sees it, it’s about being more focused on the customer. No more building products then trying to sell those products into the market - the model is now flipped upside down with customer needs and desires coming first.

It’s an ever-evolving path that the Duke team is walking and it has required a cultural shift within the company. But it’s a decision that’s being taken seriously, manifested in part through the creation of the position of Chief Customer Officer, and tapping Barbara Higgins to lead the way in understanding the customer first when it comes to renewable energy and other issues.

The uncertainty of the renewable energy puzzle is difficult for energy suppliers

T...