In our last article we discussed the possible effects of the ever growing “driverless cars” industry. This time we want to take a loot at renewable energy and the potential it holds for commercial real estate.
Specifically we want to talk about solar energy and it’s rising presence in Minnesota. The Minnesota solar trade is becoming more and more desired for it’s great potential in profit turn around.
Ralph Jacobson has been a pioneer in solar energy since 1991 and has been spreading the news of how it works to real estate owners as often as he can. Jacobson is the majority owner of IPS Solar of Roseville and has seen a large increase of productivity since 2013. This IPS has had positive interactions with a law passed in 2013 that ignited decentralized solar power projects making room for booming growth.
Commercial real estate holds potential for using the rooftops of their property, or idle acres as locations for solar energy equipment that can help increase their profit margins and have a great side effect of becoming a more environmentally conscious property. IPS has been named as one of Minnesota’s fastest-growing companies by Inc. Magazine last year thanks to their employment of hundreds of electrical workers and the completion of more than 40 megawatts of solar projects in the Upper Midwest, but they still have another 20 megawatts under construction and 50 megawatts already planned.
So who is buying this solar energy option that is helping IPS to succeed so well? Businesses, schools, nonprofits and local governments. In 2017 Minnesota’s solar garden program had grown sixfold resulting in enough energy to power 32,000 homes, all in one year alone. in 2016, 35 megawatts was the cap that the IPS was able to accomplish through Xcel Energy’s Minnesota territory, however in 2017 it rocketed up into 211 megawatts (1 megawatt can power close to 200 homes).
So how does it work? Xcel administers the community solar program towards residential and commercial users who want to invest in this form of energy but don’t want to set it up themselves. So in order to achieve their wants, they subscribe to solar gardens, larger arrays which are developed and run by independent companies that connect directly to Xcel’s grid, to provide the renewable source of energy.
Xcel has forecast that another 69 community-solar projects would be undergone in 2018 totaling 240 megawatts of generation capacity. Xcel’s largest natural-gas and coal-fired plants produce somewhere between 530 and 680 megawatts, which means solar is coming up on being 2% of Minnesota’s energy source.
On another impressive note, renewable energy has moved into second place as Minnesota’s largest source of energy generation, pushing nuclear energy out little by little and trailing coal.
If we take what we have just learned about the growth of solar energy and renewable energy all together, we can identify a potential big hitter that may provide a new means of increasing income on commercial real estate and develop into the new norm of energy source across Minnesota.
Solar energy has large potential simply for the locations in which it can be placed, there are plenty of rooftops available in Metro Minnesota that could hold solar energy equipment and really make a drastic impact on the health of our environments. What do you think? Is renewable energy something that we should keep an eye on?
Give us a call or send us an email and let’s discuss the potential of your real estate and build a profile that will benefit you!