Contributed by Craig D'Arcy
In its latest annual responsibility report, The Home Depot explains how the company continues to be committed to energy efficiency. Each year, the company sets goals to accomplish and “makes it a priority to understand [their] energy footprint and find ways to make an impact.” This year, the company reached 25% of its 2020 goal to reduce carbon emissions by 20M metric tons. Craig D’Arcy, Director of Energy Management for The Home Depot, further details those efforts in a conversation with Jhai James, Strategic Energy Institute communications officer. Click the image to the left to read The Home Depot 2017 Responsibility Report.
Strategic Energy Institute: The Home Depot releases a sustainability report annually. How does the company decide on its energy goals?
Craig D’Arcy: At the end of 2015, The Home Depot released a couple of sustainability goals; one of those was around energy efficiency in our stores. Specifically, the goal was to achieve a 20% reduction in the amount of electricity that we use in our stores versus our 2010 baseline. The second goal was around how we source the energy that we do use, specifically we set a goal of 135 MW of alternative and renewable energy projects that we would have in place by the year 2020 or sooner.
We also are focused on how we use electricity in our stores and ways to optimize that and also on doing everything we can to identify alternative energy projects that make sense for The Home Depot as a company. In terms of those alternative energy projects, it’s a mixture of technology between wind and solar and fuel cells; it’s a mixture of project structure in terms of systems that are installed on site at our stores versus larger off-site projects that we form relationships with.
SEI: The Home Depot sustainability report also states that earlier this year the company welcomed a large-scale offsite development in Texas that produces wind energy. What is the progress on that project?
Craig D’Arcy: Yes, we have. That project came about as a result of an agreement that we signed; it was constructed during 2016 and it became operational at the end of that year, just before 2017, and now it’s up and running. We’ve been an off-taker of wind power by 50 MW of wind capacity. We’re eight months into that relationship now, given that we’re in September, and that’s certainly become a big part of our efforts on the alternative energy side of things. It’s the biggest project that we have in place.
SEI: As a large-scale supplier to commercial contractors and consumer level shoppers, how do these sustainability activities affect your customers?
Craig D’Arcy: We’re trying to accomplish a few key objectives in parallel. One is specifically delivering on the sustainability goals that we build upon annually. The second is making sure that we’re taking as many costs out of our operating model as possible. The challenge is finding projects that check both of those boxes, such that you feel good about them not only from a sustainability perspective but also just from an operating efficiency standpoint. Whether it’s the wind project or any of our other initiatives, be it solar, fuel cells or anything else, our goal in all of that is to remove volatility from our expenses on our profit and loss statement, and also to just have the net effect of reducing expenses. At the end of the day, it benefits the consumer as well because we pass those efficiencies on to our customers.
SEI: What can customers of The Home Depot expect in the future?
Craig D’Arcy: I think The Home Depot is going to continue to be diligent on all (energy) fronts. We will continue to be as innovative as we can be in finding anything in the energy efficiency space, anything in the alternative energy space, that allows us to operate as efficiently as possible, and allows us to increasingly do a better and better job on the sustainability front as well. I think the marketplace will continue to see us stack up more off-site projects. I think you’ll definitely see us now doing more and more in terms of more traditional renewable projects, like solar.
For instance, in the past few months, we released some information about the fact that The Home Depot will install solar on the roofs of fifty of our stores. So, that’s something we’re doing right now and we’ll continue those projects through early 2018, which we view as a “phase one”. So I think you’ll see more solar on the roofs of more of our stores as well. We’re going to continue to be active across the spectrum. I also don’t think we’re done from an energy efficiency standpoint either. Certainly, the most effective thing we can do is to just use less electricity period, so it’s not generated in the first place. We will also continue to look for ways in how we can be more efficient in how we light and cool our stores, as well.
SEI: It looks like The Home Depot is hitting all of its energy and sustainability goals. Decreasing electricity usage is something that consumers can buy into as well. You mentioned solar installations. In the report, The Home Depot has set up offsite solar installations in Delaware and Massachusetts. Can you talk a little about these?
Craig D’Arcy: That’s right. Those are off-site solar projects. So we’re partnering with a number of different solar projects that might be 3 or 4 megawatts in size, where we’re taking a portion of the power from them.
We continue to look for more projects like this that aren’t physically connected to our stores, where we’re facilitating solar development in different parts of the country. But, now, specifically on the roofs of our stores, we’re in the midst of a rollout where we’re installing solar systems on our roofs.
SEI: Will that include stores in Georgia?
Craig D’Arcy: It doesn’t for now. The solar installations end up being a combination of factors that have to come together and work correctly. It has to be the right mixture of cost avoidance on the electricity bill, along with the incentive landscape within a specific state. Right now, those dynamics don’t quite make it possible for this to work in Georgia yet, but it’s certainly something we continue to evaluate.
SEI: In closing, what else can you share?
Craig D’Arcy: The Home Depot’s commitment is to ensure that we are successful in the pursuit of our company’s sustainability goals. We are focused on innovation in both the products we bring to our customers and the way we operate our business, and will also continue to explore projects that make sense from a financial standpoint as well.
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