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All around the country on a daily basis, developers and landlords alike shout out to prospective tenants and investors using the terms “LEED,” “green,” “sustainable,” and “renewable.” All businesses, not just real estate developers and owners, want to convey the image that their firm is a leader in sustainability — who wouldn’t? Climate change has been a hot button issue in the United States for more than 20 years. As tenants choose their workplace and investors look to maximize returns, owners are constantly searching for ways to enact sustainability practices that not only project the image they desire but also have a real impact on their energy consumption — all while keeping in mind the cost of such endeavors.
Hobbs Brook Management — a commercial property management and development firm specializing in leasing, construction, and development of Class A office space since 1952 — has recently invested heavily in solar power generation in the form of photo-voltaic arrays, with one array already completed and two more currently under construction. The specific application is a garage mounted long span steel canopy array system. Each array sits high above the top of a parking structure around the firm’s Waltham and Lexington campuses. Combined, the three completed arrays will produce more than 2.3 MW of power annually. This energy will directly offset the electricity consumption of the buildings these arrays feed.
At 404 Wyman Street, on the Waltham campus, the firm partnered with Columbia Energy to construct and install two canopies (wired as one system) over the north and south parking garages of the building. The specific canopy application is considerably more expensive than other types of applications such as ground mounting or a ballasted system on the roof the building. Hobbs Brook believes that the investment in the canopy system holds benefits that far exceed the cost savings of other system applications.
Time lapse video showing construction of the solar canopies on the north garage at 404 Wyman, Waltham, Mass.
First, the canopies provide covered parking in garages that fill up with employees’ cars every day. The coverage reduces wear and tear on the concrete structures and lessens the need for salt treatment during harsh northeast winters.
Second, canopy systems align well with the overall investment strategy of the organization, which invests and develops for the long term in high quality Class-A office space. Properties in the portfolio are bought and built with 20 to 25 year hold terms in mind. As current technology stands, the useful life of the solar cells themselves is around 20 years. At that point they begin to lose efficiency and their energy output declines significantly year over year. The canopy system is essentially a galvanized steel rack for solar cells, meaning that at any point, if cells die or are damaged, they can be individually replaced. Equally, if a breakthrough in the technology is made in the next 5 to 10 years, the cells can be wholly interchanged for brand new, more efficient cells at a fraction of what a new system would cost.
At the outset of design, it was very important that the cost / benefit of the projects would be beneficial overall from an energy consumption and investment perspective. On an annual basis the solar array system at 404 Wyman Street, a 400,000-plus square foot building, is expected to cut energy consumption by approximately 13 percent. This directly impacts how much electricity the firm must purchase from the utility.
Even with these savings, however, the hard cost of the solar array system does not quite justify the investment in the technology. Luckily, Massachusetts has a solar renewable energy credit (SREC) program in place to subsidize and embolden investment in the technology throughout the state. The SREC is not a tax break, and it is not a grant. SRECs are marketable securities that allow larger utilities to conform to Federal and State mandated clean energy production levels. SRECs are created as energy is generated by each array (and other types of renewables). Owners and developers can then sell or auction these credits on the open market. However, the SREC market is just like any other involving securities — it is variable. There is no guarantee of income to the owner or developer of any system. With this potential subsidy in play, Hobbs Brook felt comfortable moving forward with the three projects.
Solar arrays represented a substantial investment, but also a home run sustainability solution. They significantly decrease electricity consumption from utilities and reduce the carbon footprint of each building. The arrays themselves are beacons of progressive sustainability practices visible to anyone who visits the campuses. Tenants see that the firm is committed to sustainability as tenant employees drive underneath them every day. The canopy design allows the arrays to grow and evolve with the technology, improving the efficiency of the cells and generating more power for the buildings. As costs compress the systems will become increasingly affordable for developers and owners to install throughout their portfolios.
Santo A. Dettore III is assistant real estate manager, development and construction, Hobbs Brook Management. As a member of the real estate team, he is involved with all new property development and construction efforts, managing new projects from design outset to tenant occupancy. He can be reached at Santo.Dettore@hobbsbrook.com.