Commercial real estate is mostly about making every square foot count efficiently and financially.
Always regarded as a smart, durable investment tool—“Buy land, they’re not making it anymore,” Mark Twain may (or may not) have quipped—the commercial facility footprint feels nearly infinite, covering all kinds of endeavors from restaurants to office complexes to churches to hospitals to warehouses and more. When they say place of business, this is what they mean.
And no place is truly free. Any building or space comes with a price–such as a steady, sometimes steep cost in rent, upkeep, taxes and utility bills.
Where a new era of promise lies for commercial facilities is dealing with the last of those challenges by incorporating on-site, distributed energy resources or even microgrids, if the solution fits.
“That’s where it all starts,” Kirk Edelman, CEO of commercial DER developer SolMicroGrid, told Microgrid Knowledge in an exclusive interview. SolMicroGrid has installed solar projects for Wendy’s and Chick-Fil-A restaurants as well as numerous other customers.
We are looking at sites which can host a lot of solar capacity at the lowest cost, so rooftop arrays is typically the best option,” Edelman pointed out. “large grocery store chains are a great use case as they consume a lot of power, and they typically have large roofs. That’s a great combination for us, so we see a lot of potential out there.”
Indeed, the commercial real estate sector covers close to 97 billion cubic feet in the U.S. alone, according to reports.
All of those facilities are mission critical in one way or another—especially to those employed and invested there. Given the growing frequency of climate events and power outages, the idea of connecting commercial-scale buildings to resilient DERs and microgrids is becoming more and more attractive to those customers such as retail chains.
One size does not fit all customers even if they all wanted DERs. SolMicroGrid develops many of its projects in California and still finds a variety of customer needs out there in the Golden state.
“It has to be a very flexible model that is capable of providing a number of attributes to a site,” Edelman said. “Some hosts want resiliency, but some don’t. If it’s in northern California chances are resiliency is important. In southern California it may not be something the host requests.”
Microgrids for commercial real estate are a key theme at Microgrid Knowledge Conference.
MGK 2025 is happening April 15-17 at the Sheraton Dallas in Texas.
The resiliency equation in commercial microgrids
The value of the commercial DER project depends on the use case. One customer may be happy to have some solar and a small battery to offset some of the site’s energy use, cut down on utility bills and maybe even sell some excess distributed energy back into the grid.
Others want to be ready when an outage comes, and they need to stay energized for hours or even days at a time. They might even strive for sustainability within the buildings. In those cases, the microgrid may be the answer.
“Resiliency and backup power needs should be part of the microgrid design process for commercial real estate and facilities managers considering DERs and microgrids,” said Michael Stadler, CTO and co-founder of microgrid modeling software firm Xendee, a regular partner with developers in these types of transactions.
“This is where you set your objectives and start to determine which configuration is going to be optimal to achieve them,” Stadler noted. “For example, depending on how much time you want to stay up and running during an outage—three hours or three days—the optimal technology mix will change dramatically.”
Indeed, this is a key differentiator when facility decision makers either go with the DER solution of a bit of rooftop and/or canopy solar and maybe a small battery to something more upsized in terms of rate capacity. Size matters, especially if the commercial site has the footprint to enable a microgrid.
“We can provide limited backup power via a battery,” SolMicroGrid’s Edelman said. You don’t always have to go to a (diesel or natural gas-fired) gen-set with islanding capability. We can upsize the battery along with load-shedding capability which can provide back-up power for select equipment.”
Expanding to a higher battery capacity can capture and sore more of the intermittent solar resource’s power generation, thus utilizing more of the renewable energy for longer duration. Developers such as his company, the Schneider Electric-Carlyle joint venture GreenStruxure and others can adjust their solution to meet the commercial facility’s needs.