If you were to board a helicopter and fly over Silicon Valley to get an aerial perspective, you would see thousands of sleek black solar panels glaring back at you in the California sun.
Silicon Valley, California’s beloved tech hub in the San Francisco Bay Area, is arguably one of the most influential places in the world in regard to global technology developments. If you own, invest in or create hardware or software in the 21st Century, chances are that you have a presence in the valley. Disruptive technology such as the original iPhone has its origins right here. It’s the absolute center of our cloud-based world.
The valley has been stereotyped as the home of yoga attending, t-shirt wearing millennial activists who are on a mission to change their world through meaningful careers in the booming tech sector. Ever-present in the minds of many of these young CEOs and mover/shaker types is the energy crisis that many feel to be an inevitability. They’re genuinely concerned about the rate at which earth’s growing population is consuming non-renewable resources, and they’re actually doing something about it. Solar energy is catching on in a big way here, and there are a few reasons why.
Government solar incentives
We can credit some of the developments in Silicon Valley’s solar use to the state’s political environment. California has more solar panels in use than any other state in the United States, and the state government plans to keep it that way. The state has a policy that allows customers who use solar panels to be compensated for the energy that they generate. The high rates of payment for solar energy in the state is likely the primary reason why California is leading the nation when it comes to solar power, and why Silicon Valley, in particular, is getting in on the action.
Not only can incentives help immensely, but as we talked about a few months ago, the national cost of solar installations are at an all time low.
Major companies going solar
Because Silicon Valley represents such a huge segment of the global tech market, you can imagine that its residents consume a lot of energy. With major corporations like Google and Apple having global headquarters in the Valley, thousands of people go in and out of their huge facilities every single day.
Studies show that over the last twenty years, Silicon Valley has consistently consumed more energy per capita than anywhere else in the state. Because of this, the valley is in greater need of a solution than many other regions.
Apple, one of the Valley’s most prestigious, influential and globally recognized residents, is jumping right into the renewable energy market. The company owns clean power plants, and it just passed through the government’s licensing phase so that it can sell energy to consumers.
Microsoft, another tech giant in Silicon Valley, has also chosen to go solar. With a 480 kW capacity powered by solar panels on the roofs of the Microsoft campus buildings, the site has been able to reduce emission and save costs on energy.
To give some context how much: According to a case study from Duoterra – by switching to solar, one real estate development saved an estimated $935 for each Kw of energy used for electric heating alone.
Other major players like Facebook and Amazon have made pledges to work towards operations that are 100% powered by renewable resources such as wind and solar energy. With the top dogs in tech making such serious commitments, it’s likely that the smaller guys in Silicon Valley will take a cue and make similar decisions. Even a small tech startup can buy or lease a few rooftop solar panels and start by at least supplementing the traditional energy supply, if not replacing it entirely.
Apple says that as a global corporation, the company is now 93% powered by renewable energy sources (as of 2015), with the goal being 100%. Google is also working towards the 100% target and the idea is that after exceeding the target, they will sell any excess energy that is generated to power companies (theguardian.com).
So, the tech giants are locked in a race to be 100% self-powered, and it’s not hard to understand why. Such an achievement would earn the praise of many environmentally-minded consumers and organizations around the world, adding to their already significant brand equity.
Pro tip: If you’re trying to optimize solar efficiency & accelerate solar panel usage, check out this guide from Matt Meiresonne at Engios.
Rooftop vs. power plants
There are primarily two ways that a company could go about generating and using solar power, and both are at play in Silicon Valley. The first is through a power plant. Power plants may be owned by Silicon Valley’s corporate residents, but they’re more often than not privately held by a power company who then sells power to these companies. It’s a win-win situation as the tech folks can rely on cost-effective solar power while the private utility companies have a ready market for the energy that they are so easily generating in the California sunshine. You may have seen a solar power plant before. Usually, it’s simply rows and rows of panels in an open field on platforms that can tilt or swivel to follow the rays of the sun.
Next, there are rooftop solar installations. These are a popular choice, particularly for companies who have large buildings with flat rooftops that provide huge, sunny surface areas. Google, for instance, constructed a complete solar array back in 2007 that powers the buildings on its Silicon Valley campus. The project was completed by Blue Oak Energy, who also completed an addition to the site’s solar capabilities in 2011. Blue Oak, a Californian company that specializes in solar technology, offers a wide range of solar design, installation, and maintenance services. According to the company’s website, demand for solar solutions is rising steeply.
Pro tip: Check out our section on DIY Solar for tips and tricks to learn how to install panels properly.
Then there’s Amazon, the e-commerce giant that has changed online shopping forever. Amazon has committed to installing a minimum of 50 solar systems across its North American facilities by 2020. These rooftop installations will cover the surface area of Amazon’s large fulfillment centre facilities, using the solar energy to power everything inside (amazon.com). These plans will be implemented at many sites, including Amazon’s Silicon Valley distribution center. Reports claim that these solar installations, “…could generate as much as 80 percent of a single fulfillment facility’s annual energy needs” (ecommercebytes.com).
It makes sense for a lot of companies to go with rooftop panels because initial investment pays for itself in energy savings over time, and then the company is essentially functioning on free power!
Tesla makes a move
How could we talk about solar energy in south California without at least mentioning Tesla? Elon Musk’s visionary brand recently acquired Silicon Valley’s SolarCity. Following the acquisition, Tesla began working with SolarCity to offer solar roofing for residential properties. Already, we see the trickle-down effect as the market finds ways for consumers to get in on the solar action that their favorite brands are already heavily involved in.
The motivations behind solar energy
Going back to Apple: California’s tech icon with revenues that are greater than the GDP of many small countries. When you’re Apple, you want to be a leader in everything that you do. If renewable energy is a growing field, then you want to be at the forefront. But for Apple, solar power is more than just a public relations stunt. Solar energy will create significant cost savings over time and reduce Apple’s significant environmental footprint.
Let’s be honest though– money probably has more to do with the valley’s solar developments than most people would be willing to admit. While the environmental contribution shouldn’t be downplayed, let’s not forget the significant financial gain that solar power represents. With reduced operating costs and a generally great return on investment, it just makes a lot of economic sense. That’s alright because as much as we try to mold corporations into compassionate and thoughtful vessels for change, they are still just businesses that need to make common sense choices. Even Apple is just a business at the end of the day; provided, it’s a pretty good one. And hey, we can be glad that these guys aren’t making the choice between the economy and the environment. With solar energy, they’re actually able to balance the two.
How will the shift impact solar manufacturers?
How is this shift towards solar energy going to impact installers and manufacturers in the area? Well, let’s just say it’s a good time to be in the solar business if you’re anywhere near the Valley.
In 2016, California led the way in solar production, generating ⅓ of all solar energy in the nation according to siliconvalley.com. Companies like the previously mentioned Blue Oak who are fortunate enough to already have in-roads to the Silicon Valley community can rely on the continued demand for services in their sector to increase their profits.
And that’s not including the other jobs that will be created in other industries:
Demand for items like industrial power cords will increase and will metal and glass and plastic. Solar trackers and mounting hardware are usually made from extruded aluminum, for example. Aluminum will need to be mined, it will need to be molded and forged, sold, then distributed.
All of these areas require American labor.
Sustainability creates jobs, and the economy will improve right alongside the environment.
For small solar manufacturers and installers in California, now is the perfect time to scale up operations and capitalize on the momentum that’s behind renewable energy. When industry leaders like Microsoft, Apple, Amazon, and Google start chasing something; it isn’t long before the rest of the world follows suit.