^ JN LEARN MORE AT
tfi3\ energystar.gov
ENERGV STAR®, a U.S. Environments I Protection Agency program helps
us all save money and protect our environment through energy efficient
products a nd practices. For more information, vist WWW.energysta rgov
USING ON-SITE RENEWABLE ENERGYASTHE NEXT STEP
TO IMPROVING ENERGY PERFORMANCE AND REDUCING EMISSIONS
As energyc osts increase a nd c omp antes realize fie importanc e of environmental stewardship to m'rtiga te cUma e cha nqe
building owners and ma nagers are looking for ways to reduce their energy consumption a nd find c leaner energy sources for
powering titeir buildings, jcpenney,a national retailer, has found a successful strategy for achieving ftese complementary goals
jcpenney has a corporate energy ma nag erne rit strategy that in eludes using energy efficient technologies in its stores and encouraging
energy con serv ation. As p a rt of this strategy, th e co rrpa ry also investigated gen era ting e lectricity throug h on -s ite renewa b le e nergy.
jcpenney is a partner in the U.S. E riv iron rrie rta I Protection Agency EPA) ENERGV STAR Corrrnercia I Buildings Program and has been
tracking building energy use since 2006 using EPA's free benchmarking tool Portfolio Manager. Portfolio Manager provides a MOO energy
performance score similar to a "miles-per-ga lion" metric for vehicle fuel efficiency. Those buildings that achieve an ENERGY ST4R score
of a 7 5 or hig her a re a mong the top 2 5 % most effici erit bu ildi ngs in the U.S, a nd ca n a pp ly f or EN ER GV STA R certif ica tjon. In addtionto
having more than270 stores ENERGV STAR certified-jcpenney has eamedrecognitionasanENERGY STAR PartneroftheVearforfwe
yea is in a rtwfor its comprehensive approach to energy ma nagerrent across its portfolio of buildings.
With the foundation of a successful energy management program and active efforts underway to reduce energy consumption in its
buildings, jcpenney began imple menting a renewable energy pilot progra rnby permitting the installation of rooftop solar arrays on
nine stores in California and New J ersey starting in the winter of 2008. jcpenney used a Solar Pewer Purchase Agreernerit (Sola rPPA
sometimes referred to as SPPAs) to purchase the energy from the solar photovoltaic (P'»0 systems installed onjepenne/s rooftops. The
SPPAs ena bled jcpenney to secure I i.wr-than-utiliry electricity costs and long-term price stability for nearly 2 5 percent of the electricity
used across the nine stores.
In addition to the direct savings from the Itwer electricity rates, the use of electricity from on-site solar installations helps improve the
stores'ENERGV STAR scores. The increase in a store's score is dependent on a number of factors:
1.	The store's o perations a nd e nergy us a ge patterns.
2.	The perc erita ge of electricity p rov ide d by the s ola r in sta I latio n relatw e to the store's tota I energy (e lectricity a nd n atura I ga s)
consumption;
3.	The store's sta ni ng s co re si nee the e nergy perf orrna nc e s ca I e is ba se d on a regres si on mode I tha t res ults i n a bell -cu iv e of sc ores
(and thereto re is not a linear modeO.
Employing on-site renewable energy can help stores raise their
ENERGV ST4R scores, thereby meeting corporate goals such as a
specified number of ENERGV ST4R certified stores. Additionally,
reta i lers may b e a b le to demonstrate better pe rforrra n ce to the
public, especia Ity in cities or states with laws requiring public
disclosure of energy consumption, such a s N ewVork City or the
State of California.
This ca se study will highlight fcvo jcpenney stores—in
different areas of the country with different sized on-site sola r
installations—that have seen financial savings and increases
in their ENERGV ST4R scores as a result of energy intensity
reductions associated with on-site sola re nergy installations and
a ctw e e nergy rra na ge rrent
Fgje 1. MJ2S8kWSda
Released in December2011	¦ ¦ »»Er*yn—.l

-------
CASE STUDY METHODOLOGY
Portfolio Manager is EPA's online benchmarking tool that has become the industry standard for assessing and tracking the energy
performance of commercial buildings. In 2009, EPA incorporated the ability to track the financial savings and environmental benefits
associated with on-site solar and wind systems. For these reasons, jcpenney chose Portfolio Manager to be one of its energy
performance tracking tools.
This case study established an energy performance baseline based on a 12-month period leading up to the time when the solar energy
systems were installed on each building in late December 2008.1 The impact of each solar PV system on the building's energy performance
rating was analyzed using data for the two years following the installation of the system.2 It is helpful to note that because Portfolio
Manager calculates performance scores based on a minimum of 12 months of data, the full impact of the solar PV system could not be
determined until December 2009, after the system had been in service for one year.
All of the calculations in Portfolio Manager are based on source energy intensity3 (kBtu/sq. ft./year), because the source energy value
incorporates the complete energy requirement, when taking into account energy used to generate and distribute products such as
electricity and steam. Source energy ensures that a building does not receive either a credit or a penalty based on the efficiency of its
utility company.
The effect of on-site solar on a building's energy performance score is a result of a difference in site-source conversion factors. EPA
assigns a "site-to-source ratio" of 3.34 for grid-purchased electricity to account for typical generation, transmission, and distribution
losses. In contrast, the site-to-source ratio for on-site renewable energy is 1.0 because on-site generation does not result in these losses.
As such, a building with on-site solar or wind power would receive a higher ENERGY STAR score compared to the same building using
grid-purchased electricity.
If an on-site renewable PV system generates more electricity than the building can consume, the excess power is exported to the local
electric utility grid under local net-metering policy. Portfolio Manager calculates ENERGY STAR scores using only the coincident use of
electricity supplied from the onsite systems, or the electricity consumed by the building at the time of generation by the solar system.4
Solar PV systems can be a particularly good fit for retailers or businesses because solar PV system generation tends to align well with
store electricity usage and cost patterns, meaning that the majority of solar electricity is consumed by the building.
METHOD TO DETERMINE THE IMPACT ON ENERGY STAR SCORES
A simple exercise in Portfolio Manager—the creation of a "no-solar" scenario—revealed the increase in score attributable to the solar
PV system and the increase resulting from other concurrent energy efficiency activities:
1.	A building was benchmarked in Portfolio Manager with jcpenney's consumption values of grid-purchased electricity and solar
electricity; the baseline score and the most recent score (for December 2010) was recorded.
2.	The source of the electricity for the on-site solar meter was changed to "grid-purchased" electricity in Portfolio Manager, but the
site energy consumption (kWh) remained unchanged; this step created the "no-solar scenario" and the December 2010 score was
recorded.
3.	The difference between the baseline score and the "no-solar" scenario score revealed the change in score attributed to energy
efficiency improvements, or a decrease in site energy consumption.
4.	The difference between the December 2010 "no-solar" score and the actual December 2010 score showed the change in score
attributed to the use of electricity generated from on-site solar rather than purchased from the grid.
JCPENNEY'S SOLAR INSTALLATIONS
To complement its ongoing energy management program, jcpenney worked with the solar photovoltaic manufacturer SunPower
Corporation as well as a subsidiary of Integrys Energy Services, Inc. to bring solar PV systems to nine jcpenney stores in California and
New Jersey, with the installations ranging in size from 259 to 602 kW each (kW-DC). This case study will highlight two of those stores,
Deptford, NJ and Palmdale, CA.
1	Portfolio Manager provides metrics based on a 12-month period to account for seasonal differences in energy usage.
2	Find out more about how fhe ENERGY STAR score is calculated here.
3	Site energy is the a mount of heat and electricity consumed by a building as reflected in utility bills (including grid purchased electricity and the energy supplied by the
renewable energy system consumed in the building). Source energy is the amount of energy produced at the source of the energy generation to support delivery of energy
to the site. See more.
4	ENERGY STAR onsite solar and wind energy FAQs can be found here.

-------
In the months prior to the solar photovoltaic (PV) installation, the
jcpenney store in Deptford, NJ was performing above-average,
achieving an ENERGY STAR score of 62. (See Table 1 for system
details.)
Two years after jcpenney permitted the solar PV installation, in
December 2010, the store achieved a score of 81. (See Figure 2.)
The solar PV system provided about 13 percent of the coincident
electricity consumed by the store annually (i.e., 13% of the electricity
consumed annually is provided directly from the onsite solar system;
this percentage does not include electricity generated by the solar
system and exported to the grid).5
At first glance, it appears as if the solar installation increased the
Deptford store score by 19 points within two years. However, the
"no-solar" scenario exercise reveals that the increase is due to both
on-site solar and improved energy management, jcpenney launched
several energy efficiency and conservation initiatives beginning in
2009, including:
Participating in the jcpenney Advanced Energy Management
(AEM) program designed to maximize energy savings through
behavioral changes;
; Installing a smart meter to provide the store manager with
15-minute interval data to better understand the buildings energy
usage; and
Installing building and systems optimization controls.
The decrease in site energy intensity (see the blue line in Figure 4)
reflects these energy management efforts. The "no-solar" scenario
exercise shows that without the addition of on-site solar PV, but
maintaining the same amount of electricity use, the store would
have achieved a score of 76 in December 2010, which is 14 points
higher than the baseline score of 62 from December 2008, and five
points lower than the actual score of 81. Therefore, the additional five
points is attributed to the addition of a solar installation and decrease
in source energy intensity (see the red line in Figure 4), for a total
increase of 19 points. (See Figure 3.)
DEPTFORD, NJ STORE #2775
Table 1. Deptford Building and Solar System Details
Total Capacity
258.64 kW DC
Avg. Annual Solar Electricity
Production (2009-2010)
306,423.5 kWh
Avg. Annual Solar Electricity
consumed directly by Building
305,564.5 kWh
Building Gross Floor Area
153,049 ft2
System Installer
SunPower Corporation
Type, Location
Solar PV, Rooftop
Quantity
848 SunPower 305 Watt Panels
Inverter
Xantrex PV225S (225 kW AC rating)
System Area
14,868 ft2
Installation Date
12/26/2008
Source: SunPower Corporation
Deptford Store Energy Performance Score
Nov Dec Jan Feb Mar Apr May )un Jul Aug
2008 2009
Jut Aug Sep Oct Nov Dec
Period Ending Date
Figure 2. Deptford Energy Performance Score, Nov. 2008-Dec. 2010
(red line = soiar installation)
Deptford Store: 19 Point Increase in ENERGY STAR Score
Deptford Store Energy Intensity and Score
Solar
5 points
Energy
Management
14 points
Figure 3. Factors in Deptford Score Improvements:
Energy Management vs. Solar Installation.
Source Energy Intensity
£
c 100
Figure 4. Deptford Store Energy Intensity and Score
5 Utilities will establish net-metering agreements with customers that produce excess electricity to compensate them for the electricity being senttothe grid.
See Green Power Markets for more information and state rules.

-------
The Palmdale, CA jcpenney store was recognized by EPA for its sujDerior
energy performance, achieving ENERGY STAR certification in 2008 with
a score of 79. The store has sufficient roof space and solar resource
to provide a significant portion of the stores electricity consumption
through solar energy. Realizing the savings potential from the locked-
in electricity rate through a SPPA, jcpenney decided to host one of its
largest onsite solar installations at the Palmdale store.
The Palmdale store had a baseline score of 79 in December 2008, prior
to the installation of the on-site PV system. Within two years of the solar
installation providing 55% of the store's electricity use, the store showed
a score increase to an average of 98. (See Figure 5.)
Like the Deptford store, this 19-point increase between December
2008 and 2010 is attributed to the solar installation and operational
improvements. When the "no-solar" scenario exercise is applied to
the Palmdale store, this shows that the score in December 2010 would
have been 87 without the solar installation. Therefore, of the 19-point
improvement, 8 points is attributable to improvements in energy
management and 11 is attributable to the addition of on-site solar.
(See Figure 6.)
During this two-year period, operational improvements led to a decrease
in the store's site energy intensity (see blue line in Figure 7); however, a
significant portion of the decrease in source energy intensity is due to
the addition of the solar PV system (see the red line in Figure 7).
The Palmdale store's score increase differs from the Deptford store's
due to several factors. First, the percent of the total building energy
provided by the solar installation was higher for the Palmdale store
than for the Deptford store (55% versus 13%). Given this percentage,
the source conversion of 1.0 for on-site renewable energy had a more
significant impact. In addition, the Palmdale store started with a higher
ENERGY STAR score. This means thatthe Palmdale store had superior
management at the outset. The more energy operation and management
are optimized prior to the addition of solar panels, the greater the potential
impact of those solar panels. Finally, the Palmdale store also offered
a slightly different opportunity for the potential of solar because it had
greater percentage of total energy supplied by electricity. In most cases,
solar panel installations can only be used to replace existing electric
loads. Palmdale had a greater potential for solar panels given the high
percentage of electricity compared with other fuels.
PALMDALE, CA STORE #2388
Table 2. Palmdale Building and Solar System Details
Total Capacity
593.62 kW DC in 3 sub-arrays:
241.23 kW, 245.96 kW, and 106.43
kW
Avg. Annual Solar Electricity
Production (2009-2010)
1,010,416 kWh
Avg. Annual Solar Electricity
consumed directly by Building
778,081.5 kWh
Building Gross Floor Area
113,847 ft2
System Installer
SunPower Corporation
Type, Location
Solar PV, Rooftop
Quantity
2,761 SunPower 215 Watt Panels
Inverter
2Xantrex GT250 (250 kWAC
rating) and 1 Xantrex GT100 (100
kWAC rating)
System Area
36,887 ft2
Installation Date
12/20/2008
Source: SunPower Corporation
Palmdale Store Energy Performance Score
i Mar Apt May Jun Jul Aug Sep Oct Nov [
Period Ending
Figure 5. Palmdale Energy Performance Score, Nov. 2008-Dec. 2010
(red line = solar installation)
Palmdale Store: 19 Point Increase in ENERGY STAR Score
Palmdale Store Energy Intensity and Score
Energy
Management
8 Points
Solar
11 Points
Source Energy Intensity
Site Energy Intensity
Figure 6. Factors in Palmdale Score Improvements:
Energy Management vs. Solar Installation
Period Ending
Figure 7. Palmdale Store Energy Intensity and Score

-------
PURCHASING SOLAR ENERGY
jcpenney chose to utilize a SPPA to enable the solar installations to occur at its sites. A SPPA is a long-term agreement to purchase energy
from a third party that installs, owns, and operates the solar system on the customer's site. In jcpenney's case, jcpenney purchases the
electricity from the system's owner, a subsidiary of Integrys Energy Services, Inc., at rates specified in the SPPA competitively priced
against standard utility rates, saving jcpenney money now and providing a financial hedge against rising electricity prices, jcpenney
entered into a 10-year SPPA with the subsidiary of Integrys Energy Services, Inc. to purchase the system's electricity. When the agreement
expires in 2018, jcpenney has the option to extend the SPPA. The Integrys Energy Services, Inc. subsidiary also owns the renewable
energy certificates (RECs) and any other environmental attributes associated with the systems.
SPPAs may be the right choice for many retailers. Some benefits of SPPAs include:
1.	The system host is not buying the solar system, only the electricity, so there is no upfront system cost or long-term operations and
maintenance responsibilities.
2.	System performance risk is shifted to the system owner.
3.	A fixed cost of electricity that is less than utility rates provides savings and a hedge against rising and volatile fuel costs.
4.	At the end of a SPPA, which is generally a 10-to 20-year contract, the host can buy the system or extend the SPPA.
Direct purchase or leasing-to-own are other solar purchasing options. One benefit of these arrangements isthatthe retailer owns the
system and its associated environmental benefits (e.g., RECs); however, there are sometimes upfront investment costs as well as ongoing
operations and maintenance costs.
GREENHOUSE GAS EMISSIONS AND CLAIMING ENVIRONMENTAL BENEFITS
For organizations that are motivated by environmental stewardship and the associated public recognition, one factor in deciding to install
a solar PV array in a commercial building is the avoided greenhouse gas (GHG) emissions. To make environmental claims associated with
an onsite renewable system, such as avoided air pollution or GHG emissions, the system host or electricity user must retain the associated
renewable energy certificates (RECs) produced by the system.
As is common in some SPPA arrangements, jcpenney owns neither the solar systems, nor the associated RECs produced by the
renewable energy systems on its roofs. This means that when computing a GHG inventory, the emissions associated with the solar
panel installations on their buildings are actually equivalent to the emissions that would be associated with the same amount of energy
purchased from the electric grid. This computation is a standard among widely accepted GHG inventory and reporting protocols and
calculated within Portfolio Manager.
Portfolio Manager allows users to account for purchases of RECs while claiming their conveyed avoided emissions, as long as the user
retains ownership of these claims (e.g. not sold).6 7 These REC purchases do not change the GHG inventory; rather Portfolio Manager
tracks them separately as reduced emissions through the purchase of RECS.8
The revenue generated from the sale of the system's RECs was integral to the financing of the system and helped reduce the delivered
cost of electricity to jcpenney. While jcpenney cannot claim to be using green electricity, they are reducing their energy intensity, and
therefore moving toward their corporate goal of reducing energy consumption 20 percent per gross square foot by 2015 through energy-
efficiency improvements and implementing conservation practices.9
CONCLUSIONS
In both the Deptford and Palmdale stores, ENERGY STAR scores increased after the installation of rooftop solar arrays due to the
lower site-source conversion factor used in Portfolio Manager for onsite renewable energy. The magnitude of the increase in scores
was dependent on the percentage of electricity use in the building supplied by the solar array, and changes in store operations. The
percentage of score increase from the pre-solar installation value is dependent on these factors and is therefore not a linear relationship
(i.e., the Deptford store saw a 30% increase in performance score from 62 to 81, and the Palmdale store saw a 24% increase in
performance score from 79 to 98). These higher ENERGY STAR scores translate into more opportunities for ENERGY STAR recognition.
The SPPA enables jcpenney to achieve long-term savings through I owe r-th a n-uti I ity electric rates over the course of the installations'
expected 30-year lifespan. Solar energy is a particularly good fit for retailers because it produces the most energy during the day when a
store may have the highest operating costs and in the summertime when air conditioning can be a large energy load in some climates.
Overall, jcpenney has found its pilot program for on-site solar arrays successful. In January 2011, jcpenney's tenth solar site went live at
Mays Landing, NJ, and jcpenney will continue to explore opportunities in solar technology.
6	Fo r mo re i nf o rmati o n a bo ut R E Cs a nd c la i mi ng e nvi ro nme ntal attri butes asso c iated with re newa bleenergy,see1he Green Power Partnership site.
7	Use the Green Power Locator from the Green Power Partnership site to find information about green power options.
8	The addition of RECs to a Portfolio Manager account will not affect the building's energy performance score.
3	See the company's Corporate Social Responsibility Report.

-------