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2021-10-01

How Shoprite is embracing solar power

So Africas laruthgest food retailer is putting solar panels on top of supply trucks, carports, stores and distribution centres in order to be a better corporate citizen and reduce operational costs.


| Shoprite

Africa’s largest food retailer, Shoprite, has witnessed first-hand the effects of climate change on its manufacturers and customers.

Floods, fires and droughts in recent years have impacted suppliers and made it harder for people to access food, said Sustainability Manager Sanjeev Raghubir. Low-income shoppers are more worried about hunger and poverty, while high-income ones are typically seeking retailers with responsible sourcing and climate change initiatives.

In response, Shoprite is ramping up its investments in renewable energy in a way that's notable for its depth and breadth — and for how it harnesses the abundant sunlight across the 13 countries where it operates. 

Shoprite has installed more than 1 million square feet of solar panels on the rooftops of stores, distribution centers and other facilities. It's also added solar panels atop 811 supply trucks, helping power their energy-intensive refrigeration systems, and on carports, where they help charge electric vehicles for shoppers and employees. All told, the retailer has enough solar panels to fill more than 14 soccer fields. 

Additionally, Shoprite is pursuing buying renewable energy from utility-scale power plants operated by a third-party energy supplier. And next year, the company will start sourcing renewable energy from its partnership with an energy trader that will account for roughly 20% of the total electricity it consumes by 2027.

For Shoprite, which operates 2,400 corporate stores and aims to achieve net-zero greenhouse gas emissions by 2050, investing in sustainability is a way to be a better corporate citizen and also drive down operational costs. That helps fuel the company's focus on affordability, Raghubir said. 

"To be affordable means that our operations have to be efficient. When you are efficient, you have less waste, but also you consume less energy, consume less water [and] consume less resources, which makes you more environmentally responsible," he said.  

Illuminating Shoprite's solar energy journey 

Over the last few years, food retailers around the world have increased their investments in clean energy, with many — primarily large, public ones like Shoprite — turning to solar energy to meet publicly shared sustainability targets.

“Solar in many places, when you talking about large grid scale, is the cheapest source of energy around, so that it's very compelling for people to do," said Aaron Daly, principal at Ratio Institute, a non-profit supporting food retailers with their sustainability efforts.

South Africa, where Shoprite is based, has been struggling with a failing electricity supply and an ongoing energy crisis with periods of chronic power shortages going back more than 15 years. The country's electricity is mostly produced from coal-fired power stations and has one primary supplier that feeds into the national grid.

Shoprite first started adding solar panels a few years ago and accelerated the rollout in 2019, more than quadrupling the number of facilities with rooftop solar panels from eight that year to 32 by the end of 2020, Raghubir said. Currently, Shoprite has 41 solar panels on the rooftops of facilities, with plans to have solar panels at 60 total sites by the end of this year.

“We are the biggest [food] retailer in Africa, and we also want to be the biggest in terms of solar use of renewable electricity," Raghubir said.  

But the company has faced several challenges with renewable energy that are common for grocers. Some of its rooftops built 10 or more years ago aren't strong enough to support the panels and, of those, only some can be reinforced to handle the added weight. Shoprite is also eyeing the use of solar batteries, which store electricity for later use, but hasn't been able to integrate them up to this point due to their hefty price tags and previous limits from the government on private power generation, Raghubir said.

Through 20-year power purchase agreements, Shoprite is working with third-party companies that build the solar energy systems and then bill the grocer on a monthly basis for its electricity consumption. Already, Shoprite is seeing cost savings: Per kilowatt per hour, the retailer pays between 35% to 50% less than national grid rates, Raghubir said.

By the end of its last financial year, solar energy accounted for 1% of Shoprite's total electricity usage and aims to reach 2.5% by the end of this year. The grocer is broadening its solar energy efforts now in order to scale up in the future.  

“In a good case, a grocery store can produce about 10[%] to 15% of the energy needs of the store through putting solar on the roof, or if they did the parking lot, they can maybe hit 50%," said Daly, who was director of energy management at Whole Foods from 2013 to 2020. "Almost no grocery store can produce all of the energy through on-site solar."

Ramping up solar energy worldwide  

Shoprite’s expansion of its solar panels comes at a time when renewable energy is becoming easier for companies to embrace. The cost of solar power generation has dropped globally in recent years. Daly estimated the price of solar equipment has decreased roughly 90% over the past decade.

In South Africa, the government recently started allowing more private power generation, raising the threshold from 1 megawatt to 100 megawatts. Shoprite has also had "tremendous" support from its C-suite to tackle environmental challenges, Raghubir said.

The global grocery industry, meanwhile, is increasingly acknowledging environmental tolls, experiencing heightened customer demand for sustainability actions and seeing more interest from investors and rating agencies on environmental, social and governance reporting. 

In the U.S., retailers from large chains like Aldi, Whole Foods and Target to smaller grocers like Yes! Organic Market and Mom's Organic Market, both in the mid-Atlantic region, have added solar panels atop their stores in recent years. Target and Walmart have both made goals to fully source their electricity from renewable energy sources by 2030 and 2035, respectively.

 

Rooftop solar panels at Checkers Hyper Parklands (Sandown) in South Africa.

Permission granted by Shoprite

 

Raghubir and Daly said that grocers who are interested in renewable energy should act quickly. "Don’t wait too long to start, prices are coming down [for solar panels]," Raghubir said, adding it's important for retailers to set up a commercial contract with suppliers to quickly install and integrate renewable energy into electricity systems, and also find specialists for electrical installation.

Daly said that, while the rate of solar getting less expensive is slowing down, the power retailers are paying for is getting more expensive. 

“There's an enormous opportunity in North American grocery to both install solar and reduce emissions, as well as install solar and save money," Daly said. "I think the industry hasn't quite woken up to that yet.”

 


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