03/09/2012 | By Carisa Chappell
Kimco Realty (NYSE: KIM) is turning the rooftops of some of its shopping centers into energy-efficient solar sites. In January, the company completed the installation of solar energy systems at two New Jersey properties and has plans to expand the project.
With the two new additions, Kimco now has six solar-powered shopping centers in New Jersey after installing the first one in the state in 2010. The company said the two new systems are estimated to meet 60 to 80 percent of the annual needs of several major retailers in the centers.
Kimco is looking to develop additional systems both in New Jersey as well as other regions, said Will Teichman, Kimco's director of sustainability, in an interview with REIT.com
"We believe that our available roof space is a rare asset that we can leverage to continue to grow this program," said Teichman, adding that Kimco's portfolio of shopping centers includes more than 100 million square feet of roof space located across 44 states, Puerto Rico, Canada, Mexico and South America.
Teichman said Kimco, its tenants and the environment all benefit from the solar program.
"Our tenants receive a reliable source of electricity that is discounted below local utility rates, and the environment benefits from the net addition of a zero-emission energy source," he said. Teichman added that the solar-powered systems eliminate the energy losses that occur when power generated at remote locations travels across power lines to reach the customer.
Programs such as the solar paneling have been well-received by important stakeholders, according to Michael Pappagallo, Kimco's chief operating officer.
"These efforts resonate positively with our retailers and shoppers, and are increasingly important to our investors," he said.
Kimco weighs a number of factors when deciding on which retail properties to turn into solar-powered centers.
"In our sector of the retail business, we've found that those factors include the physical characteristics of the property like the roof size and condition, the presence of tenants who are interested in purchasing solar power, and the prevailing of utility rates within a local market," Teichman said.
Additionally, he said Kimco looks to take advantage of government or utility incentives to help defray the investment cost for the systems.
The company's first solar energy system was installed in 2010 on the roof of its North Brunswick Plaza shopping center in New Brunswick, N.J. The two newest systems are located at The Bridgewater Promenade in Bridgewater, N.J., a 242,000-square-foot shopping center, and Edgewater Commons in Edgewater, N.J., a 423,000-square-foot shopping complex.