Case5
CASE: BE-17
DATE: 12/2/2011
REI’S SOLAR ENERGY PROGRAM
By making these investments, we’re going to have strong cash flows 10, 20, 25 years from now, and that’s a huge benefit. We’re making a business decision that’s going to help REI fulfill its vision of being viable 100 years from now.
1
—Tim Nuse, REI’s Energy Manager
In 2010, Recreational Equipment, Inc. (REI) considered adding photovoltaic solar panels to the roofs of some of its facilities. This was driven by both financial and environmental considerations. Electricity costs were volatile, while the cost of solar panels was decreasing.
These panels, once installed, provided electricity at virtually no additional cost. Generating electricity from solar panels also helped REI’s environmental sustainability program. The company had ambitious goals for greenhouse gas emissions (GHG)—it wanted to become carbon neutral by 2020, and to cut its GHG impact by 50 percent between 2010 and 2015.2
REI had experimented with solar panels in 11 of its stores in Texas, California, and Oregon two years earlier. This “Phase 1” solar project had been undertaken as a learning exercise. Tim
Nuse, the company’s energy manager, considered what REI had learned from Phase 1 and the economic and political changes that had taken place, as he prepared an analysis of potential
Phase 2 solar installations. Additional solar installations would not be undertaken as a learning exercise—they would compete for funds against other capital budget requests.
RECREATIONAL EQUIPMENT, INC.
In the early 1930s, avid outdoorsman and amateur mountain climber Lloyd Anderson was frustrated with the quality, availability, and price of equipment in the United States. When
1
Quotations are from interviews with the author, unless otherwise specified.
See GSB Case SM-196: REI’s Environmental Sustainability Strategy, for a discussion of the company’s background and sustainability program.
David Hoyt and Professor Stefan Reichelstein prepared this case as the
DATE: 12/2/2011
REI’S SOLAR ENERGY PROGRAM
By making these investments, we’re going to have strong cash flows 10, 20, 25 years from now, and that’s a huge benefit. We’re making a business decision that’s going to help REI fulfill its vision of being viable 100 years from now.
1
—Tim Nuse, REI’s Energy Manager
In 2010, Recreational Equipment, Inc. (REI) considered adding photovoltaic solar panels to the roofs of some of its facilities. This was driven by both financial and environmental considerations. Electricity costs were volatile, while the cost of solar panels was decreasing.
These panels, once installed, provided electricity at virtually no additional cost. Generating electricity from solar panels also helped REI’s environmental sustainability program. The company had ambitious goals for greenhouse gas emissions (GHG)—it wanted to become carbon neutral by 2020, and to cut its GHG impact by 50 percent between 2010 and 2015.2
REI had experimented with solar panels in 11 of its stores in Texas, California, and Oregon two years earlier. This “Phase 1” solar project had been undertaken as a learning exercise. Tim
Nuse, the company’s energy manager, considered what REI had learned from Phase 1 and the economic and political changes that had taken place, as he prepared an analysis of potential
Phase 2 solar installations. Additional solar installations would not be undertaken as a learning exercise—they would compete for funds against other capital budget requests.
RECREATIONAL EQUIPMENT, INC.
In the early 1930s, avid outdoorsman and amateur mountain climber Lloyd Anderson was frustrated with the quality, availability, and price of equipment in the United States. When
1
Quotations are from interviews with the author, unless otherwise specified.
See GSB Case SM-196: REI’s Environmental Sustainability Strategy, for a discussion of the company’s background and sustainability program.
David Hoyt and Professor Stefan Reichelstein prepared this case as the