After years of successfully servicing the maintenance requirements of Pep Boys McDonough Distribution Center, the commercial roofing consultants at Greystone had finally gotten their foot in the door at the corporate level and were prepared to present a cost-savings plan that had been years in the making.
Armed with details about an opportunity to nearly neutralize increasing energy costs of their warehouse and distribution facilities, Greystone and a team of consultants planned to propose a solar installation for the 400,000 square foot facility in Chester, New York. What they didn’t anticipate was the news from facilities management that the 20-year-old roof upon which they planned to install this solar solution was falling apart at the seams.
Occupants of the facility has already observed that a failure of the ballasted EPDM membrane was causing the roof to leak badly. This created a capital problem for Pep Boys. The replacement estimates for the roof had come in at $894,000, a capital outlay that for Pep Boys was neither planned nor budgeted.
What initially appeared an unyielding roadblock was soon recognized as an opportunity.
With some creativity, innovative thinking and due diligence on the part of Greystone, the proposed solar solution became not only a valued option for reducing energy costs but a pathway to the much-needed roof replacement.
With a not uncomplicated financial arrangement, Greystone explained that the roof replacement could be financed as part of the proposed Power Purchase Agreement (PPA). Under the terms of the agreement, Pep Boys would purchase 2.1 million kilowatt hours at $.09 per hour for a period of 20 years. In exchange, an investor would finance the solar array, its ongoing maintenance fees and required labor as well as the roof replacement.
Once the terms of the PPA agreement were reached with Pep Boys, Greystone was able to install an entire roof and solar system with no capital outlay required.
The duration of the entire project took well over a year between city approvals and permits plus the required permitting from the local power provider, Orange and Rockland, and of course the approvals from Pep Boys. The solar array, constructed to supplement 90% of Pep Boys’ electrical energy consumption, was installed by Pfister Energy. The brand new TPO roof system, specified by Greystone for its increased energy efficiency, was constructed by Nations Roof.
- Single Ply, Energy Efficient Cool and Solar Ready TPO Membrane with a 25-year warranty
- 2 megawatt (DC) Ballasted (no roof penetration) Photovoltaic (PV) System with a 20-year warranty including monitoring and maintenance
- ZERO capital outlay required by user
- 8.3% Internal Rate of Return (IRR) to the Investor (including federal and state incentives)
- Net Present Value (NPV) of deal = $3.15 Million ($894,000 in avoided roof replacement costs combined with $4 million solution and installation cost of solar array)
Benefits Realized by Pep Boys
- Reduced and levelized long-term energy costs
- Improved HVAC work environment boost productivity
- Increased long term value of real estate asset
- Attainment of sustainability goals
- Defined best practice for other facilities
About Pep Boys
Since 1921, Pep Boys has been one of the nation’s leading automotive aftermarket chains, providing name-brand tires; automotive maintenance and repair; parts and expert advice for the Do-It-Yourselfer; commercial auto parts delivery; and fleet maintenance and repair to customers across the U.S. Pep Boys operates more than 9,000 service bays in approximately 1,000 locations in 35 states and Puerto Rico. Customers can find the nearest location by calling 1-800-PEP BOYS (1-800-737-2697) or by visiting www.pepboys.com. Pep Boys is owned by Icahn Automotive Group LLC.