CLEVELAND-Developers Diversified Realty is launching a rooftop solar photovoltaic system at its shopping centers, beginning with projects in California, Colorado, New Jersey and Puerto Rico. Working in partnership with Beltsville, MD-based SunEdison– North America’s largest solar energy services provider–Developers Diversified will undertake a multi-phase deployment with the option of installing systems at hundreds of the company’s 700-plus centers. It is the first retail REIT to establish a major solar strategy, SunEdison says.

“The time was right to put together an initiative that has a benefit for the environment and our tenants, and produces a new revenue stream for Developers Diversified,” says Marc Feldman, vice president of new business development of Developers Diversified, tells “This was unused space for rent.” The company will install solar panels at six centers in the next quarter, with an eye to 30 centers by year-end.

In essence, Feldman says, Developers Diversified will serve as a landlord for SunEdison, which owns, operates and services the panel systems, which produce renewable energy without generating noise, pollution or greenhouse gases.

The result will provide $2.5 million in revenue to Developers Diversified in 2009, while the company purchases energy at a lower price than that of local utilities for its common area, reducing CAM charges. It also can provide the same rates to tenants who opt to purchase the power. Each system also will avoid an estimated 10 million pounds of carbon dioxide pollution, as well as significant amounts of nitrous oxide and methane pollutants, the company says. Backup systems will provide power when solar energy is insufficient.

Predictability of costs will be another major benefit to Developers Diversified, says Attila Toth, vice president of marketing for SunEdison. While not giving specifics on the Developers Diversified contract, typical agreements run for 20 years, he says. Because the source of the energy, the sun, is free, costs are more stable than other energy systems, he says. “We know the initial capital outlay, and that capital cost is not Developers Diversified’s,” Toth explains.

While individual centers have announced plans to utilize solar energy and other REITs are examining photovoltaic systems, Developers Diversified is the first retail REIT to commit to a long-term relationship, Toth adds. SunEdison will handle the installation and maintenance of the systems, and also will work with various state and federal agencies that offer incentives for alternative energy. Both Federal and state incentives are being used for the first installations, he says. “One reason why New Jersey is [among the first locations] is because they have a great incentive program,” Toth explains.

In the past, some developers have casually questioned whether shopping center roofs, particularly on older properties, were strong enough to hold photovoltaic panels. That perception, however, is not accurate, Toth says. “We’ve worked with our roof consultants and SunEdison to make sure that we won’t compromise the structure of our roofs,” Feldman says.

Developers Diversified may be the first major retail developer to establish a significant solar program, but the opportunity is vast for the future, Toth says. SunEdison has the rights to deploy solar energy systems at more than 200 Developers Diversified centers shopping centers, covering up to an estimated 30 million square feet, located in 24 states and in Puerto Rico. The potential capacity of the program is up to 259 megawatts. “We hope that as many centers as we can roll out will be running on solar electricity,” Feldman says. “This is a first for us.”

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