"Solar Energy Faces Cloudy Prospects on Warehouse Rooftops…

The Wall Street Journal, authored by Liz Young, dated June 18, 2024.

Industrial real-estate companies have been showing more interest lately in the roofs of their structures, where warehouse operators are looking to cut energy costs, reduce emissions and even make money from the sprawling and mostly unused space by installing solar panels. 

Matt Schlindwein is taking his time adopting the technology, however. The managing partner of East Brunswick, N.J.-based industrial real-estate firm Greek Real Estate Partners said a fraction of the more than 300 warehouses he manages in the Northeast have solar panels on their roofs. 

That’s largely because the highly-touted benefits of solar power run up against serious costs as the panels are brought in: The installations are expensive, he said, and there’s a risk that the heavy panels could damage the building. 

“Number one for a tenant occupying a large-scale industrial warehouse building is a good floor, not a leaky roof,” Schlindwein said. For the past decade, “the amount of benefit that the landlord could have from doing solar was limited,” he said.

Schlindwein isn’t the only real-estate executive with concerns about the hot technology. Warehouse operators across the U.S. have been cautious about installing the panels on their roofs, even as companies have gotten attention for installations on shopping malls, self-storage buildings and distribution centers.  

Commercial buildings in the U.S. installed 1,913 megawatts of solar power in 2023, up from 1,034 megawatts installed in 2014, according to trade group Solar Energy Industries Association and research firm Wood Mackenzie. That compared to 40,290 megawatts installed nationwide last year across all residential, commercial, community and utility projects. 

Low electricity prices and high costs for the green technology have made it difficult for landlords to justify the investment, industry experts say. Structuring the deals can be complicated, with landlords reluctant to take on the cost of an installation when the financial payoff may come years after the average five-year tenant warehouse lease.

Schlindwein said deals involving solar installations have gotten more creative. He’s been setting up more solar-panel arrays over the past two years under agreements with solar-energy operators that lease the roof space directly from the landlord, for instance. Those companies set up and manage the panels and send the energy generated to local utility companies and customers. 

That deal structure offsets some of the risk by creating a new source of revenue, Schlindwein said. 

“It’s enough that it’s motivating to want to consider doing it,” he said. “You still have the same concerns that you used to have, but you’re getting enough of a benefit that you’re willing to overcome those concerns and make the jump and do it.” 

For warehouse operators, solar installations offer a possible solution to a longstanding problem: how to make use of the sometimes-vast acreage on top of their buildings. In addition to solar panels, some developers have added parking to roofs or designed skylights to bring in natural light and cut electricity costs. 

Prologis, the world’s largest industrial real-estate operator, has installed more than 500 megawatts of solar power across its portfolio as it works toward a goal of generating a gigawatt of solar power worldwide by 2025. But the solar installations still represent just 5% of the company’s buildings worldwide, said Vibhu Kaushik, global head of utilities and energy storage at Prologis.

“We have a lot of room to go,” Kaushik said.

Kaushik said the warehouse’s location determines whether the math works. 

In Illinois, for example, electricity cost about 11 cents per kilowatt hour for commercial customers as of March, according to the U.S. Energy Information Administration. Kaushik said that’s less expensive than solar power in that state.

By contrast, electricity in California cost nearly 24 cents per kilowatt hour in March, according to the EIA, while Kaushik said solar power there costs dramatically less.

“States where energy is expensive, solar will pencil out easier. Where energy prices are still cheap, it may not,” he said. “You can come up with a handful of states across the U.S.—you can count them on your fingers—that it actually pencils out.”

Other factors are beyond developers’ control. The return on investment also depends on how sunny it is in a particular location, Kaushik said, noting solar panels produce far more energy on average in Southern California than in Seattle.

In this edition, you can read about the final blow to Chinese 'neutrality' on the Ukraine war with the dismissal of the Swiss peace conference, and how Beijing's commitment to Russia has reached new heights. (POLITICO EU editorial today)

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Final blow to Chinese ‘neutrality’ on Ukraine war

With the dismissal of the Swiss peace conference, Beijing’s commitment to Russia has reached new heights…

POLITICO EU by *Viking Bohman, Patrik Andersson, and Hugo von Essen, June 19, 2024.

*Viking Bohman is an analyst at the Swedish National China Centre currently pursuing a PhD at the Fletcher School, Tufts University. Patrik Andersson is an analyst at the Swedish National China Centre, and his research has featured in publications such as the Journal of Current Chinese Affairs and the Extractive Industries and Society. Hugo von Essen is an analyst at the Stockholm Centre for Eastern European Studies (SCEEUS), where he leads the SCEEUS Eastern Europe Policy Project.

China’s sympathy for Russia was already clear to most observers at the outset of the full-scale invasion of Ukraine in February 2022. Less discussed, however, is the extent to which Beijing’s support for Moscow has grown since. This was made painfully clear in the lead-up to the Swiss peace summit on Ukraine last weekend.

While some European leaders are eager to involve China in efforts to end Russia’s invasion of Ukraine, much to their disappointment, Beijing declined to participate in the peace conference, citing its lack of participation and “recognition from both Russia and Ukraine.”

Following this announcement, in the run-up to the gathering, Ukrainian President Volodymyr Zelenskyy expressed dismay about China’s absence, as well as Beijing actively pressuring other countries to not participate. Russia was “using Chinese diplomats” to “disrupt the peace summit,” Zelenskyy said. And though he didn’t specify which countries were targeted, in early May, China’s designated envoy for the conflict had visited nations like Turkey, Egypt, Saudi Arabia, the United Arab Emirates, Brazil, Indonesia, South Africa and Kazakhstan.

It would, of course, be an exaggeration to say China and Russia are in complete agreement on the war. A review of recent statements and analyses from Beijing and Moscow makes clear that China recognizes Ukraine as a sovereign state, and doesn’t subscribe to Russian narratives about the country being a Nazified Western puppet. It also maintains direct contact with Kyiv, has spoken out against Russian nuclear threats, and hasn’t publicly supported the invasion either. Instead, it has vaguely stated that “the sovereignty of all countries” must be respected, subtly suggesting the invasion might not be justifiable.

But this is about as far as the divergences go, as the two countries tend to agree on key issues.

For example, China has repeatedly expressed support for the “legitimate security concerns” Russia has about NATO’s eastward expansion. In Beijing’s view, the culprit of the conflict is the U.S., which it says has sought to provoke a confrontation in the region.

Over the years, China’s historical skepticism of NATO, which dates back to at least the 1999 U.S. bombing of the Chinese embassy in Yugoslavia, has developed into outright aversion. And Chinese officials view NATO’s June 2022 strategic concept — the first to list China as a security challenge — as confirmation of their suspicions that the organization is set to expand its geographical scope to try and contain the country.

Meanwhile, Beijing has also gravitated toward the notion of “indivisible security,” which posits that nations shouldn’t enhance their security at the expense of others — a doctrine promoted by Moscow for decades, and a criticism aimed at NATO’s activities. Prior to the invasion, China had endorsed the concept in joint statements with Russia. But since then, it’s been included in the Global Security Initiative — a cornerstone of Chinese President Xi Jinping’s vision for international relations — which suggests it will enjoy a more prominent role in Chinese foreign policy.

The pair also share a disdain for Western sanctions — including those imposed on Russia. Chinese officials vehemently oppose American “illegal unilateral sanctions” and say they won’t comply with them. And Xi hasn’t just passively resisted efforts to isolate Russia, providing the country with an economic lifeline, he’s also shown he’s willing to bear both reputational and economic costs to support his neighbor.

Since 2022, China’s leaders have dealt with a serious economic downturn, the sudden and unexplained ousting of two cabinet ministers and growing Western resistance to its global ambitions. The war has only amplified these challenges, with China’s relations with Europe tarnished by Beijing’s support for Moscow. And while China’s been wary of openly violating Western sanctions, multiple Chinese companies have recently been subject to restrictions for trading with Russian counterparts.

But this seems to be a sacrifice Xi is willing to make. In fact, as the West has increased its demands on China, it’s bond with Russia appears to have only strengthened. Trade and defense exchanges have grown significantly, while the Russian people seem to have become more positively disposed toward China too.

The war has only amplified these challenges, with China’s relations with Europe tarnished by Beijing’s support for Moscow.

The longer China maintains its pro-Russian stance, the harder all this will be to reverse. Chinese firms have already adapted their operations to cater to expanding trade relations with Russia. Over time, this structural change will become harder and more expensive to undo. Moreover, Xi’s support of Putin has been personal and highly publicized. And as China’s pro-Russian policies don’t enjoy universal support among Chinese intellectuals, a policy reversal could be seen as a concession to his critics.

After his meeting with Xi in April, German Chancellor Olaf Scholz announced the two leaders had agreed to “coordinate intensively” on holding peace conferences regarding Ukraine. And he made it clear he thinks “China’s word carries weight in Russia.”

It’s true a mediator doesn’t have to be perfectly impartial to be successful. With decisive leverage over one or both conflicting parties, it can cajole them into making compromises that might otherwise be impossible. For such efforts to be successful, however, said mediator must be willing to lean on the dependent parties in a way that can significantly strain its relations with them. So far, Xi has shown no signs of willingness to do so — and the chances of that seem to be decreasing.

European leaders are right to maintain a dialogue with China and to continue demanding Xi uses his leverage. But until China does so, letting Beijing take on a major role in the peace process risks legitimizing the invasion.

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