Energy

At REI, we are committed to purchasing and supporting clean, renewable energy sources such as solar and wind, while reducing our overall energy consumption through smart, energy-efficient design of our new facilities and energy-efficient retrofits of our existing facilities. Our focus on climate change and energy continued in 2008 as we looked for opportunities for increasing energy efficiency, followed by looking for opportunities to buy renewable energy or generate our own.

Highlights

In 2008, we launched our retail solar initiative, and by the end of the year we had retrofitted 11 stores - more than 10 percent - with solar electric systems producing our own electricity. This included seven installations in California, three in Oregon, and an installation in our new prototype store in Round Rock, Texas. In total, these panels generate an estimated 1.1 million kilowatt hours of energy while eliminating the equivalent of 970 tons of carbon dioxide emissions each year.

To be successful, we had to ensure that REI's retail solar initiative made business sense, both in terms of long-term savings and initial costs. To do this, we chose locations where we could take advantage of both state and federal incentives, such as tax rebates, in order to make our investment competitive with other capital projects.

Electricity and natural gas accounted for 23 percent and 4 percent of our GHGs in 2008, respectively. While this was a year-over-year increase, our efforts to implement efficiency measures paid off by reducing our energy density (the average energy usage per square foot). This means that even though our energy use has increased because of more square footage throughout our operations, we are starting to turn the corner and drive down our overall impact, especially considering the co-op opened nine new stores, and our Bedford, PA distribution center completed its first full year of operations.

In 2008, REI's green power electricity contracts with local utilities and our self-generated energy through solar power provided 24 percent of our retail stores' electricity needs. Depending on location and energy market, this provided us with either a fixed cost for electricity or some security against the rising costs of fossil fuels.

Challenges

REI's total energy impact grew in 2008. Even with the addition of solar power, energy efficient facility design, and the purchase of clean and renewable energy, our use of energy continues to account for a significant portion of our carbon footprint. Our purchase of renewable energy from utilities hasn't grown as much as we would like.

We hold our purchases to a high level of scrutiny: renewable energy must not only improve our environmental impact, but also provide business value through lower cost or by providing a hedge against future cost increases. Very few utility rate tariff structures meet our requirements, and this has slowed our growth in buying green energy. Our specifications for green power contracts are here.

Looking Forward

We are committed to reducing our energy use, increasing the amount that comes from green sources and designing REI stores and buildings to be as energy efficient as possible. These choices include setting aggressive energy efficiency targets for all new construction and implementing energy retrofits throughout our existing operations to slow the growth of energy usage as our business grows.

We will be looking into power purchase agreements which could allow us to generate more renewable energy for our operations. We will also continue to utilize GHG-neutral energy sources from utilities, such as wind, biomass and solar when they are available and make both economic and environmental sense. Lastly, we will continue to seek opportunities to generate our own green, renewable energy when possible.