While working to reduce overall energy consumption, we are piloting ways that JCPenney can support the use of renewable energy. In 2008, JCPenney engaged SunPower Corporation to install solar power systems on nine JCPenney stores in California and New Jersey. Producing 3.7 megawatts of clean electric power, the systems will help avoid emissions of approximately 146,000 tons of carbon dioxide over their 30-year expected lifetime.

The solar systems are financed, owned and operated by a third-party financier, from which JCPenney purchases the solar-generated electricity under a power purchase agreement. The rooftop installations, completed in December 2008, will provide immediate savings through lower-than-utility energy costs and long-term price stability for nearly 25% of the energy used at the stores. The nine pilot stores will also benefit from the installation of new energy-efficient lighting and advanced energy management systems that will help reduce their energy consumption. 

JCPenney has also reached an agreement with Broadstar Wind Systems on a pilot program to install wind turbines at JCPenney’s 1.6 million-square-foot distribution center in Reno, Nevada. The program will utilize Broadstar’s innovative, building-mounted AeroCam wind turbines, which are more compact and are expected to capture energy and generate power more efficiently than conventional three-blade turbines. Installation of the system is expected to be completed in spring 2009, after which JCPenney will purchase electricity generated by the system from Broadstar.

We will closely monitor the results of these pilot programs to determine how we can best leverage these technologies to make use of renewable energy while also benefiting our business.