Amazon shut down solar power systems at all of its US facilities in 2021 after a series of fires and explosions, including one at its Fresno warehouse in 2020.
Fresno Fire Department
On the afternoon of April 14, 2020, dozens of firefighters arrived at a Amazon warehouse in Fresno, California, as thick plumes of smoke rose from the roof of the 880,000-square-foot warehouse.
Some 220 solar panels and other equipment at the facility, known as FAT1, were damaged by the three-alarm fire, which was caused by “an undetermined electrical event within the roof-top mounted solar system,” said Leland Wilding, Fresno fire chief. investigator, wrote in an incident report.
A little over a year later, about 60 firefighters were called to an even larger Amazon facility in Perryville, Maryland, to put out a two-alarm blaze. local news reported outlets.
In the intervening months, at least four other Amazon fulfillment centers caught fire or experienced electrical explosions due to failures in their solar power generation systems, according to internal company documents seen by CNBC.
The documents, which have never been made public, indicate that between April 2020 and June 2021, Amazon experienced “critical fire or arc flash events” at at least six of its 47 North American sites with solar installations, affecting the 12.7% of said installations. Electric arcs are a kind of electrical explosion.
“The rate of dangerous incidents is unacceptable and above industry averages,” an Amazon employee wrote in one of the internal reports.
The solar bug underscores the challenge that Amazon and many other large corporations face in their quest to reduce their environmental footprint and reduce reliance on fossil fuels. Amazon has been among the most aggressive. In 2019, founder Jeff Bezos thrown out The Climate Pledge, which promises the largest online retailer will cut emissions to zero by 2040, embrace renewable energy and move away from gas-guzzling delivery vans, including through an investment of more than $1 billion dollars in an electric vehicle company. Rivian.
Amazon’s learning curve with solar
US corporations are under pressure from regulators and a growing subset of investors to set and report on environmental, social and governance (ESG) goals.
Many will be able to reap financial rewards for renewable energy efforts after Congress passed the Inflation Reduction Lawwhich includes climate provisions designed to reduce the country’s carbon emissions by about 40% by 2030.
Commercial solar power in the US is expected to see 8% annual growth over the next five years, thanks in part to the legislation, according to Wood Mackenzie solar analyst Michelle Davis. Warehouses can harness solar energy to a great extent, she said, because they have large roofs and the systems can power all of the heating, ventilation and air conditioning, refrigeration and other energy-intensive systems located inside.
But costly and dangerous problems can arise.
Solar power systems on the roof of the Amazon warehouse in Fresno caused a three-alarm fire in 2020.
Fresno Fire Department
In June of last year, all of Amazon’s US solar-powered operations had to temporarily go offline, internal documents show. The company had to ensure that its systems were properly designed, installed, and maintained before “reactivating” any of them.
Amazon Erika Howard told CNBC in a statement that the incidents involved systems run by partners and that the company responded by voluntarily turning off its solar-powered roofs.
“Out of an abundance of caution, following a small number of isolated incidents with third-party owned and operated onsite solar systems, Amazon proactively shut down our onsite solar installations in North America and took immediate action to re-inspect each installation by a leading firm of solar energy technical experts,” the statement said.
Those details did not appear on Amazon’s 100 page sustainability report for 2021, which was released in early August. In that report, available to the public through Amazon’s sustainability website, the company said rooftop solar was powering 115 of its distribution centers around the world by the end of 2021, up from more than 90 in the middle of the year. Most of them are outside of the US.
“Many of our compliance facilities in the US, Europe, and India are powered by on-site solar power, where a rooftop installation can power up to 80% of the facility’s energy use,” the report says.
As of April of this year, Amazon had on-site solar power at 176 facilities, according to its website. The solar program was launched in 2017.
“As inspections are completed, our on-site solar systems are turned back on,” Howard said. “Amazon has also created a team of dedicated solar experts who oversee the construction, operations and maintenance of our systems internally to ensure the safety of our systems.”
Excluded from the public sustainability report is any mention of the costs incurred by Amazon when there is a failure. An Amazon employee estimated, in documents circulated internally, that each incident cost the company an average of $2.7 million. Costs included third-party audits of major solar systems, checks on how much electricity they generated, and repairs to any broken or defective parts of the systems’ roof that inspectors identified.
The Amazon employee also said the company would lose $940,000 per month, or $20,000 for each of the 47 North American sites taken down, as long as solar energy remained offline. There could be additional costs to Amazon depending on contracts with clean energy partners for renewable energy credits, the documents show.
To date, Amazon has contracted with third-party vendors to design and then install rooftop solar PV systems and large backup batteries on site. other important retailers, including Walmart Y objectivethey also installed solar roofs and adopted programs to lower their energy bills and meet sustainability goals.
In addition to its warehouses, Amazon has some solar roof systems at its Whole Foods stores. Amazon and its auditor, Clean Energy Associates (CEA), have delayed inspection of solar roof systems at Whole Foods locations until 2022, according to the documents. At the end of 2021, four years after acquiring Whole Foods, Amazon was still working on getting technical information on renewable energy assets in stores.
Installation of solar panels on the roof of a Walmart store in California.
To maintain tighter quality control of its solar power systems, some Amazon employees recommended bringing more operations in-house. The fire in Perryville, Maryland, which was the sixth failure in just over a year, prompted the company to take systematic action.
On June 17, 2021, about a week after the warehouse fire known as MDT2, Amazon’s sustainability division ordered owners and developers of solar roof systems at its US warehouses to dismantle them. Solar roofs would no longer generate electricity from the sun or produce renewable energy credits.
Amazon then contracted with Denver-based CEA to conduct a third-party audit of its rooftop solar systems in the US, Asia-Pacific, and Europe, Middle East, and Africa region.
Late last year, while CEA was still conducting its inspections, it reported to Amazon one critical and 259 major findings in Amazon’s rooftop solar portfolio. Problems included mismatched module-to-module connectors, improper connector installation, poor cable management and evidence of water intrusion into the inverters, according to internal documents.
Problems with inverters, which convert solar energy into usable electricity, were identified as the likely cause of a fire in at least one Amazon warehouse. Wilding, the Fresno fire inspector, concluded that the fire at FAT1 “originated in or near two inverters,” according to an investigative report obtained by CNBC through a public records request.
Faults and inadequate installations
Amazon blamed third-party partners and suppliers for the biggest issues uncovered by CEA and other teams working on facilities and sustainability initiatives.
“Over the past five years, solar failures have been caused by improper installation techniques, improper start-up of a new system, improper system maintenance, and equipment malfunctions,” the documents say.
Amazon teams working on facilities and sustainability initiatives devised a two-part plan to help prevent future rooftop solar program failures.
In late 2021, the divisions requested $3.6 million in funding to re-inspect sites where significant findings were identified to ensure systems were safe to come back online, according to internal correspondence.
Internal teams also began urging Amazon leaders to rely more on salaried employees and less on outside vendors. Over time, the company hired more solar energy experts focused on procurement, design, construction, and maintenance globally.
In some cases, management was remarkably slow to respond. For example, groups within the company that agitated for change became leadership by approval of contracting, re-inspection and re-energization plans. But the efforts were stalled for months by top Amazon executives, including Kara Hurst, vice president of global sustainability, and Alicia Boler-Davis, senior vice president of global customer fulfillment, who left the company in June 2022, according to internal correspondence seen by CNBC.
Job postings suggest that Amazon is still looking to hire people internally for solar operations.
The company was recently looking for someone to manage sustainability projects at its North American facilities, including rooftop solar. there is a current list for a technical program partner in the solar team says a key aspect of the position is collaborating with “internal partners” in global design, solar construction and sustainability, among other divisions.
As it tries to increase its staff, Amazon has acknowledged that going green comes with obstacles, particularly for a company “of Amazon’s size and scope.”
“But at Amazon, we don’t shy away from big challenges,” Hurst wrote in the letter that kicked off the 2021 sustainability report. “We don’t have all the answers today, but we believe in the need to act now.”
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