REI Takes Its Stewardship of the Outdoors to the Next Level: A Net-Zero-Energy Distribution Center

The outdoor gear retailer REI—the nation’s largest consumer co-op—not only makes clothes and gear for the outdoors, it also donates millions of dollars each year to support conservation efforts nationwide. But it recently brought its commitment to caring for the long-term health of the outdoors home by looking at the infrastructure that supports its operation—and building a net-zero-energy distribution center.

The 400,000-square-foot distribution center in Goodyear, Arizona, serves 60 of REI’s 150 stores nationwide, accounting for over 40 percent of total sales. The distribution center—about the size of three Walmart Supercenters—recently received LEED Platinum certification, the only distribution center in the U.S. to achieve both LEED Platinum and net-zero energy. Not only does it fit well with REI’s mission of caring for the outdoors, but also, and perhaps more importantly, it makes good business sense.


A growing number of retailers and businesses place sustainability as a top priority in their mission statements or brand propositions. But REI went a step beyond by focusing on one of its highest energy use facilities, its distribution center. “Our ability to service our customers in a rapid way tilted toward unsustainable freight flows,” says Rick Bingle, REI’s vice president of supply chain. “We needed to expand our capacity and target that capacity in the most sustainable way.” For that reason, the company chose to build the most sustainable distribution center they could in Arizona, not only to LEED Platinum standard, but also to be energy net-neutral.

REI, founded as a co-op in 1938, has long had an ethos of sustainability. The company built its second distribution center, in 2007, to meet the highest LEED standard it could at the time. “LEED and the U.S. Green Building Council have evolved, and that evolution has paved the way for others to do things further down the path of LEED Gold and LEED Platinum,” says Bill Best, divisional vice president of supply chain. “We wanted to see how far we could go.”


Although many people were skeptical that LEED Platinum and net-zero energy could be reached, RMI helped from the beginning with a collaborative, integrative approach. RMI convened the right players to come together for a design charrette, including the developers, builders, and material handling company. “Getting key stakeholders together at the beginning ensures that important concerns are integrated into the design process. This is essential to produce high-performance buildings,” says Victor Olgyay, a principal in RMI’s buildings practice. The charrette also helped develop a clear understanding of REI’s goals for the project, which included sustainability and energy conservation, workforce satisfaction, and business efficiency. “No organization that sat around the table had all the answers on how to achieve such an ambitious goal [LEED Platinum and net-zero energy]. It required everyone to come together with their different expertise,” says Bingle.

According to Bingle, the biggest challenge was knowing where to start. “When we first added up the energy use, we came up with a load of 4 MW. We didn’t have enough roof size to accommodate a solar array of that scale.” But talking through the different options, they started to see a glimmer of possibility. “The process of the design charrette afforded us the opportunity to take divergent thinking across all the partners, and merge it into a vision that we all could work toward,” says Best.

First the team tackled efficiency measures, including conveyor belts that shut off automatically when no items are present, LED lights with motion sensors, waterless urinals, low-flush toilets, and skylights for daylighting. The building also features air-cooled chillers instead of water-cooled chillers to save water in the desert environment. Once the building was as efficient as possible, the company installed a 2.2-megawatt PV system on its roof. One of the largest rooftop arrays in Arizona, it provides enough electricity to power the entire facility annually and will pay for itself in five years.

The facility is not only efficient energy-wise, but it is also efficient on a production level. The distribution center has the retail industry’s first omnichannel one-touch automated fulfillment system, allowing one person to process items eight times faster than the typical distribution center and with greater accuracy. While high automation often means high energy use, Bingle notes that the building shows that advanced technology and sustainability can co-exist.

REI design models indicated the PV array would generate 101.6 percent of the annual energy demand to achieve net-zero energy. In fact, it is seeing much higher numbers, producing 25–30 percent more energy than the building consumes, even in the summer months where the temperature can reach up to 120° Fahrenheit.


REI clearly built a building that makes economic sense while supporting its value of sustainability. But the company also values a “meaningful workplace,” thus employee comfort was a priority throughout the design and construction process. The facility will employ between 150 and 225 people, and includes a gym, bike storage, physical therapist, and café. Additionally, the warehouse maintains a working environment of 76 degrees with 5 degree variation floor to ceiling, a first for any distribution center in the southwest. Similar to what was implemented at RMI’s Innovation Center, employees can control their own microclimate through innovative hyperchairs. These chairs allow employees to heat or cool their individual space using much less energy than it would take to heat or cool the entire building, and allow for more individual comfort.


REI’s distribution center fundamentally challenged the status quo of how distribution centers are built, by incorporating sustainability and collaboration from the very beginning. “Many people think collaborating among all the different parties would slow the effort. In fact, it actually unified us, kept us on the same page, and helped us execute the project with speed and efficiency,” says Bingle. “RMI’s shaking up of the status quo on the building process and timeline helped the project succeed.” The design charrette was in February 2015, two months later they started clearing dirt, and the center was up and operating in July 2016. “This project had a very ambitious timeframe, and the early discussions really helped the team make good decisions as the project moved rapidly through construction,” says Olgyay.

Incorporating sustainability from the beginning also helped with a great return on investment (ROI). According to Best, “We often look at sustainability with a high upfront cost with a long ROI, and if you are following the standard building process, that’s probably true. But if you’re designing around the concept of sustainability, you find that ROIs are short.”


RMI’s Pathways to Zero Initiative is working with leading companies like REI to show the value of net-zero energy to owners, occupants, and the environment. Hopefully REI’s distribution center will convince other companies that going green makes good business sense. According to Bingle, “The return on investment on this project—we’re getting 20 years of free power—moves green building from being a moral issue to a business issue.” It’s great that REI is proving what RMI has been saying for years—that what makes environmental sense makes economic sense as well.
Image courtesy of REI.