How a Toyota dealership built a canopy to protect inventory and generate electricity

From June 2018 through September 2019, four major hailstorms pelted the inventory at Stapp Interstate Toyota north of Denver.

Although insurance covered the damages, its Toyota Financial Services-preferred provider chose to walk away after Stapp's policy expired, citing the high risk in an area prone to such severe weather. When the store in Frederick, Colo., moved to another insurer, its deductibles and premiums soared.

Faced with rising costs — and the ever-present prospect of more damaging storms — Dealer Principal Brion Stapp decided to take a seven-figure gamble in the form of a 53,000-square-foot hail canopy that includes 720 solar panels.

Stapp reasoned that insurance costs would fall once providers saw the reduced risk to his inventory. Aside from that, he thought, the dealership could recoup some money by generating its own electricity.

An Obama administration-era solar tax credit, as well as a Trump administration depreciation opportunity, helped with the costs, and construction began in early 2020. Despite a pandemic and semiconductor shortage that have depleted the amount of inventory needing protection, the bet is paying off.

"Even though we have very few cars on our lot right now, we're still very, very happy with the decision we made in terms of a short-term, long-term and customer-experience perspective," Stapp told Automotive News.

Over the past year, Stapp generated all of the electricity it used from the bifacial panels, which not only take in direct sunlight but also get power from light reflecting off the hail canopy onto their back side. The store previously was paying about $7,000 per month for electricity.

When Toyota Financial Services learned of the project, it worked with the dealership to create a new insurance program that would reward the investment. It allows Stapp to pay lower premiums by adjusting on a monthly basis the number of vehicles it insures based on inventory levels, whereas the old policy made the store insure a topline number that didn't change.

"It's a much more flexible, friendly policy that's in place that truly protects the inventory we have," Stapp said.

The new program, called Toyota Insurance Management Solutions, has been rolled out to other dealers across the country.

"We consistently hear the best dealer-manufacturer relationship is between Toyota and its dealers, and this is a perfect example," Stapp said. "They legitimately saved our business hundreds of thousands of dollars per year."

There's been one minor hailstorm since the project was completed. There was no damage to Stapp's inventory — or the canopies, which are made from a trampoline-like material.

"I was watching from the dealership and walked under the canopies to see how they would act and they did a tremendous job," Stapp said.

The solar panels also are designed to withstand hail, though severe storms could break them. Still, Stapp said it's better than the alternative.

"Those panels are better equipped to handle the hail than the aluminum hood of a Toyota Prius," he said.

The canopies can cover up to 350 vehicles, so the dealership can protect its entire inventory once the chip shortage ends and the lot becomes fuller again.

In addition to providing hail protection, the coverings keep vehicles cooler in the summer and prevent them from being buried under snow in the winter.

"It's a dramatically more enjoyable experience for the customers," Stapp said. "We basically created an outdoor showroom."