The steady and rapid growth of the solar industry over the last decade is largely a result of the 70% decline in solar installation costs. This is exciting news for K-12 school boards and districts who are seeking to secure short and long-term energy savings through on-site solar energy systems. Over 5,500 K-12 schools have gone solar across the country as school districts seek to provide the multitudes of benefits of solar to their students. The Solar Foundation report provides an excellent overview on this area of research.
School districts are going solar for several reasons: first, they achieve tens of thousands of dollars in annual electricity cost savings. This helps to stretch constrained budgets, which is especially valuable given the expected impacts of COVID – 19. Secondly, school boards want to set examples for their students by acting as good environmental stewards. Solar further enhances school curriculums by offering valuable STEM learning opportunities for students.
The following is a guide for school administrators, board members, and facility managers seeking information about the installation process, savings, financing and other benefits of school solar projects
How much can a school save by going solar?
Your school’s electricity cost savings will depend on several factors. Solar will typically offset between 60% and 85% of a school’s electric load. For a standard 1000-student school, this equates to annual savings ranging from $20,000 – $28,000. For multiple schools in a district, the size of the system and the savings are, of course, much greater.
As mentioned, many factors impact savings, such as average “sun hours” (the amount of sun exposure the panels receive) and the energy consumption of the school during the summer months. The type of financing can also affect overall savings. For the $28,000 example above, schools finance the solar installation with a long-term fixed energy rate that is less expensive than their local utility’s rate, providing consistent utility savings over 20 to 25 years. More about this financing in the next section.
How do schools finance solar for their districts?
Non-profits do not pay taxes and therefore do not qualify for the federal government’s solar tax credits and other tax incentives. The result is the majority of school projects are financed through a power-purchase agreement, or “PPA.” This finance structure allows schools to indirectly take advantage of state and federal tax benefits through a solar PPA financing company. With a PPA, a third-party financier owns and manages the solar system, enabling the school to capture available tax incentives.
The finance company pays for the entire design and installation of the solar system with little or no upfront costs to the school. The school immediately saves on its electric bill by paying the PPA company a lower solar kilowatt-hour electric rate than its normal utility rate. In this win-win, the PPA company recoups its investment over a 20 to 25-year energy contract.
Instead of a PPA, school districts may decide to own their system through municipal bonds or capital improvement budgets. While ownership can typically provide greater long-term energy savings than a PPA, the district will need to be able to fund the upfront costs along with 20 to 25 years of maintenance.
State-specific incentives may also be available for projects, such as the Illinois community solar SREC program. Consult with Inovateus on the type of financing that is best for your budget.
What is the process of installing solar at schools?
As the solar industry matures, the installation process has become more streamlined. First, a school should connect with an experienced school solar developer or contractor to understand the type of solar project options and financing available.
Solar experts can provide an estimate of energy cost savings based on the school’s previous energy consumption. If the school decides to own the system, experienced solar professionals can calculate the payback time and ROI. With solar PPA financing, savings begin immediately, since there are little or no upfront costs.
To provide the school with a solar cost and savings estimate, the installer will ask several important questions:
- What is the best location for the solar array? Does the school have enough land available?
- If a school roof will be considered, what is the status of the roof warranty? Is the roof structurally able to hold the weight of a solar system?
- Will the school’s electrical infrastructure require upgrades?
- How does the school want to incorporate a learning curriculum with the solar array?
Vetting these issues early in the process can streamline the solar feasibility process.
What are the STEM educational benefits of schools going solar?
An on-site solar array provides a unique opportunity for hands-on learning. Students of all levels can get a head start in technology and science learning through curriculums based around solar. As a recent Inovateus Solar example, the students at Saint Pius X grade school in South Bend, Indiana recently completed a solar graph to help their students to understand all aspects of the sun.
The solar industry offers jobs in dozens of fields, including engineering, sustainability, project management, construction, sales, finance, and others. Students interested in working in solar can jumpstart their future careers goals in a variety of fields related to renewable energy.
Solar installers may also offer options for live-streaming solar production portals. With these portals available at a kiosk or from any smartphone, students can track the school’s solar production from the classroom or their home throughout the year.
Solar monitoring displays can even be set up at school entrances. They can not only display savings and real-time solar production, but also become a daily reminder to students, faculty, and parents that the school is committed to a more sustainable community.
Schools stand to offer their students exciting benefits by pursuing solar for their campuses. Inovateus solar professionals are eager to begin the process of determining the financial and educational returns that a school can realize through on-site renewable energy. Contact us for a free consultation.
Timothy Powers is a Research and Policy Associate at Inovateus Solar.
