School solar power: Here comes the sun
Educational, operational and financial opportunities to consider when adding solar energy to your K12 district
Solar power can provide a ray of sunshine for districts looking to control energy expenses. A sustainable and clean power source, solar involves very few moving parts and requires little maintenance. It also creates learning opportunities for students and reduces carbon footprints.
Nearly 4,000 K12 schools have been fitted with solar installations as of 2014, according to the “Brighter Futures” report for the U.S. Department of Energy, based on data from the Solar Energy Industries Association.
More than 3,000 of the systems were added between 2008 and 2014, and based on that pace, installations have most likely doubled since then, says Alex Winn, program director of The Solar Foundation, a national nonprofit organization that supports expanding solar power and that helped compile the “Brighter Futures” report.
“A lot of folks have gotten up to speed on the opportunity that solar provides in terms of savings and how those funds can hopefully be returned from operating budgets to other areas for capital improvements, investments in programming or additional teacher salaries,” says Winn.
Five years ago, Granite School District in Salt Lake City partnered with the state to install 5-kilowatt solar arrays on the roofs of four elementary schools. Each array has approximately 20 3.5-by-5.5-foot panels, and is capable of producing 5,000 watts of power per hour at peak sunlight, usually two to three hours at midday.
Along with saving energy, administrators wanted to provide educational opportunities. In science classes, for instance, students can go online to access and analyze the performance data. Monitors in the cafeteria also show how the arrays are generating power, giving students a “hands-on” feel for the workings of solar panels.
Encouraged by the experience, the district last year added a 17-kilowatt system at Cottonwood High School, courtesy of a grant from Rocky Mountain Power’s Blue Sky renewable energy program.
“We’re producing about 13,000 kilowatt hours per year at the high school, so we pay about 5 cents per kilowatt hour,” says district energy management specialist Dan Dotson, who estimates the output is equal to powering the school’s cafeteria.
Rocky Mountain Power’s average rate is around 8.5 cents per kilowatt hour, so electricity produced by the arrays is cheaper. “It’s not a ton but it does defer some costs.”
Funding solar initiatives is an ongoing challenge for districts. For business and consumers, installation and system costs have lowered in recent years thanks to tax credit programs, but schools cannot take advantage of those breaks because they are tax-exempt.
To pay for solar, many districts rely on bond measures and capital budget expenditures combined with grants, loans and rebates. They can also use solar renewable energy certificates (SRECs), which are tradable energy credits based on the electricity generated after a solar power system is installed.
An SREC is earned for every 1,000 kilowatt hours of energy produced by solar; the value varies by local utility, and not every state offers the incentive.
Systems can be purchased outright with cash or a loan, or they can be leased through an energy provider. Districts and energy companies can also sign energy services performance contracts (ESPCs), which focus on energy upgrades and efficiencies, including solar.
In some states, an energy services company installs an array on behalf of the district and receives the tax credits, and then trades the value back to the district.
And some districts bundle several sources of funding. Last summer, Beaumont USD in Southern California installed solar-energy canopies over its high school staff parking lot, using funds from the state’s Clean Energy Jobs Act, California Solar Initiative utility incentives, and other local programs.
The system expects to produce more than 1 million kilowatt-hours of electricity annually.
Myths and meters
Solar’s relatively recent emergence as a viable energy option means significant variation exists in legislation and regulation from state to state, but that has not deterred district administrators.
“We don’t feel like solar is a fad,” says Dave Mundy, superintendent of Sheridan School District in Indiana, which last year became the first system in the state to be completely powered by the sun. The rural, three-building district has arrays on rooftops, on walls and in fields next to schools.
Sheridan employs net metering, in which the district is connected to the regional energy grid and receives credits for days its solar arrays generate more energy than is used, such as during summer vacation months. Those credits are then applied to days when it consumes more energy.
“One of the myths we’re battling now is that we’re going to have this abundance of credits that we’re going to keep and use, and then we’re going to have years of free energy,” says Mundy. “But it’s not set up that way.”
Some years the district will use more power than it generates, while in others it will generate more than it uses; the goal is to be energy neutral in the long run.
To fund its $4.3 million solar project, Sheridan signed a 20-year contract with its regional electric provider that covers all energy used by the district in its daily operations and also includes the cost of the panels, installation and maintenance. The district pays about $305,000 per year.
Mundy estimates that—without the fixed energy cost included in the annual payments—the increase in regional electricity rates this year would have cost his district an additional $30,000 over what was budgeted. The district projects total savings of up to $5 million over the next two decades.
Net metering programs are available in more than 40 states, but the future for these arrangements could be murky. Some power providers and utility companies believe net metering reduces revenue opportunities, and they are pressuring states to change regulations.
Many providers are calling for a reduction in kilowatt-hour credit rates, which could make solar power cost prohibitive for districts as lower rates means systems would not earn as much credit for generating power.
Don’t forget the future
Solar power-purchase agreements, service models, regulations and providers vary greatly, requiring districts to research what local options are available and what would be the best fit.
For instance, Mundy anticipates the Sheridan district will grow over the next few years, so the RFP had to account for the possibility of adding another array or more panels.
It was also important to make sure any installation would not require major upgrades or repairs every five years. The district leadership conducted significant research, interviewing energy providers and solar installers, as well as community leaders, before crafting its RFP. (See sidebar “Consider this RFP” on prior page.)
“You have to understand the financing and the legality involved—it’s not as easy as thinking you’re putting panels in and away you go,” says Mundy.
When vetting energy partners, Winn of The Solar Foundation recommends reaching out to entities such as the Better Business Bureau or the National Association of Energy Association Companies, or checking nonprofit sites like EnergySage.com, for reliable estimates.
A word of caution: Solar installers tend to follow the money, so if a state or local utility reduces credits or grants available for solar projects, contractors may move to another region or suspend operations, making it more difficult to find local experienced, qualified partners or regular service technicians.
Some districts have opted to train their own facilities personnel to maintain equipment rather than rely on outside service companies.
Before determining financing and equipment options, districts should take stock of existing facilities, including the age and condition of any structure being targeted for a solar installation.
An older building or one with a roof that needs renovation may not be a good choice as most installations have 20-year life-spans.
Solar power systems can be connected to an energy grid, or involve photovoltaic batteries or a generator, each of which carries different costs and requirements.
For example, Mundy estimates that a generator, which would produce energy and make the district self-sufficient, would have cost $800,000 to $1 million—a figure that would have been prohibitive over the long term.
“We look at it this way—whoever is sitting here doing our job in 20 years is going to be very grateful,” says Mundy. “To be able to totally run on panels in 20 years is going to be a huge fiscal boon for the district. It’ll be beneficial to the people here, and to our community.”