Education and budgets benefit when schools choose solar
By David Potovsky
David Potovsky is a senior project developer for Borrego Solar Systems Inc. and leads its Solar for Schools program. His primary focus is helping districts finance projects through G.O. bond programs and power purchase agreements, he also inspires students through the use of a solar-based curriculum. Potovsky has appeared on discussion panels at several California State School Board Association conferences. Borrego Solar, established in 1980, is one of the nation’s leading financiers, designers and installers of commercial and government grid-connected solar power systems. It has completed more than 1,000 solar power installations totaling more than 35 MW throughout California, the Southwest, New England and the mid-Atlantic.
After years of belt-tightening and recessionary budget cuts across the board, many schools are looking for creative ways to cut costs and safeguard themselves for the long haul. The Department of Energy estimates that nationwide, education facilities spend more than $8.3 billion a year on energy costs. In most districts, utility costs are the second largest budget item after personnel costs; and after personnel costs, they represent the single largest manageable expense item for schools.
For many schools, a solar power installation or solar energy system can provide long-term budget relief. With the incorporation of more computers and digital learning tools, energy will continue to be one of the largest operating budget line-items in the future. Additionally, ample land, unobstructed expanses of roof space, parking lots and/or lunch quads can make implementing a solar energy system a good choice. However, a variety of challenges need to be considered in evaluating solar options.
There are many variables to consider when going solar. The dynamic renewable energy market changes from region to region and from year to year. Much of the payback depends on local rebates, tax credits (for investors), the cost of electricity and the regional carbon trading market (trading of renewable energy credits); all are moving targets.
It’s also recommended that institutions avoid single-sourcing solar power installations and run a competitive bid or issue a request for proposals. Although this may require a few more resources on the district’s end and might lengthen the vendor selection and procurement process slightly, it ensures the obtaining the greatest value — not necessarily price — when partnering with a solar contractor.
What options are available?
A variety of financing options are available when purchasing the solar assets with existing funds isn’t an option, including power purchase agreements (PPAs) and general obligation (G.O.) bonds.
As tax-exempt entities, schools don’t have an appetite for tax credits and incentives, the majority of which make up the solar subsidies available from the federal government, the state and the municipality where the school districts reside. However, a PPA is a program by which a private, for-profit) entity, or third-party, pays for the installation of the solar system and then sells the “green” power back to the customer (the school) at a predetermined discounted (below-the-grid) price. Not only does the third-party monetize all of the incentives and pay the savings forward to the school in the form of a lower rate, it also allows schools to go solar with zero upfront costs. This private-public partnership allows schools to save money from day one, avoid any upfront capital expenditure or risk, and accurately forecast their energy costs for the life of the PPA term, which is usually 20 years. The additional benefit of a PPA is that the third-party that finances the system owns it and is responsible for all the maintenance and repairs. Therefore, it is in the system’s owner’s best interest to make sure the equipment is running optimally in order to recoup their investment.
Another option is to include the cost of the solar installation into a G.O. bond. G.O. bonds provide money for large capital projects such as new buildings, remodeled facilities and renewable energy projects. The district’s general fund budget will benefit from immediate cash savings from the offset on the electricity bill as well as a cash rebate from the utility, in most cases. The savings from this investment can offset other costs such as staff salaries, equipment and educational resources. Using a G.O. bond to go solar is one of the best options for utilizing money allotted for capital intense projects. By including solar in the scope of the work performed with the G.O. bond, the district will in essence be building a “revenue generating” facility with funds that will be repaid by the local property tax base.
In lieu of a G.O. bond, other options include a certificate of participation or tax exempt municipal lease that can be used to raise money in a similar fashion.
Types of installation – Benefits and challenges
Elevated solar support structures built in parking lots or open areas are the most common installation for school districts. The most popular and efficient solar module technologies have weight constraints, and many school roofs were not designed to support the additional loads solar requires. With newer roofing materials that can handle the load, there can still be the issue of limited unobstructed square footage and space constrains that make it impossible for solar to pencil out. However, many new construction projects are being designed with solar in mind and avoid the load and space concerns. Solar support structures utilize existing outdoor space, provide shade to students having lunch or to cars in a parking lot and avoid any potential roof related maintenance issues. There is an additional cost for the structure itself, but the benefits can outweigh the added cost.
Campuses with relatively modern roofs that have recently been re-roofed work well for roof-mounted solar projects. The leading manufacturers of solar panels offer 20- to 25-year manufacturer warranties and historically, these solar energy systems have a usable life of 35 to 40 years. With this in mind, it’s best to align the life of the solar panels with the life of the roof, so the cost of removing the panels to re-roof can be avoided. Roof mounts are the least expensive method for installing a solar power installation, given the fact that the roof itself provides most of the mounting structure.
A variety of ballasted (non-penetrating) and penetrating racking systems exist that can withstand the harshest weather conditions, and the choice will largely depend on the existing roof construction, materials, and projected solar energy system size. A good rule of thumb is to work with the solar contractors during the feasibility site walks to identify large unobstructed areas of roof with flat or pitched surfaces that have no shade from adjacent structures or foliage.
Ground-mount is another solar installation option. Many suburban or rural school campuses have surplus land next to one of the school buildings or adjacent to fields used for sports and outdoor activities. In these instances, a ground-mounted system is recommended. Ground-mounted systems avoid much of the added cost associated with an elevated support structure and avoid any issues associated with a roof-mounted solution. There is a tremendous amount of flexibility with orientation and utilization of available space. Some ground-mounted installations are fixed, while some are installed in the form of a single or double axis tracker with panels that rotate with the trajectory of the sun. In either case, the land needs to be near an existing electrical load to allow interconnection with the utility grid.
The San Diego Community College District installed nearly 3 megawatts of solar on eight different sites. The combination of roof-mounted installations with elevated shade structures in several parking garages and lots helped maximize the available space for solar energy systems that save the district more than $100,000 in energy costs annually. The installations were financed through a PPA, so the district was able to go solar for no money down and the various arrays will be maintained and operated by the system owners. By entering into a PPA, the San Diego Community College District is able to lock in a rate for the clean renewable energy their installations are producing that is 18 percent less than what San Diego Gas and Electric was charging for brown power.
On the East Coast, the Hopkinton Unified School District used solar to qualify for the state of Massachusetts’ Green Communities Designation, which has given them access to additional state funds and subsidies. One of the requirements was that all municipal buildings compiled their energy use and reduced their energy consumption by 20 percent, so the district installed solar on the roofs of the middle school, high school, fire station, and police station. By pooling the various municipal sites together, the aggregate system size was large enough to qualify for PPA financing, and the installations were financed by a third party. With the solar installed, Hopkinton has seen an energy cost offset of about 15 percent.
Benefits outside of savings
In addition to cost savings the benefits of solar can be seen inside the classroom and in the community.
Alternative energy is of particular importance for vocational schools training students in skilled labor such as plumbing, carpentry, and electrician work. At the Lowell Technical High School in Massachusetts, administrators realized their students training to be electricians would be well-served with a foundation in solar power as well. After deciding to install solar at the school, one of the electrical instructors shadowed professional installers contracted by Borrego Solar to learn solar energy basics. The teacher then used the rooftop solar installation and his experience with Borrego Solar to better prepare his students for a career in solar by coaching them through the installation or a test solar array on a campus storage shed.
Whether obtained through a PPA, G.O. bond, lease or any other means, it is important for schools to utilize all opportunities available to offset their high-energy costs. In this era of decreasing resources, solar electric systems will keep more money in the classroom rather than sending it to the utility. This clean and efficient energy source is an excellent platform for education that will create significant savings to your general fund budget for the 30-year life of the system.