ISSUE OF THE MONTH: SOLAR POWERED SCHOOLS
More and more California schools are going solar, and it may be easier than you think. Going solar can start saving schools and districts money immediately, and can continue for decades to come – so how can California schools afford not to consider solar power? Around the country, K-12 schools spend more than $6 billion a year on energy. The California Department of Education estimates that California schools spend $132 per student each year on energy costs -- more than on school supplies and books. By installing solar panels, schools can produce their own electricity, saving money while reducing their production of greenhouse gases and providing a valuable learning opportunity for students and adults alike. Thanks to a variety of creative financing options, California school districts are discovering that they can install solar panels on multiple schools without providing the upfront capital investment.So how does it work?
There are several ways to achieve the same goal, but the process usually starts with the formation of a district or school committee dedicated to researching solar systems and financing options. (The changing credit landscape this fall requires that schools be thorough in asking questions about financing. Nevertheless, Congress recently extended federal tax incentives for alternative energy, and the greater focus on energy security promises to sustain forward momentum in the solar energy arena.)
One such financing option is a Power Purchase Agreement (PPA). When a school or district enters into a PPA, a solar power company or other third party obtains and/or provides the capital to install the solar system, and then receives the rebates and credits offered by the local utility and the state. The school district then buys all or most of its electricity from the solar company or third party instead of from the regional utility company.
In purchasing electricity from the third party, the school district gradually pays back the capital (and probably some interest) for the investment. The rate the school or district pays to the third-party is typically lower than the cost of purchasing electricity from a utility – in some cases it’s guaranteed to be less. So the school gets solar panels to generate cheaper electricity and reduce carbon emissions without having to come up with a lot of capital. According to Wikipedia, 10% of non-residential photovoltaic installations in the United States used a PPA in 2006, 50% in 2007, and the projection is for over 90% by 2009. There can be pitfalls with any financing arrangement, so it is important to have a committee in place that can ask the right questions. Issues to address when considering a PPA include: Who owns the system? Who will maintain it? What happens to the system at the end of the 20-year contract period? What rates will the school pay for electricity over the life of the contract?
Let’s get specific: In 2007, San Jose Unified School District (SJUSD) teamed up with Chevron Energy Solutions (CES), a unit of the Chevron Corporation, and Bank of America to install 5 mega watts of solar power on the roofs of four of the district’s six high schools. Though San Jose's school board studied solar power options for at least five years, the stiff price for solar hardware was initially an obstacle, SJUSD Superintendent Don Iglesias explains. "[Now] the cost of the hardware basically is being financed through the Bank of America at a fixed rate,” he says. The hardware cost for the first four schools is $18.1 million. Had the district financed the project itself, it would have faced an insurmountable cost of more than $30 million.
Instead, the project, which required no capital investment by SJUSD, is expected to reduce the district’s demand for utility power by 25% and provide $25 million in energy savings over the life of the contract. Bank of America owns the system, and will sell power to the district at a rate considerably lower than market utility rates. CES will operate and maintain the system. The school district and its partners took advantage of federal investment tax credits and incentives offered by the state’s California Solar Initiative, obtaining a total of $4.2 million in financing. The benefits of the new system, believed to be the nation’s largest K-12 solar and energy efficiency program, include a reduction of 37,500 tons of CO2, equivalent to planting 400 acres of trees.
California Governor Arnold Schwarzenegger has promoted solar and other alternative energy tax incentives, motivating companies like Chevron and Bank of America, partners of the San Jose Unified School District. The deal connecting those corporate entities to the school district originated with a high school science teacher, Iglesias says. In her classroom, the teacher "looked at energy and ways to save energy; and part of it was a project she had going with her kids. They're the ones who pulled in Chevron Energy Solutions," Iglesias says. "That's where it came from—the classroom."
Jorge Gonzales, president of SJUSD’s Board of Education, said of the project, “This program is the result of years of research and commitment on the part of San Jose Unified’s Board, and is living proof that schools can improve their facilities and help the environment.” Gonzales added, “It's also an educational opportunity -- it can help teach our school communities about energy efficiency and renewable power."
Like many districts that have gone green, San Jose will take advantage of the schools’ new solar energy panels by adding an environmental component to its curriculum. "There's community learning, which to me is symbolic; then there's the educational component for kids," says Superintendent Iglesias. "For the community's public institutions, we can't just preach it, we have to live it. This is a step in the right direction. Kids are watching what we do and what we say."
Students, for example, will study and analyze the effect of solar energy's cost efficiencies. "Kids that are in high school that are potential mathematicians and scientists will be able to learn from [the monitoring of solar power production] and see physical science at its best."
Berkeley’s Washington Elementary School
There are alternatives to PPA’s, including the path the Washington Elementary School in Berkeley has taken. When Tom Kelly of Berkeley-based KyotoUSA approached the Berkeley Unified School District (BUSD) to propose a pilot solar project, there was a lot to discuss: Which school would be chosen as the pilot and why? How much would the project cost, and where would the funds come from? To find the answers, KyotoUSA and BUSD formed a partnership.
KyotoUSA is a Berkeley-based all-volunteer grassroots organization that encourages U.S. cities and their residents to shrink their greenhouse gas emissions. Together they researched which school had the best roof to accommodate panels, what size project would be most manageable, and how much it would all cost. The estimate for a system that would produce all the school’s electricity was $700,000, which is a lot of money for a cash-strapped California school. The partners had to get creative.
For starters, Washington Elementary was eligible for modernization/construction funds from California’s Office of Public School Construction
which would cover part of the cost. (Many other schools are also eligible for funds from the OPSC—typically, the district has to provide 40% of the funds while OPSC provides 60%. Schools can sometimes use a California Solar Initiative rebate for that match, but CSI rebate funds are dwindling.)
To help bridge the financing gap, KyotoUSA launched the “HELiOS Project Berkeley” to raise funds from foundations and local businesses and individuals. BUSD also took out a low-cost loan, and pursued rebates for energy conservation and renewable energy production. HELiOS’ aim is to “make the project ‘cost-neutral’ to BUSD. This strategy can be applied in any District served by utilities that participate in the California Solar Initiative.”
So how’s it going? The solar installation is now complete, and Kelly reports, “The solar project at Washington Elementary is moving along without a hitch.” Kelly is now working on extending the success of this model to other local schools. To read more about what they did and how they did it, go to : Washington Elementary's Solar Project.
PG&E’s “Solar Schools Program” is committed to helping schools access solar power. Each year the program donates a 1-kilo watt photovoltaic system to forty K-12 schools throughout California. As part of the program, PG&E awards up to $5,000 to K-12 schools with limited resources or in underserved communities, to further their solar science exploration. PG&E offers training for all K-12 teachers at schools located within PG&E’s service areas. Participants in PG&E’s teacher trainings receive both instruction and materials that can be brought back to the classroom to help teach about solar power.
The National Energy Education Development Project (NEED) works to enhance energy consciousness and education through a network of students and educators, business, community and government leaders. NEED offers the “Blueprint for Success,” a manual filled with ideas for incorporating solar energy into school lessons. NEED also offers model solar energy building kits.
The nonprofit Rahus Institute offers workshops for teachers on the basics of solar energy and hands-on projects involving building model houses, mini race cars, and solar-powered fountains. Rahus also offers books and other materials with ideas for incorporating solar energy into the curriculum. Click the link above for upcoming events.