California Schools Get an A+ in Solar

California schools—from K-12 districts to universities—have consistently shown that going solar for schools is feasible and cost effective. With more than 400 solar energy systems totaling 450 megawatts of capacity installed for schools statewide, California is setting the curve when it comes to solar adoption in the U.S. California’s schools have access to state incentives, loan programs, and a robust industry with consultants and resources available to guide them.

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Newport Mesa Unified School District carport solar installation

For example, Borrego recently completed a 3.2 megawatt (MW) solar portfolio of elevated shade structures across 32 sites for Newport Mesa Unified School District in Southern California. Newport Mesa USD paid for the $13 million system with a $3 million 0% interest loan from the California Energy Commission, $5 million in funds from the Special Reserve Funds for Capital Outlay Project Fund and $5 million from Prop 39. In addition, the District will receive a performance based incentive from the California Solar Initiative program for the first five years the installations are in operation. The savings from the installations will provide an income stream over the life of the system. No general fund capital was used on this project, leaving financial resources for classroom expenses available.

Net Metering for Schools

Newport Mesa USD’s sites are net-metered, meaning any solar energy not used by the district is fed on to the local electricity grid for use by neighboring facilities and the district receives credit from the utility to apply to future energy bills.

In January, California unveiled a successor net energy metering (NEM) program to replace its first program that was expected to hit its cap. The new program, referred to as NEM 2.0, maintains retail credit and also lifts the 1 MW system size limit, so long as the system is sized to customer load. This system size increase allows larger educational facilities to build bigger systems, resulting in better economics over all.

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Campbell Union School District solar arrays

Energy Savings with Solar for Schools

For a number of reasons, solar PV is a particularly effective way to reduce energy costs. Schools demand the most energy use during the middle of the day, when energy prices are at their highest, but because solar energy production is also high during this time of day, solar offsets the highest energy costs that schools typically incur. Schools generally also have large, unused rooftop space, which is ideal for housing a solar project. As the price of solar PV panels continues to drop, and as the cost of utility-provided energy increases, the economic case for solar PV systems will only be stronger.

It seems counterintuitive that shelling out for a large capital expense like solar would result in savings that can be put toward funding educational programs or hiring teachers. But that’s exactly what many California schools have done. With their budgets continuously slashed, California schools have had to get creative to find ways to save money.

The Peralta Community College District (PCCD) needed to reduce its operating costs and succeeded in doing so by installing solar on its Laney College campus. Its 231kW combined roof-mounted and carport system was projected to provide $20,000 in savings, monthly, at the time of completion. The savings in energy costs will continue to increase in parallel with increased energy costs, which are projected to be more than 3% per year for the next five to ten years.

Borrego worked with PCCD around space-use planning, rebates and incentives. Most campuses tend to have multiple buildings with roofs that have the load-bearing capacity to accommodate solar PV systems. Others have available land and are able to install ground-mounted or carport systems – like Campbell Union School District’s 1.5 MW system.

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Financing a School Solar Project

Upon first glance, the idea of installing a solar system might seem costly, but accessible financing mechanisms can make going solar a no-brainer. Most schools pay for the systems outright—like Barstow Community College—but many take advantage of Power Purchase Agreements or loans. If solar energy does make sense for a school facility, there are a variety of financing options to consider.

One funding option for schools—and the option Peralta CCD exercised—is a general obligation (G.O.) bond. The G.O. bond we used is the same type of bond that many communities voted on in November. Because municipal interest rates are at historic lows and energy costs are so high in California, the economics of going solar with a G.O. bond makes sense.

PPAs are a financing mechanism by which a third-party company pays for the installation of the solar system and then sells the power back to the customer at a predetermined cost. Not only does the third-party take on all the tax incentives and pay the savings forward to the school in the form of a lower utility rate ($/kwh), it also allows schools to go solar with zero upfront costs.

Through a PPA, schools can enjoy the benefits of renewable energy without the burden of large upfront capital costs.

Based on a 2014 report from the Solar Foundation, California school districts show a net present value of more than $150/student which, given the size of many school districts, can add up quickly. What’s more important is that the report finds nearly all California schools can save money by installing a solar system.

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Benefits to the Learning Experience

Aside from the economic benefits, solar also provides school districts with a unique learning tool that can be incorporated into K-12 lesson plans across multiple disciplines. After going solar, Borrego Solar’s school customers typically incorporate various solar lesson plans into its curriculum or through onsite, hands-on training and education. Schools have access to production data streaming in real time to monitoring kiosks on campuses and web portals that can be accessed by students and faculty 24/7.

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