Solar energy in schools is all over the news right now. Between federal grants and tax credits from the Inflation Reduction Act incentivizing solar, to state proposals like House Bill 1032, “Solar for Schools,” that wants to create a state grant to cover up to 50 percent of the cost for solar energy development at Pennsylvania school districts, solar has a lot of buzz. 

Many taxpayers agree it’s good policy for Pennsylvania school districts to review their overall energy consumption, reduce costs, and mitigate price fluctuations. Solar may be an option in a comprehensive energy cost reduction strategy, but it’s not the only solution. Solar supporters will point to robust solar development in California. Solar is growing in California because the average cost of commercial energy per kilowatt hour (kWh) is $0.24, 84 percent higher than the national average. Pennsylvania’s average commercial rate is $0.11/kWh, ten percent lower than the national average. Pennsylvania ranks second in exporting energy, so our costs have remained consistently lower than the national average over the last 25 years. 

When exploring a comprehensive energy strategy for school facilities, Pennsylvania school districts should start with consumption, not the source. A district should work with a qualified energy service contractor to perform a facilities assessment, which includes a review of the age of facilities, useful life of sustaining systems, structural analysis, and energy consumption. This data can help determine how to best prioritize facility improvements and investments as systems become less efficient or obsolete. Districts should be wary of companies that seem to have a predetermined solution. Every district is different and solar is not a one-size-fits-all.

Here are key questions each district should ask:

1. What are the sources of energy the district utilizes? (Electricity, coal, natural gas, propane, biomass, others)
2. What is the cost of that energy per kilowatt hour and how has that rate changed over time?
3. How old are the current systems and technologies using these different sources of energy? 
4. Can those systems be replaced with more energy efficient technology?

These questions will help identify the correct path for any district looking at controlling energy costs and reducing climate impact. Keep this basic truth in mind: the cheapest and greenest form of energy is the energy that was never consumed. Energy consumption avoidance reduces greenhouse gas emissions from all energy sources.  

Solar options for school districts

With solar, districts have the option to own the panels or work with a company to lease the infrastructure. Both options have benefits and drawbacks. When the district owns the panels, they retain control of the property and own all of the energy produced. They can sell excess energy back to the grid for additional revenue. The biggest benefit will be the summer months when the building has the lowest level of use and the solar panels have the highest rate of production. The district is also able to qualify for several grants and tax credits to help pay for the cost of a system. However, the district is responsible for all costs to install and maintain the system.

The lease option is done with a company through a Solar Power Purchase Agreement (PPA). These agreements include a contracted kWh price over an extended term of years where the district agrees to pay the solar company for all of the energy generated by the panels, including energy they don’t consume. The district will need to outlay large amounts of capital, seek out grant funds, or issue a bond for the solar array. Additionally, the solar provider will require the district to upgrade all HVAC systems, convert to LED lighting, and maximize facility weatherization to make these systems more efficient. These upgrades make sure the school facilities consume less total energy and maximize the benefit to the solar company. 

In a PPA, the district does not receive any of the revenue from the additional energy being generated by the solar panels. Instead, the lease company has the ability to sell the unconsumed energy to the grid, profiting off a system generating power on public-owned land. The PPA also requires the district to give all tax credits or other benefits the school receives to the solar company. This additional revenue could be used by the district to help pay for additional facility improvements, increase salaries, offsetting local property taxes, and more, but instead it is going directly into the pocket of solar companies.

To be clear, solar is not a bad deal for schools in PA. The key is how a district adopts and implements solar. The best deal for schools (and taxpayers) is where the district retains more ownership and control of the solar array and property or works with a company that does not trap them in a predatory PPA. The biggest, and most important benefits are when the school receives the revenue from the excess solar energy produced and long-term utility savings while reducing greenhouse gas emissions. These funds can be used to directly benefit the school, the teachers, the students, and the taxpayers.

Katie Hetherington Cunfer is SitelogIQ’s Director of Government Affairs.