As solar has entered the mainstream in the past decade, corporations and institutions with massive energy bills have started to realize how much money they can save by switching to solar power. There’s already a strong case for residential rooftop solar, but you can make an even more convincing argument for solar in the commercial sector where prices are lower and overall savings can be dramatic. In this article, we’ll focus on schools and universities, explain why many educational institutions across the country are installing solar, how much solar costs for schools and detail how the process works.
Solar panels for schools overview
For schools considering installing solar panels, the reality is that any big educational institution will have major utility costs. Various analyses such as our latest Marketplace Intel Report revealed that larger solar systems earn a bigger ROI. Thus big entities like schools stand to save the most with solar.
How does the process work for schools and universities installing solar?
When it comes to a major financial decision for an institution like a school, one thing is certain: the process will not be simple. Depending on whether the switch to renewable energy is handled by an Office of Sustainability or general facilities and operations, there will likely be a committee designated to research and review solar bids and determine if the project is economically viable.
Solar is a fairly complex subject with a broad learning curve on subjects ranging from tax credits to equipment to financing options. For any primary stakeholder looking to lead the review on behalf of a school, here are some resources that will help you bring everyone up to speed on solar:
- What financing options are available for solar?
- What solar equipment is needed for solar?
- What tax breaks and incentives are available for solar?
- How much energy and money do solar panels save?
The stakeholder in charge of the request for proposal (RFP) for the solar installation will first need to review the options for both financing and installation.
In terms of how to pay for solar, the primary debate is between buying the system outright or contracting with a third party owner using a lease or power purchase agreement (PPA). Most schools are nonprofit institutions, which means they can’t take advantage of solar tax breaks. As a result, the majority of school installations tend to use lease or PPA options to finance the system. However, depending on the contractor you work with, the economics could still make more sense to purchase the system in the end.
Schools also need to decide whether to install an on-site or off-site system, which is determined by how much energy is needed and how suitable the school or university’s roof is for solar. For large educational institutions that house thousands of students and provide offices for faculty, installing off-site is the best way to build a solar array that can generate power to meet a significant portion of electricity needs. For a small or medium sized institution, it will make the most sense to install on-site – the school’s roof and surrounding grounds should provide ample space for a rooftop or ground mount installation.
What are the benefits of schools or universities installing solar panels?
For those still wondering why their school should switch to solar power, there are a number of practical reasons beyond the desire to help the environment and reduce carbon footprint. Here are the top 3 reasons schools across the U.S. are choosing solar energy:
1) Ideal roof types and array space make solar a great option
A barrier for the residential solar market is the reality that many homes do not have suitable roofs or location types for solar, which makes a PV installation less cost-effective. For colleges and K-12s, the situation is reversed: the typical layout of a school is ideal for a solar installation because of flat roofs that provide plenty of unshaded space for the installation. A building’s roofing material and roof angle can greatly impact solar panel output and efficiency, illustrating why this suitability indicator is so important.
2) Solar cuts overall operating costs for the school
Over the past decade, electricity prices have been rising and the cost of energy is expected to continue to increase over time. Volatile prices set on the utility market can make it difficult for schools to plan and budget for the future. A clear way to take control of energy costs is to go the autonomous route by installing solar to generate your own power from the school’s rooftop. As of 2016, solar is the cheapest resource of energy in the world, and big commercial bids are often where the lowest prices are seen.
On the EnergySage Solar Marketplace, there’s a clear trend: as systems get bigger, the cost per watt of a solar panel system falls. The world record for lowest-cost solar energy was set last year in Dubai with a massive solar array bid at under 3 cents per kilowatt-hour, which illustrates why large institutions like schools and colleges stand to benefit the most from going solar.
Big corporations like Apple, Facebook and Google recognize the financial benefits and have launched massive solar farms to power data centers and operations in the past few years. When you pair this commercial-scale benefit with the reality that educational institutions are always looking to find ways to reduce operational costs and lower tuition dues, solar can significantly contribute to savings for a college or K-12 school.
3) Solar-powered schools can improve sustainable brand image, help enrollment
For many students in the modern era, especially in liberal urban environments, the prospect of going to a school or university that is seen as being sustainable and eco-conscious can be a distinguishing factor. Thousands of students seek out schools that will be the best environment to study sustainable practices and green policy, which makes solar-powered universities a very attractive option.
The sustainability movement has taken off in a major way, and the majority of universities have established some type of Office of Sustainability to promote green practices. Having a massive solar array on a school’s rooftop is an easy way to establish a green power brand and offer an edge for students trying to decide between two colleges of similar appeal. Additionally, schools and universities are associated with innovation and thus, having the newest, most carbon conscious and efficient form of energy will certainly affirm credibility that a school in question is truly a progressive institution.
Which schools in the U.S. are leading the way in solar energy?
If you are a stakeholder for a school considering solar, you are certainly not alone. Thousands of schools have already installed solar on-site or on-campus in some form, including big names like Yale, Princeton, Northwestern, University of San Diego and University of Arizona. In addition to colleges and universities, 5,489 K-12 schools have installed solar in the U.S. to date, reaching several million students, according to the Solar Foundation’s most recent solar schools report.
Even though many schools have already made the switch to solar, there is real evidence that thousands more would see huge improvements from sourcing their power from the sun. The Solar Foundation’s report on solar powered schools revealed that, of the 125,000 K-12 schools in the U.S., some 72,000 of them would likely see economic benefits from installing a solar system. Furthermore, the report determined that 450 school districts could each individually reap $1 million in energy savings over a 30-year period if they switched to solar energy.
Three Tips for Solar Shoppers
1. Homeowners who get multiple quotes save 10% or more
As with any big ticket purchase, shopping for a solar panel installation takes a lot of research and consideration, including a thorough review of the companies in your area. A recent report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) recommended that consumers compare as many solar options as possible to avoid paying inflated prices offered by the large installers in the solar industry.
To find the smaller contractors that typically offer lower prices, you’ll need to use an installer network like EnergySage. You can receive free quotes from vetted installers local to you when you register your property on our Solar Marketplace – homeowners who get 3 or more quotes can expect to save $5,000 to $10,000 on their solar panel installation.
2. The biggest installers typically don’t offer the best price
The bigger isn’t always better mantra is one of the main reasons we strongly encourage homeowners to consider all of their solar options, not just the brands large enough to pay for the most advertising. A recent report by the U.S. government found that large installers are $2,000 to $5,000 more expensive than small solar companies. If you have offers from some of the big installers in solar, make sure you compare those bids with quotes from local installers to ensure you don’t overpay for solar.
3. Comparing all your equipment options is just as important
National-scale installers don’t just offer higher prices – they also tend to have fewer solar equipment options, which can have a significant impact on your system’s electricity production. By collecting a diverse array of solar bids, you can compare costs and savings based on the different equipment packages available to you.
There are multiple variables to consider when seeking out the best solar panels on the market. While certain panels will have higher efficiency ratings than others, investing in top-of-the-line solar equipment doesn’t always result in higher savings. The only way to find the “sweet spot” for your property is to evaluate quotes with varying equipment and financing offers.
For any homeowner in the early stage of shopping for solar that would just like a ballpark estimate for an installation, try our Solar Calculator that offers upfront cost and long-term savings estimates based on your location and roof type. For those looking to get quotes from local contractors today, check out our quote comparison platform.