Costs and benefits of solar panels for schools

As solar has entered the mainstream in the past decade, corporations and institutions with massive energy bills have realized 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. This article will focus on schools and universities, explain why many educational institutions nationwide are installing solar, how much solar costs for schools, and how the process works.

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 more ROI. Thus, big entities like schools stand to save the most with solar.

When it comes to a major financial decision for an institution like a school, one thing is sure: 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 reasonably complex subject with a broad learning curve on topics 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 financing and installation.

Regarding 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, so they can't take advantage of solar tax breaks. As a result, most 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.

Schools also need to decide whether to install an onsite or off-site system, which is determined by how much energy is required 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, installing onsite will make the most sense – the school's roof and surrounding grounds should provide ample space for a rooftop or ground mount installation.

For those still wondering why their school should switch to solar power, there are several 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 that many homes don't have suitable roofs or location types for solar, making a PV installation less cost-effective. For colleges and K-12s, the situation is reversed: the typical school layout is ideal for a solar installation because of flat roofs that provide plenty of unshaded space. A building's roofing material and roof angle can significantly 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 energy cost is expected to continue increasing. Volatile prices set on the utility market can make it difficult for schools to plan and budget for the future. A straightforward 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 energy resource in the world, and significant commercial bids are often where the lowest prices are seen.

There's a clear trend on the EnergySage Solar Marketplace: 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. This 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's 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, making solar-powered universities desirable.

The sustainability movement has taken off in a major way, and most universities have established some type of Office of Sustainability to promote green practices. A massive solar array on a school's rooftop is an easy way to develop 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 undoubtedly affirm credibility that a school in question is genuinely a progressive institution.

If you are a stakeholder for a school considering solar, you are certainly not alone. Thousands of schools have installed solar onsite or on-campus, including big names like Yale, Princeton, Northwestern, the University of San Diego, and the 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 switched to solar, there is objective evidence that thousands more would see huge improvements by 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 30 years 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. When you register your property on our Solar Marketplace, you can receive free quotes from vetted installers local to you; homeowners who get three 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 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, 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 significantly impact your system's electricity production. Collecting a diverse array of solar bids allows you to 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. 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 your property's "sweet spot" is to evaluate quotes with varying equipment and financing offers.

For any homeowner in the early stage of shopping for solar who would like a ballpark estimate for an installation, try our Solar Calculator, which offers upfront cost and long-term savings estimates based on your location and roof type. Check out our quote comparison platform for those looking to get quotes from local contractors today.