Around the country and especially here in sunny California, public and private schools have been among the first large institutions to embrace solar technology. According to one survey, more than 3,500 K-12 schools have put solar arrays on rooftops, in parking lots, and other unused areas of their campuses.
- Cost savings: Solar energy systems can be a long-term hedge against rising energy costs. A private school in Trenton, New Jersey, which (to date) has installed the largest array at a school in the country, produces 90 percent of the energy it needs on a normal day, and even sells excess power to a utility company during peak production.
- Funding: Money is available for these projects. In Chicago, a public school district is now saving 30 percent on its energy costs and using its system to teach kids about solar technologies after it landed one of the many large available solar grants that paid for the bulk of a $3.2 million project.
- Sustainability: Schools can reduce their footprint on the environment. In Chula Vista, California, the Sweetwater Union High School District recently installed solar systems at 23 district schools, eliminating an estimated 7,300 tons of carbon dioxide emissions annually. That’s the equivalent of removing almost 30,000 cars from California’s roads over the next 20 years.
Solar Projects Make Sense for Many – but Not All – School Districts
So, schools are saving money, as well as getting and giving other benefits from solar projects. From a real estate perspective, schools should take a hard look at solar projects for all the above reasons, and also because the end project will increase the value of the property. Solar panels can also be installed in innovative ways that improve unused areas. For example, the panels can be raised above parking lots, creating shaded and covered areas for buses and cars.
As these projects relate to real estate, however, solar projects often don’t come cheaply. California and other states offer incentives to install solar systems and these projects can be financed in a number of ways. However, solar projects still usually involve a significant initial investment.
Solar projects also don’t always go as planned. For example, a Los Angeles community college had a division of Chevron install a $25 million solar array, but then had to scramble to find a way to pay for the system when the financing plan with the company fell apart. In a previous blog post we wrote about a school that wanted to put solar panels on the roof, but discovered the roof wouldn’t support the weight. Students ended up protesting the proposed alternative location on the lawn. Solar projects can also draw community protests. Recently in Phelan, a property association was opposing a proposed 50-acre solar farm, which could supply a school district with power.
Districts Need to Do a Hard Analysis When Considering Solar Projects
We mention these not to give the thumbs down on solar, but to point out that the projects should be analyzed carefully. While it may make sense for some districts to do a project, it won’t necessarily be the right move for others. For example, Solar Energy Industries Association recently reported that of the 125,000 schools in the country, between 40,000 and 72,000 can go solar cost-effectively. If this statement is true, it means that thousands of schools have an opportunity to do projects now. On the flip side, though, it means that as many as 85,000 schools cannot do these projects in a way that makes sense financially. So it’s not the right time for every school to do a solar project – at least, not yet.
Factors to Consider When Planning a Solar Power System
Schools should consider two factors when planning a project. First, larger solar projects get the benefit of economies of scale. This is a fancy way of saying that the average cost per watt produced drops as the project size increases and produces more wattage. That’s because, with larger projects, the fixed costs can be spread out. The good news is that as the technology improves, prices are dropping. This means that solar projects should eventually become affordable for most districts. Districts will also be able to install larger projects that supply more of their energy needs.
In California, nearly 1,000 public and private schools have installed solar arrays. The state leads the country in the number of schools and the amount of energy produced by these systems. A time may soon come when solar panels will be as common as HVAC systems and light bulbs at California schools. However, that is still the future. Schools still need to evaluate carefully whether these projects make sense. As always, districts shouldn’t make decisions about their facilities and property alone, but should consult a commercial real estate consultant that can help develop a facilities plan that includes solar and other green technologies.
If your school is considering a solar project, you don’t have to go it alone. You can get a thorough analysis of the cost and benefits of these projects and all the available options from a consultant whose community values align with your own. Contact DCG Real Estate today to learn more.