The deployment of solar energy resources provides Pennsylvania school districts and other educational organizations the opportunity to save money on utility expenses, enhance student STEM education and career preparedness, and increase climate resilience.
Historically, barriers to increased solar deployment at schools include the cost of the system, lack of understanding about the long-term financial and environmental benefits, and access to information about how to evaluate solar system potential and the steps necessary to construct and operate solar installations.
However, new tools and resources are available to help school districts overcome these barriers. The Inflation Reduction Act of 2022 has opened new doors for school districts as it allows entities without federal tax burden to receive elective payments from the IRS for 30% of the project cost, with additional bonuses available for multiple factors such as being located in a defined energy community. The ability for school entities to receive elective payments associated with Federal Investment Tax Credit incentives makes solar energy system ownership for schools more attractive than ever.
To support Pennsylvania school districts who may want to take advantage of these opportunities, the Department of Environmental Protection has developed a Pennsylvania Solar for Schools Toolkit to assist them in navigating the process of deploying solar projects on K-12 educational facilities across the Commonwealth.
Pennsylvania Solar for Schools Toolkit
The Pennsylvania Solar for Schools Toolkit (PDF) was developed specifically for school stakeholders in Pennsylvania to navigate the process of deploying solar projects at or on K-12 educational facilities across the Commonwealth. The Toolkit is organized in ten basic steps, packed with links to excellent resources, and loaded with new tools, including a sample Request for Proposal and two proformas, one for direct ownership and the other for Power Purchase Agreements (PPA) so schools can compare different scenarios and variables to help make the best decision based on their situation and goals.
The ten basic steps for schools considering implementing a solar project include:
- Build a team
- Assess school’s energy use
- Assess solar potential
- Decide on ownership model
- Determine financial benefits of going solar
- Secure financing
- Issue a Request for Proposal
- Select installer and issue a contract
- Begin construction
- Monitor performance and maintenance
The toolkit includes detailed information about school energy use and the opportunities and limitations of solar projects, provides overviews of varying ownership models available, outlines several financing options available, and highlights incentive programs such as federal investment tax credits as well as existing and proposed state and utility incentive programs.
Supporting resources include:
- Sample Request for Proposals (RFP) document that addresses key considerations when evaluating bids from solar developers
- Proforma Worksheets that allow schools to compare different scenarios and variables and to help determine the ownership model and system parameters that best meet the district’s needs. These proforma models allow a user to choose various assumptions (project cost, project output, the escalation rate of grid electricity, etc.) to predict the project’s financial value.
In addition to the toolkit, the Philadelphia Solar Energy Association hosted series of webinars that explains this toolkit’s content. Videos of these webinars as well as the accompanying slides are available for stakeholders to view and download.
Solar Schools: New Incentives Make Now the Best Time to Go Solar
This webinar provided an overview of new incentives afforded by the Inflation Reduction Act that can assist schools with installing solar energy projects at their facilities as well as previewed the content of the toolkit.
Solar Successes and Lessons Learned: Case Studies from PA Schools
• Solar Successes and Lessons Learned: Case Studies from PA Schools: This webinar provided an opportunity for Superintendents and facilities managers from three school districts across Pennsylvania to describe the steps taken to deploy solar energy systems at their schools, share their lessons learned, and the discuss financial and educational benefits these projects have realized.
How to Pay for Your School's Solar System
This webinar provided information about legacy pathways as well as new opportunities afforded by the Inflation Reduction Act (IRA) for schools to procure and install solar systems either through direct ownership or using a third-party through a leasing arrangement or power purchase agreement (PPA). Subject matter expertise was provided by presenters from the US DOE Office of State and Community Energy Programs School and Non-Profits Program, the Philadelphia Green Capital Corporation, and the National Energy Improvement Fund, and was supplemented by the team from PSEA developing the toolkit. Topics addressed included elective payments and grant opportunities from the IRA (including additional incentives or Energy and Low-Income Communities), green banks and non-profit lenders, and private capital lending options.
The toolkit was developed in partnership with the Philadelphia Solar Energy Association. This project was funded through DEP’s State Energy Program funds from the U.S. Department of Energy.
Inflation Reduction Act (IRA)
Information
The passage of the Inflation Reduction Act (IRA) of 2022 affords school districts new opportunities to reduce the initial capital expenditures associated with the construction and installation of solar energy projects while also allowing for greater long-term operational savings through reduced energy costs. Prior to the adoption of the IRA, entities without a federal tax burden (such as school districts) could only take advantage of Federal Investment Tax Credits (ITC) for solar energy projects through the involvement of a third party that would retain ownership of the system while either leasing the system back to the school entity or selling electricity generated by the system at a predetermined rate through a Power Purchase Agreement (PPA). This private sector third party would realize the benefit of the investment tax credit and pass along the cost savings to the school entity through the negotiated cost of the lease or PPA. While this arrangement allowed for the realization of a portion of the tax credits via the deployment of solar energy systems at school entities, it was difficult for schools to engage in a direct ownership model that both maximizes the tax credit and the long-term operational savings through reduced electricity costs.
Provisions in the IRA allow for entities without a tax burden to receive elective payments from the IRS for 30% of the project cost, with additional bonuses for factors such as domestic content or the project being located in a defined energy community that could increase the ITC direct payment to 50%. There is also an additional 10% bonus for solar installations in low-income communities that will be available through 2025. The ability for school entities to receive elective payments associated with ITC incentives makes solar energy system ownership for school entities more attractive than ever.
The Pennsylvania Solar for Schools Toolkit provides more information about opportunities afforded by the Inflation Reduction Act in Part 3 (Key Steps in A School Solar Project), Step 6 (Secure the Financing for Your Solar Project).
Additional Solar Resources for Schools
Nonprofit and Solar Advocacy Resources:
- Pennsylvania Solar Center: The PA Solar Center has the vision that Pennsylvania becomes a leader in renewable energy through rapid and broad expansion of in-state solar generation. The PA Solar Center operates the G.E.T. (Galvanizing our Energy Transition) Solar initiative, a streamlined process that instills organizations and communities with confidence in the process of going solar by using trusted tools and resources that connect organizations to qualified professionals making the process straightforward and simple. Generation180 and Pennsylvania Solar Center are partnering to provide schools with technical assistance through the G.E.T. Solar program.
- Generation180: Generation180 is a nonprofit working to inspire and equip people to take action on clean energy. Their Solar for All Schools is working to ensure that all Pennsylvania schools can access the benefits of going solar, including reduced energy bills, enhanced STEM education, workforce development, and healthier communities. Generation180 has published a report on solar at Pennsylvania K-12 schools entitled Powering a Brighter Future in Pennsylvania that found that schools with budgets of all sizes are able to go solar without paying upfront capital costs and are benefitting from energy cost savings. Generation180 has also published a Solar Schools Campaign Toolkit as well as a How-to-Guide for Schools.
Federal Resources:
- Office of State and Community Energy Programs: The U.S. Department of Energy Office of State and Community Energy Programs (SCEP) works with state and local organizations to significantly accelerate the deployment of clean energy technologies, catalyze local economic development and create jobs, reduce energy costs, and avoid pollution through place-based strategies involving a wide range of government, community, business and other stakeholders. SCEP has launched the Renew America’s Schools Program to promote the implementation of clean energy improvements at K-12 public schools across the country. This first-of-its-kind investment, funded by President Biden’s Bipartisan Infrastructure Law (BIL), aims to help school communities make energy upgrades that will lower utilities costs, improve indoor air quality, and foster healthier learning environments.