June 18, 2012
The Journal Report: Innovations in Energy
The Enlightened Classroom
School districts are using solar power to cut their energy bills—and cope with budget cuts.
By JIM CARLTON
Solar power has long been touted for its environmental impact. But now it has a new role: saving teachers’ jobs.
School districts across the country are turning to solar power to cut their electricity costs. With the money they’re saving, they are able to retain more teachers and programs in the face of budget cuts. As a bonus, some schools are using solar installations to teach kids about renewable energy.
More than 500 K-12 schools in 43 states have installed solar panels, many of them over the past three years as solar-power costs have fallen by more than one-third, according to estimates by the Solar Energy Industries Association, a trade group in Washington, D.C., and GTM Research, a Greentech Media Inc. unit in Boston.
“It really is one of the fastest-growing markets and probably will have the most impact in our society, because it will put money back into more teachers and expand education,” says Rhone Resch, president and chief executive officer of the Solar Energy Industries Association.
FUN—AND LEARNING—IN THE SUN Students use solar ovens made from pizza boxes at Rosa Parks Elementary’s solar fair in Berkeley, Calif.
Solar power now is often cheaper than the retail cost of electricity. In California, for example, solar power costs 11 to 12 cents per kilowatt-hour, versus about 17 to 24 cents for retail power. A kilowatt-hour is roughly the amount of electricity it takes to light one classroom for one hour.
Costs have fallen in part because manufacturers around the world have increased production, creating a glut of solar panels. In response to the cheaper prices, demand for solar power has surged, with the generating capacity of new installations more than quadrupling from about 400 megawatts in 2008 to about 1,900 megawatts in 2011, according to the solar trade group and GTM Research.
Cheaper power is particularly attractive to school districts because their budgets have been hit hard in recent years by flagging local economies and resistance to tax increases, and because schools have so few ways to save money without laying off teachers.
Caught in a Crunch
David Peterson, superintendent of the Scottsdale Unified Schools district outside Phoenix, estimates that 90% of the district’s budget goes toward teachers and other staff. Supplies and other essentials take up about 4%, and power accounts for the remainder.
“I don’t have a lot to buy supplies and equipment, and you don’t want to cut staff, because people want class sizes low,” says Mr. Peterson, who notes that the annual budget of the 26,000-student district has dropped to $150 million from $170 million two years ago. “The only way to save money,” he adds, “is by cutting utilities.”
The Scottsdale district is one of many that are adding to their savings by purchasing solar power from a supplier rather than paying for solar equipment and installation themselves. In 2009, the district signed agreements to buy power from several companies that installed solar panels on 19 of the district’s 32 campuses. Under the contracts, the district pays seven cents a kilowatt-hour, compared with the cost of 11.5 cents a kilowatt-hour for power from the electricity grid. That shaves 5%, or $300,000, off what had been a $6 million annual electricity bill, says Mr. Peterson.
“With the savings, I was able two years ago to recall six teachers who had been laid off due to budget cuts,” he says.
Price Certainty
Another advantage of power-purchase agreements, school officials say, is that they let districts lock in a fixed price for what they pay for solar energy. California’s Paradise Unified School District, for instance, last year signed a contract with SolarCity Corp., based in San Mateo, to buy solar power at a cost 15% below the going rate for utility power, with no price increase over the 15-year term of the contract, says Roger Bylund, the district superintendent. He says the district expects to save $50,000 a year.
“In the context of the budget crisis in California, the savings have allowed us to lay off fewer teachers and reduce cuts to programs,” Mr. Bylund says.
SunPower Corp., of San Jose, Calif., is installing a total of 30 megawatts of solar-power capacity at K-12 schools in the state, which leads the nation in solar installations in part because of its long-standing subsidy program. “All told, California schools are expected to save $1.5 billion over the next 30 years through the use of on-site solar-power systems,” says SunPower spokeswoman Ingrid Ekstrom.
Still, solar power isn’t without its challenges for schools. One is that the panels are prone to theft or vandalism if they are made too accessible, school officials say. Another risk is that a district will agree to pay more than it should under a power-purchase contract, says Russell Driver, an industry consultant in San Francisco. That can happen if energy prices don’t rise as much as expected—or even fall—over the life of the contract, or if the district simply fails to negotiate skillfully.
But solar energy also can provide value beyond cost savings for schools, as an educational tool. At Rosa Parks Elementary in Berkeley, Calif., students race solar-powered cars, operate a solar-powered decorative fountain and participate in an annual solar fair. Officials of the Berkeley Unified School District say that while children are learning hands-on about renewable energy, the $45,000 in annual savings the district expects to achieve with installations on two schools so far will help offset budget cuts.
“I think it’s a no-brainer,” says William Huyett, superintendent of the 9,500-student district across the bay from San Francisco.
Mr. Carlton is a staff reporter in The Wall Street Journal’s San Francisco bureau. He can be reached at jim.carlton@wsj.com.
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