An Energy Move That Could Save U.S. Schools Millions

It's not often that the interest of the business community, local school districts, and environmentalists all align, but that may be the case when it comes to the country's schools going solar.

The Solar Foundation recently released a report showing that as many as 72,000 K-12 schools across the country, over half of all K-12 schools, could save money by installing solar systems on their rooftops or vacant land adjacent to schools. To put the opportunity into perspective, TSF predicts that schools could easily install 5.4 GW of solar, which would provide the equivalent power usage of 890,000 homes across the country.

A SunPower built solar carport at Northgate High School. Image source: SunPower.

Why schools love solar
Solar energy is not only a way to generate clean electricity for schools, it's a cost saving tool for them as well. SunPower and SolarCity are two of the largest commercial solar builders in the country and they'll build a solar system for a school with $0 down and sell them electricity for less than what they're paying the utility through a lease or power purchase agreement.

This is an ideal solution for schools because it doesn't require any capital outlay and the savings can be significant. The TSF's study found that between 40,000 and 72,000 individual schools could save money by installing solar and 450 individual school districts across the country could save over $1 million over the next 30 years by going solar. You can see below where solar is already installed and where it makes sense for school districts.

Image source: Solar Energy Industries Association.

There's also an educational component for schools and solar. SolarCity has a solar curriculum is offers to schools and has built over 100 Solar Learning Stations to educate students and consumers about solar. SunPower has awarded grants and built educational programs in the U.S. and used its SunPower Foundation to educate people around the world about solar. For these companies, schools are an early touch point with students to build a positive view of solar energy.

SolarCity solar system built at Copper Ridge School. Image source: SolarCity.

The benefit for business
Installing solar systems on unused rooftops is good for schools, but it's also good for companies like SolarCity and SunPower. They lock in long-term contracts with school districts -- at a cost savings for them -- and profit from the difference between those payments and the cost to finance those systems.

In recent quarters, the two companies have built commercial systems they estimate will generate $1.50 to $2.50 per watt in retained value, or revenue over costs discounted to today's dollars. This is a highly profitable arrangement and still provides a benefit to customers that they may not be able to afford on their own.

A win-win for everyone
By going solar, schools are getting less expensive energy and a way to educate students about the industry. For companies, the rooftop space of a school provides a highly profitable power generating asset and a reliable customer.

This is a win-win situation and provides an environmental benefit at the same time. That's rare in the energy industry, but it's one of the benefits of solar energy, which still has a huge growth opportunity in untapped U.S. school districts.

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Travis Hoium manages an account that owns shares of SunPower and is personally long shares and options of SunPower. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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