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From the Design Quarterly: What’s the payback on solar schools?

March 05, 2018

By Engiell Tomaj

Energy modeling can help school districts make better financial decisions when planning new schools

Five years ago, our client asked us, “If we were interested in solar, what does the payback timeline look like?” At the time, we were unaware that they had also asked an engineering consultant who quickly responded with a standard “30 years.”

Instead of tossing back a quick generic answer, we took our time, looked at the big picture, and ran the numbers in a model we developed regarding not just the cost of photovoltaics, the price of various sustainable features and the energy market, but the funding structure for school districts and other inputs. Rather than a guesstimate, we came back with an in-depth analysis. Our client was impressed.

[Adapted from the Stantec Design Quarterly, Issue 01 – The Sustainable City. Read and subscribe to the Design Quarterly now.]

Since then, we’ve continually refined the model and used it in the design stage with several school district clients in Texas. With Lee Elementary School in the Coppell Independent School District, we can see the results of our energy payback modeling in a built, operational facility.

Lee Elementary School is the first Net Zero elementary school in Texas. 

Why do we do it?

Energy modeling has emerged as a powerful and essential tool, allowing clients and owners to make quicker, better decisions about building design.

This analysis harnesses our expertise in energy efficient design and photovoltaics. It informs our clients as accurately as possible of the options rather than letting them think solar still has a 30-year payback or more. Our model gives our clients confidence that the possibilities have been thoroughly vetted and that we’re giving them the best options available. This process gives us a chance to design our projects so they are PV-ready, should the installation happen further down the road.

Energy modeling has emerged as a powerful and essential tool, allowing clients and owners to make quicker, better decisions about building design.

What are some of the factors that impact payback analysis?

The cost of photovoltaics as well as the funding source our client (in our case, school districts in Texas) will use to pay for the building factor in. We also look at a list of a la carte items that can affect the project’s EUI (Energy Use Intensity measured in BTU per square foot per year). So, we’re look at the cost of PV, utility incentives, bond rates, bond interest, discounted payback, and local laws regarding school funding such as the recapture laws in Texas in our model. In some instances, we are seeing payback on PV at about five years.

Why is this an important step for designing sustainable schools?

Utility companies want everyone to reduce their burden on the grid because the utilities need to maintain capacity for peak load in summer season or suffer us with rolling blackouts. Their goal is to spread demand.

Buildings are similar. You try to design the PV system to offset the building’s baseload one for one, making payback possible. Our model is designed to calculate that payback and accurately predict the timeline in which those energy savings will cover the cost of investment.

Lee Elementary School, part of the Coppell Independent School District, includes environmentally-friendly elements like on-site solar and wind power. Those elements are accessible as teaching tools.

How does the declining cost of PV impact this?

The cost of PV has come down so much that buying renewable energy can be less than the cost of implementing certain sustainable design features on a project. When we designed Lee Elementary School, we were paying raw costs of $3.52 per watt. Now, for an equivalent sized system, PV might be $2 a watt or less for standard efficiency. The race to the bottom in PV costs means that incorporating major sustainability features (a roof or walls with higher R values) might not be your best bang-for-buck. Changing a construction feature might cost you $500,000 on a school yet save you only one unit of EUI. Investing in PV, on the other hand, might be $35,000–$37,000 per EUI unit. More good news? Barring the implementation of tariffs on imports, the cost of PV is only going to go lower as far as we can foresee.

How does this benefit school districts?

With a realistic timetable for payback, school districts can make better decisions on what buildings to build and where to implement PV. Ideally, these bond-financed projects can result in offsets in energy usage and operational costs, freeing up more money in the budget for the classroom, teachers, and educational initiatives—where it’s truly needed.

For more stories that showcase thoughtful, forward-looking approaches to design that build community, visit the Design Quarterly online.

  • Engiell Tomaj

    A buildings engineering service delivery leader in Plano, Texas, Engiell focuses on people, the planet, and economics. A proponent of sustainable design, he’s also involved in showcasing the financial implications of photovoltaic investment.

    Contact Engiell
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