Despite its inherent community and educational benefits, solar energy for Pennsylvania schools was – historically – just not financially attractive. However, two recent developments – Pennsylvania’s Solar for Schools grant program and the Inflation Reduction Act’s Investment Tax Credit – have made it economically feasible for schools to implement (and own!) solar.
Development 1: PA Solar for Schools
Recently, Pennsylvania’s Solar for Schools grant program was signed into law. Through the program, the State will award funds to eligible public-school districts, intermediate units, career and technical schools, and community colleges to purchase and install a solar energy project.
Here’s what you need to know:
- Solar for Schools will be administered by the Pennsylvania Department of Community and Economic Development (DCED).
- The Department of Community and Economic Development has until October 2024 to develop the guidelines for the application and selection process.
- Once the agency opens the application process, schools can ask for grants to cover up to half the cost of installing solar panels.
- Grants will be distributed equally across the state into three regions of equal population.
- School districts within 50 miles of recent coal plant closures will be prioritized.
- Districts that are eligible for the low-income tax credit bonus will be prioritized.
- The state funds can be stacked on top of other donations, grants, or federal funds available through federal incentives through the Inflation Reduction Act.
- Projects must meet prevailing wage requirements.
- Projects must comply with either the Separations Act or the Guaranteed Energy Savings Act.
- Awarded projects will be tracked publicly on the Department of Education website to include the total cost of projects, rebates and incentives.
Development 2: IRA ITC
The Inflation Reduction Act (IRA) breathed new life into schools’ decisions around solar. Signed into law in 2022, the IRA aims to boost investments in domestic energy production and manufacturing, and to reduce carbon emissions by roughly 40% by 2030. It also creates a unique opportunity for K-12 school districts to leverage federal tax credits to help fund investments in clean energy infrastructure.
With the IRA, the IRS will now directly pay the school district the amount of tax credit earned by solar electricity projects. This is known as an “Investment Tax Credit” or ITC, the base amount of which will be 30% of the cost of the solar installation.
When & How to Take Action
Since the guidelines for the PA application process are under development now, your first task is to reach out to your CM3 rep (or info@cm3inc.com) to let us know you would like to be included in our Solar Grant updates. Our solar team is your ears on the ground for what’s happening with PA Solar for Schools program.
Second, start compiling your utility bills since they will be needed once the energy savings calculation process starts. Three years of utility data is especially helpful.
Last, consider reviewing your capital budget to identify key initiatives that could impact the solar project or be conducted in conjunction with it. Ideas include roof replacements, HVAC upgrades, building automation systems, and lighting. (CM3 can also help with this!)