Beyond Tax Incentives: How to Make Solar Attractive to Universities

Like the rest of Los Angeles, UCLA has plenty of buildings and gets plenty of sun. Given the University’s interest in sustainability and innovation, you’d think all those buildings would be covered with high-tech solar panels sucking up all that sun. However, UCLA has only one installation, on one rooftop, which generates only two percent of the building’s power supply. The reason behind the dim figures? Price.

The government incentives—rebates, tax credits, bonds, and loans— that make solar photovoltaic systems affordable to businesses and homeowners are for the most part unavailable to institutions of higher education like UCLA. The majority of financial incentives are available in the form of tax credits. Most institutions of higher education, including UCLA, are tax exempt, which makes tax rebates meaningless for them. Without incentives, UCLA and other institutions are often forced to pay upfront installation costs, about 30 percent more per unit than the current price to private consumers.

The sticker shock is understandable, but it’s not all bad news. There are several potential opportunities to help institutions including UCLA drive down the cost of solar PV and expand solar power on campus.

Alternative financing: Colleges and universities across the country are creating new ways to fill the gap left by unavailable government incentives. So far, green revolving funds and student “green fees” appear to be two of the most effective ways universities are closing the price gap.

Purchasing power: Large institutions such as colleges and universities are powerful customers. If these competitive organizations can set aside their differences to invest in solar collaboratively, they could use their massive purchasing power to drive down cost through economies of scale and increased negotiating power with solar PV manufacturers. Working together also allows schools to spread the risk, as well as share in the savings.

Rethink how solar fits into university plans: Even though most institutions of higher education exist in perpetuity, they tend to plan for the short-term. Most schools’ master plans only account for four years. In any four-year window an investment in solar is a huge expenditure, and this short-term view does not take into account the benefit of reduced energy bills over the longer term. Even if spending $10,000 on a system now could save $50,000 dollars over the next 10 years, the net gain is invisible to school budget officers.

I am working in partnership with Focus the Nation and the UCLA Department of Urban Planning, to better understand the barriers that put solar PV out of reach at UCLA and to explore ways to change that through better financing, cooperation and planning. Whether or not UCLA ultimately decides to go with increased solar power, this research will make it easier for all colleges and universities to access solar PV. You can find out more about the research at Focus the Nation’s project page.

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original image (cc) flickr user pure3d