With the cost of solar technology continuing to fall, what are the benefits to incorporating solar power in school districts throughout the United States? During today's OnPoint, Minh Le, director of the SunShot Initiative and the Solar Energy Technologies Office at the Department of Energy, and Andrea Luecke, president of the Solar Foundation, discuss new reporting on the financial benefits to U.S. school districts in incorporating solar energy technologies. Le and Luecke also discuss the rapid price evolution solar technology has undergone in the last two years.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today are Minh Le, director of the SunShot Initiative and the Solar Energy Technologies Office at the Department of Energy, and Andrea Luecke, president and executive director of the Solar Foundation. Thank you both for joining me.
Andrea Luecke: Thanks for having us.
Monica Trauzzi: Andrea, the Solar Foundation, funded by the Department of Energy, is reporting that more than 3,700 schools in the United States are now incorporating solar power. How are these additions impacting the bottom line for these schools and school districts?
Andrea Luecke: We found a lot of examples of schools saving lots of money through solar on their schools. Our report represents the nation's first ever comprehensive base line for solar on K through 12 public and private schools across the country. Examples in California, there's the Clovis United School District that's saving $2.7 million every single year. There's a school district in New Jersey that's saving $300,000 every single year. There's even a school district in Missouri that's saving $1 million over the course of 20 years. So tons of examples.
Solar on school is -- has -- its threefold benefits, environmental benefits, it helps to enhance educational programing for kids, and of course, the cost savings.
Monica Trauzzi: So Minh, give us a bit of the background on the SunShot Initiative and the role it's playing nationally, and talk about why these numbers are exciting to the department.
Minh Le: Well, certainly -- and we were very excited to be partnered with the Solar Foundation on this study, because it represents a significant study, points out the benefits and the opportunities for schools all across America to really save money. And the point here I think that they're trying to make in this study is that by saving money, the -- those dollars could be better spent educating our children, and that's a great opportunity to use those savings. And we're seeing those savings all across the country, not just in schools, but for homeowners, for businesses and companies alike. They're saving money and they're going solar.
If you look at the data for the solar industry, it's grown phenomenally. Last year, all across America, we deployed about 4.75 gigawatts of solar. That's up from 435 megawatts, over an order of magnitude from 2009. So very dramatic increase, and this year, we expect close to 6.5 gigawatts of solar.
The SunShot Initiative has led the way, has helped lead the way for the industry to experience that growth. We launched the initiative back in 2011, and I'm really excited to report that today, you know, in 2014, just about four years into this decadelong initiative, we're about 68 percent of our way towards our 2020 targets.
Monica Trauzzi: So how exactly do schools afford to implement solar technology? If there's a leader of a struggling school district watching right now, what steps do they take to incorporate solar?
Minh Le: That's an excellent point. In the Solar Foundation study, in this report here, it actually talks about the various financing mechanisms that enable schools to go solar. One of the prevalent forms and the ways to do this is to work with a company on what's called a power purchase agreement, and school districts can sign these power purchase agreements with companies that then install and then maintain, importantly maintain those systems over the duration of those contracts, and thereby saving money for the school district.
Monica Trauzzi: And Andrea, there's recent news coming out of New York City where Mayor de Blasio is now taking steps to incorporate solar in New York City's schools. How does that elevate the dynamic of the discussion, when you have such a major city jumping in and incorporating solar?
Andrea Luecke: Oh, it's really important. This New York City school district itself is positioned to save hundreds of millions of dollars over the course of 30 years, and so it's a great opportunity for this school district in particular, and other school districts within the state and across the country, especially those that are considered to be underperforming, those that don't have high graduate rates or where students are struggling to achieve in terms of test scores. This is an opportunity for schools to take that money saved and reposition it, redirect it toward educational programming. It's a wonderful thing that New York is doing.
Monica Trauzzi: Minh, one of the functions of your office is to push solar so that it becomes more economically viable.
Minh Le: Mm-hmm.
Monica Trauzzi: At what point does solar become cost competitive and economically viable, that it sort of no longer needs --
Minh Le: Right.
Monica Trauzzi: -- programs and incentives?
Minh Le: Right. That's actually the mission of our office, is to lower that cost, quite significantly in some parts of the country, in order for consumers and businesses and schools to choose solar, and it's economically competitive. From our 2010 base lines, it would require us to achieve a 75 percent cost reduction, OK, at various scales, and that's an average across the country.
Now what we're seeing is that it's already economically competitive in certain markets, OK, because the local rates of electricity are -- vary all across the country. The amount of sunlight that lands on any school is very different across the country. So we're already seeing solar to be cost-effective today, even with subsidies, in certain markets.
Now those subsidies, you know, the state incentives or the federal incentives certainly make a larger portion of the country to be competitive, but now what we're seeing is that the prices are coming down very, very rapidly. I mentioned 68 percent of our way towards our SunShot targets, our 2020 targets. That means that most systems are now half of what they were just several years ago. Half the cost just in a few years. And that's making solar more affordable every -- you know, in a lot of places. And so we're going to see more of America become competitive.
In the Solar Foundation report, I believe it talks about 450 school districts where it makes financial sense today to go solar, and those school districts would save I believe over $1 million each over the course of 30 years. And so it makes sense today, and it will make a lot more sense tomorrow.
Monica Trauzzi: So what's the greater challenge for your office? Is it sort of advancing the technology on solar, or pushing deployment?
Minh Le: So actually, I would argue that those two go hand in hand, OK? As we deploy, as we learn how to build something, we learn how to do it better. We learn how to do it cheaper. And that's what helps drive down the price of anything, be it computer chips or be it the price of making cars, OK?
What we see now is that the price of a solar panel, the hardware, is now 1 percent of what it was about 35, 36 years ago. One percent, and that's been driven through -- a large part by technology development led by the Department of Energy. In fact, more than 57 percent of the world records for the solar cell efficiencies were funded by the Department of Energy's solar office, and that's over a 30-year time frame. And that's driven the technology to be better, more efficient, and also deployment helps lower the manufacturing cost, because like I said, the more you -- the more you build, the better you learn how to build it, and you make it better.
Monica Trauzzi: All right. Very interesting, and an ongoing discussion. Thank you both for coming on the show.
Andrea Luecke: You're welcome. Thank you.
Minh Le: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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