NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Contract No. DE-AC36-08GO28308

Solar Schools Assessment and 

Implementation Project: 

Financing Options for Solar 

Installations on K–12 Schools

J. Coughlin and A. Kandt 

National Renewable Energy Laboratory

Technical Report

NREL/TP-7A40-51815

October 2011
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

National Renewable Energy Laboratory

1617 Cole Boulevard

Golden, Colorado 80401

303-275-3000 • www.nrel.gov

Contract No. DE-AC36-08GO28308

Solar Schools Assessment 

and Implementation Project: 

Financing Options for Solar 

Installations on K–12 Schools

J. Coughlin and A. Kandt 

National Renewable Energy Laboratory

Prepared under Task No. SM10.18J1

Technical Report

NREL/TP-7A40-51815

October 2011
NOTICE

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i 

Contact Information

Jason Coughlin

National Renewable Energy Laboratory 

1617 Cole Boulevard 

Golden, CO 80401 

(303) 384-7434 

jason.coughlin@nrel.gov 

www.nrel.gov 

Alicen Kandt

National Renewable Energy Laboratory 

1617 Cole Boulevard 

Golden, CO 80401 

(303) 384-7518 

alicen.kandt@nrel.gov 

www.nrel.gov 

Tom Kelly

KyotoUSA 

HELiOS Project

800 Hearst Avenue

Berkeley, CA 94710 

(510) 704-8628 

kyotousa@sbcglobal.net

www.kyotousa.org and www.heliosproject.org 
ii

Sponsor 

This report was made possible through funding from the Solar America Showcase activity of the 

U.S. Department of Energy’s Solar Energy Technologies Program. To learn more, please visit: 

www.solar.energy.gov/solar_america_showcases.html
iii

List of Acronyms and Abbreviations

AC alternating current 

ARRA American Recovery and Reinvestment Act

BAB Build America Bond 

CA-CHPS California Collaborative for High 

Performance Schools 

CDE community development entity

CDoE California Department of Education

CDLAC California Debt Limit Allocation Committee

CEC California Energy Commission 

CHPS Collaborative for High Performance Schools 

CREB Clean Renewable Energy Bond 

CSI California Solar Initiative

DC direct current

DOE U.S. Department of Energy 

DSA Division of the State Architect

DSIRE Database of State Incentives for 

Renewables and Efficiency

ECM energy conservation measure

EE energy efficiency

EERE energy efficiency and renewable energy 

EPA U.S. Environmental Protection Agency 

EPAct Energy Policy Act 

ESCO energy service company 

ESPC energy services performance contract 

FEMP Federal Energy Management Program

FERC Federal Energy Regulatory Commission 

FMV fair market value 

FY fiscal year

GHG greenhouse gas

HIRE Act Hiring Incentives to Restore Employment Act

of 2010 

HPI High Performance Incentive 

HPS High Performance Section

HVAC heating, ventilating, and air-conditioning 

IOU investor-owned utility

IRS U.S. Internal Revenue Service 

ITC Investment Tax Credit 

kW kilowatt 

kWh kilowatt-hours 

MACRS modified accelerated cost recovery system

MUSD Milpitas Unified School District

NAESCO National Association of Energy Service Companies 

NMTC New Market Tax Credit 

NREL National Renewable Energy Laboratory 
iv

O&M operations and maintenance 

OPSC Office of Public School Construction

PG&E Pacific Gas and Electric Company

POU publicly owned utility

PPA power purchase agreement

PV photovoltaic 

QECB Qualified Energy Conservation Bond 

QSCB Qualified School Construction Bond 

QTCB Qualified Tax Credit Bond

QZAB Qualified Zone Academy Bond 

REC Renewable Energy Certificate

SAB State Allocation Board

SDG&E San Diego Gas and Electric

SFP school facility program 

SJUSD San José Unified School District 

SMP Solar Master Plan

TREC Tradable Renewable Energy Credit

W watt

Wp watt-peak
v 

Executive Summary

The Sequoia Foundation is supporting three California public school districts—Oakland, 

Berkeley, and West Contra Costa Unified School Districts—in the development of Solar Master 

Plans (SMPs), documents that are intended to be incorporated into the districts’ facilities master 

plans. The National Renewable Energy Laboratory (NREL) is providing technical assistance to 

these school districts and the Sequoia Foundation as part of the U.S. Department of Energy 

(DOE) Solar America Showcase program (see 

http://apps1.eere.energy.gov/news/progress_alerts.cfm/pa_id=165). One element of this 

assistance is the development of a resource guide for financing the installation of photovoltaic 

(PV) systems on California’s public schools. This guide contains an overview of financial 

options. A variety of templates, signed project documents, and other reference materials that 

school districts can review as they pursue their solar electricity generation projects were 

provided in a separate appendices document to the three school districts. Some of the documents 

are publicly available online, and, where this is the case, links to the websites are provided. 

This document focuses on financial options developed specifically for renewable energy and 

energy efficiency projects, including the traditional methods of financing capital investments at 

schools. Section 1 provides an introduction to financing PV on schools, including consideration 

of energy efficiency, roof viability, and classroom impact. Section 2 discusses the directownership option. After selecting a solar developer through a request for proposal (RFP) process, 

the school district finances the project’s purchase price with 100% debt financing which could 

include traditional tax-exempt municipal bonds, leasing, or taxable bonds that provide a form of 

federal subsidy. Section 3 focuses on the third-party finance model, including power purchase 

agreements and energy services performance contracts, with a brief description of New Markets 

Tax Credits. Examples and case studies are incorporated when relevant and available. The 

separate appendices to this report include a number of pertinent documents related to financing 

solar installations on public schools and other public facilities. 

It is important to remember that all aspects of financing renewable energy systems—regardless 

of whether they are in school districts or in other settings—are very fluid and dynamic. Laws are 

changing, incentives are being offered or exhausted, federally subsidized bonds come and go, 

and interest rates rise and fall. Establishing the cost of projects—whether owned by a district or 

by an investor—also changes based on local economic conditions, tax law, installation costs, 

utility tariffs, and how much profit an investor must make to participate in a third-party 

installation. This document is intended to provide an overview of the basics of PV projects and 

PV financing. Once you have a good understanding of your options, you are encouraged to seek 

additional help from trustworthy colleagues in the industry. 

Note that newly elected State Superintendent of Schools Tom Torlakson has created a “Schools 

of the Future Initiative,” which recommends changes in policy, laws, and regulations to help 

fast-track improved energy efficiencies and renewable energy systems for California’s public 

schools. This effort could result in additional opportunities for school districts beyond what is 

described here. Updated information and resources are available on the HELiOS Project website 

at www.heliosproject.org (accessed June 8, 2011). 
vi 

Table of Contents

List of Figures ........................................................................................................................................... vii

List of Tables ............................................................................................................................................. vii

1 Introduction to Financing Solar Installations on K–12 Public Schools.......................................... 1

1.1 Direct Ownership .................................................................................................................1

1.2 Third-Party Ownership ........................................................................................................2

1.3 Energy Efficiency and Benchmarking .................................................................................2

1.4 Solar Photovoltaics ..............................................................................................................3

1.4.1 Siting Photovoltaics ....................................................................................................4

1.4.2 Roof Condition............................................................................................................5

1.4.3 School Closings ..........................................................................................................6

1.4.4 Classroom Impact .......................................................................................................6

2 Direct Ownership of Photovoltaic Systems....................................................................................... 6

2.1 Using Cash on Hand ............................................................................................................8

2.2 California Energy Commission Loans for Energy Efficiency and Renewable Energy .......8

2.3 Other Tax-Exempt Financing ..............................................................................................8

2.3.1 Tax-Exempt Municipal Leasing .................................................................................8

2.3.2 Office of Public School Construction Funds ..............................................................9

2.4 Qualified Tax Credit Bonds ...............................................................................................12

2.4.1 Build America Bonds ................................................................................................12

2.4.2 Hiring Incentives to Restore Employment Act of 2010 and the 

Impacts on Qualified Tax Credit Bonds ......................................................................13

2.4.3 Clean Renewable Energy Bonds ...............................................................................14

2.4.4 Qualified Energy Conservation Bonds .....................................................................14

2.4.5 Qualified School Construction Bonds ......................................................................14

2.4.6 Qualified Zone Academy Bonds ...............................................................................15

3 Third-Party Financing ........................................................................................................................ 16

3.1 Power Purchase Agreement ...............................................................................................16

3.1.1 Advantages of the Third-Party Power Purchase Agreement Model for Solar ..........17

3.1.2 Disadvantages of Third-Party Ownership .................................................................18

3.1.3 California Case Studies of Third-Party Financing Solar on 

K–12 School Districts ..................................................................................................19

3.1.4 Third-Party Power Purchase Agreements and New Market Tax Credits .................22

3.2 Energy Savings Performance Contracting .........................................................................22

3.2.1 Incorporating Photovoltaics into an Energy Services Performance Contract ...........23

3.2.2 Combining Photovoltaics with an Energy Services Performance Contract ..............23

3.3 Resources ...........................................................................................................................24

4 Summary ............................................................................................................................................. 24

5 References .......................................................................................................................................... 25

Appendices ................................................................................................................................................ 28
vii 

List of Figures

Figure 1. PPA flowchart (NREL 2010) ........................................................................................ 17

Figure 2. Solar PV array hosted by Milpitas Unified School District (Credit: John Cimino) ...... 21

List of Tables

Table 1. Application Filing Timelines .......................................................................................... 10

Table 2. Status of Funds ................................................................................................................ 11

Table 3. High Performance Incentive Points Summary [12] ........................................................ 12
1 

1 Introduction to Financing Solar Installations on

K–12 Public Schools

Solar energy systems installed on public schools have a number of benefits that include utility 

bill savings, reductions in greenhouse gas emissions (GHGs) and other toxic air contaminants, 

job creation, demonstrating environmental leadership, and creating learning opportunities for 

students. In the 2011 economic environment, the ability to generate general-fund savings as a 

result of reducing utility bills has become a primary motivator for school districts trying to cut 

costs. To achieve meaningful savings, the size of the photovoltaic (PV) systems installed (both 

individually on any one school and collectively across a district) becomes much more important; 

larger systems are required to have a material impact on savings. Larger PV systems require a 

significant financial commitment and financing therefore becomes a critical element in the 

transaction. 

In simple terms, school districts can use two primary types of ownership models to obtain solar 

installations and cost savings across a school district. The PV installations can be financed and 

owned directly by the districts themselves. Alternatively, there are financing structures whereby 

another entity, such as a solar developer or its investors, actually own and operate the PV 

systems on behalf of the school district. This is commonly referred to as the “third-party 

ownership model.” Both methods have advantages and disadvantages that should be weighed 

carefully.

1.1 Direct Ownership

If a district owns its PV systems, then it receives all of the electricity savings and any available 

rebates, and retains the associated renewable energy certificates (RECs) that allow a district to 

make environmental claims about its PV systems. Thus, savings to the general fund that result 

from reduced or eliminated utility bills can be used to repay the loan or bond that was used to 

purchase a PV system. The district can also publicly claim to be reducing its GHG and toxic air 

contaminant emissions. 

When a school district uses voter-approved general obligation bonds for the purchase of a PV 

system, or when the cost of repaying the debt incurred in purchasing the PV system is less than 

the utility savings, these excess funds can be used for other needed school services. Also, to 

compensate for the inability to directly benefit from federal tax incentives, the California Solar 

Initiative (CSI) incentives are greater for governmental and nonprofit organizations than for 

commercial entities. [1] The CSI incentives, when available, provide another revenue stream for 

a school district. Finally, given the productive life of a PV system (25–40 years), it is likely that 

any debt incurred to finance the PV will be paid off well before the end of the useful life of the 

system.

A primary disadvantage of direct ownership is the capital commitment involved. School districts 

rarely have cash reserves and might not have voter-approved bonding authority or access to the 

financial mechanisms needed to purchase PV systems. The district also simply might be 

unwilling to incur any new debt. Additionally, with a direct purchase, the school district is

responsible for operations and maintenance (O&M) for the systems, unless it signs a long-term 

maintenance agreement with the solar developer—an option that is becoming increasingly 
2 

common. Lastly, the federal tax credits available to tax-paying entities are not available for 

public entities directly purchasing a PV system.

1.2 Third-Party Ownership

The advantages of third-party financed PV installations for school districts include: little to no 

capital investment is required on the part of the school district; districts are not responsible for 

O&M; private-sector tax incentives can be incorporated into the transaction, which should result 

in reduced cost of the electricity sold to the district; and the districts can purchase the system for 

“fair market value” (FMV) during or at the end of the contracted term. 

The disadvantages of the various third-party finance models, and of the third-party power 

purchase agreement (PPA) model in particular, include the following: 

• A PPA is a complicated transaction that requires the school district to invest time and 

money in assuring that it negotiates a fair and equitable contract. Utility bill savings 

will be less than if the districts directly owned the system, because 100% of the solar 

electricity generated by the PV system must be purchased by the schools from the 

third-party investor. 

• A PPA generally allocates the RECs to the investor, in which case the district is not 

entitled to claim the environmental benefits associated with clean electricity 

production. 

• If, in the future, the district decides to purchase the PV system from the investor, 

there is no way to determine the purchase price in advance because the system must 

be sold for its fair market value at the time of sale. 

• Unless the district exercises its buyout option to purchase the system at the end of the 

PPA term, the school will not own the PV system. In such cases, the PPA should 

include a provision for the removal of the system at the investor’s expense. 

Regardless of how a school district decides to finance or acquire PV installations on its 

buildings, several key issues should be highlighted, including benchmarking of district energy 

use, energy efficiency, PV siting considerations (including roof condition), the potential for 

school closings during project installation, and the integration of the PV system into the 

classroom environment. 

1.3 Energy Efficiency and Benchmarking

Energy efficiency improvements if not already undertaken should be incorporated in the 

planning stages prior to installing a PV system. Energy conservation measures (ECMs) are the 

most cost-effective way to save energy and realize utility-bill savings. The return on investment

in PV can be enhanced when the building hosting the system is already energy efficient. 

Furthermore, to qualify for rebates under the California Solar Initiative, an energy audit of 

existing buildings is required. For new schools, the project is required to meet either of the 

following two tiers of energy efficiency. 

• Tier I—15% reduction in the commercial building’s combined space heating, space 

cooling, lighting, and water-heating energy compared to the 2008 Title 24 Standards. 
3 

• Tier II—30% reduction in the commercial building’s combined space heating, space 

cooling, lighting, and water-heating energy compared to the 2008 Title 24 Standards. 

Achieving the Tier I level is the minimum condition required to qualify for the rebate. Tier II is 

the preferred level that builders are encouraged to meet. For either Tier I or II, any equipment or 

appliance provided by the builder must be ENERGY STAR-labeled if this designation is 

applicable. [2] Schools can implement energy efficiency measures either prior to the PV 

installations or in combination with them. An energy savings performance contract (ESPC) is a

mechanism to finance the energy efficiency upgrades and possibly the PV installations as well. 

These contracts are discussed elsewhere in this document.

To identify schools that are most in need of energy efficiency upgrades, the schools’ energy use 

should be benchmarked. A simple way to do this is to compare the energy intensity—the energy 

use per square foot, determined by dividing total annual energy use by total facility square 

footage—for all schools. Those with the greatest energy intensity should be a priority for energy 

audits and ECM identification. The U.S. Environmental Protection Agency (EPA) offers a free 

benchmarking tool called Portfolio Manager, which can help identify the energy performance of 

a district’s schools. High-performing schools are eligible for an ENERGY STAR certification.1

In some cases, the local utility can assist with energy audits and might provide rebates for many 

of the audit’s recommended upgrades. 

1.4 Solar Photovoltaics

Photovoltaic arrays convert sunlight to electricity without moving parts and without producing 

fuel wastes, air pollution, or GHGs. They require very little maintenance and make no noise. 

Arrays can be mounted on all types of buildings and structures, as well as in parking lots or other 

open spaces. A PV system’s direct current (DC) output can be conditioned into grid-quality 

alternating current (AC) electricity, or DC can be used to charge storage batteries. Most systems 

installed on schools do not generally have batteries because they are cost-prohibitive. 

Traditional solar cells are made from silicon and are usually flat-plate. Second-generation solar 

cells are called thin-film solar cells because they are made from amorphous silicon or non-silicon 

materials such as cadmium telluride. Thin-film solar cells use layers of semiconductor materials 

only a few micrometers thick. Because of their flexibility, thin-film solar cells can double as 

rooftop shingles and tiles, building facades, or the glazing for skylights. 

The cost of PV-generated electricity has dropped nearly twentyfold in the last 40 years. Gridconnected PV systems currently sell for about $5 to $8 per watt-peak (Wp) ($0.20 to $0.30 per 

kilowatt-hour), including support structures and power conditioning equipment. An NREL study 

of 7,074 PV systems installed in 2007 reported a range of total capital cost averaging from $8.32 

per watt (W) for small systems (less than 10 kW) and $6.87 per watt for large systems (greater 

than 100 kW). In April 2011, West Contra Costa Unified School District received bids for an 

approximately 310-kW ground-mounted system that cost about $6.39 per watt (DC) including a 

10-year performance guarantee and a 10-year O&M contract. Operations and maintenance costs 

are reported at $0.008 per kilowatt-hour produced, or at 0.17% of capital cost without tracking 

 

1 Portfolio Manager is available at 

http://www.energystar.gov/index.cfm?c=evaluate_performance.bus_portfoliomanager. Accessed June 8, 2011.
4 

and 0.35% with tracking. [3] Traditional silicon PV panels are very reliable and last 25 years or 

longer; most panels come with 20- to 25-year warranties. [4]

1.4.1 Siting Photovoltaics

The major challenge of siting solar PV technologies is determining the appropriate siting for 

maximum electricity production. An ideal solar installation is situated in an unshaded, southfacing location with an optimum tilt angle and supplies electricity to a site where there is 

adequate demand for the electricity produced.2

Not all sites are suitable for solar technologies. There are a few important rules of thumb that 

might be helpful in determining whether solar technologies are appropriate for a site.

• It is important to identify an area that is unshaded, particularly during the peak 

daylight hours of 10 a.m. to 2 p.m. Shade not only reduces the output of the solar 

panel being shaded, but it also can reduce the output of adjacent panels, even if they 

are still in the sun. Shade can be caused by trees, nearby buildings, and roof 

equipment or features (such as chimneys). 

• It generally is best to orient fixed-mount panels due south in the Northern 

Hemisphere. Siting panels so that they face east or west of due south decreases 

electrical output; that effect varies by location, however, and at some locations the 

loss of efficiency could be minimal. 

• The optimal tilt angle for achieving the best performance from a fixed-mount PV 

panel is a tilt angle equal to the latitude of a location, for locations in latitudes less 

than 20 degrees. At higher latitudes the correlation is not valid. Christensen and 

Barker analyzed the annual solar resource data for different latitudes. [5] To 

maximize the annual energy production at a location of 40° north latitude, the optimal 

tilt varies from 30° to 35°. 

• Fixed-mount solar panels can be flush- or tilt-mounted on roofs, be pole-mounted on 

the ground (e.g., a carport structure), or be integrated into building materials such as 

roofs, windows, and awnings. A tilt angle equal to latitude is not always feasible, 

however, perhaps because of roof pitch or wind or snow loading considerations. It is 

possible to install panels at a different angle. The effect of tilt angle varies by location 

and in some locations could be minimal. 

• The size and nature of a school’s electric load must be well understood to properly 

select and size a PV system. Photovoltaic systems can be designed to power any 

electrical load regardless of size or location, as long as sunlight and space for the 

panels are available. Likewise, the systems can be designed to power any percent of 

an electric load, from a very small percentage to more than 100% of the load, 

depending on the area available for the panels and the availability of the sun. When 

considering a system that will be tied to the utility grid (grid-connected), it is essential 

 

2 Efforts are underway in the California state legislature and CPUC to allow PV systems to be built on sites that have 

minimal loads and to allow the value of the electricity produced to be taken as a bill credit at another less solarfriendly site. 
5 

to understand the applicable net metering rules and interconnection standards for the 

local electric utility company.

• For electric customers that generate their own electricity, net metering—when 

allowed by the serving utility—enables the customer to earn a bill credit if and when 

the on-site solar PV system generates more electricity than is used on site. This 

typically is accomplished by use of a single, bidirectional meter. When a customer’s 

generation exceeds its use, electricity from the customer flows back to the grid, 

offsetting electricity consumed by the customer at a different time during the same 

billing cycle. In effect, the customer uses excess generation to offset electricity that 

the customer would otherwise have to purchase at the utility’s full retail rate. Net 

metering is required by law in most states, but these policies vary widely. [6]

• Interconnection standards specify the technical and procedural process by which a 

customer connects a PV system that generates electricity to the grid. Such standards 

include the technical and contractual arrangements by which system owners and 

utilities must abide. State public utilities commissions typically establish standards 

for interconnection to the distribution grid, but the Federal Energy Regulatory 

Commission (FERC) has adopted standards for interconnection at the transmission 

level. Many states have adopted interconnection standards, but some states’ standards 

apply only to investor-owned utilities (IOUs)—not to municipal utilities or electric 

cooperatives. Several states have adopted interconnection “guidelines,” which are 

weaker than standards and generally apply only to net-metered systems. [6] 

• Photovoltaic modules have different efficiencies (i.e., higher efficiency panels 

produce more electricity per unit area than lower efficiency panels), therefore it is 

important to consider the efficiency versus the available or required area of the PV 

system. Fewer modules made of a higher-efficiency cell (such as single-crystalline) 

are needed for approximately the same power output as produced by more modules 

that are made of a lower-efficiency cell (such as thin film). Therefore, if a project 

location is space-constrained, then a module that is more efficient—and potentially 

costs more—might make the most sense. If a project has an abundance of space, 

however, then a less-efficient, less-costly module could be the most cost effective. 

1.4.2 Roof Condition

Photovoltaic systems should only be installed on roofs that are in good shape and which can 

reasonably be expected to remain in good condition for the entire expected lifetime of the PV 

system (at least 25 years). Roofs should therefore be relatively new or be upgraded prior to the 

PV installation. It generally is not cost effective to remove a previously installed PV system to 

replace or upgrade a roof, although certain rooftop-PV mounting systems now make it possible 

to upgrade a roof without removing the PV structure. Ideally, roofs that need repair or are slated 

for a replacement can be improved or replaced in conjunction with the installation of the PV 

system. Structural assessments might also be required to confirm that the roof can support the 

additional weight and wind loading. If the best sites for solar are those that need new or 

improved roofs, then this near-term capital expense must be budgeted for accordingly. Buildingintegrated PV systems that combine the roofing material with the PV installation (thin-film 

applications) could also be an option. 
6 

1.4.3 School Closings

With an expected life of 25 years or more, once installed, a PV system will generate electricity to 

offset the building’s load for a long time. To the degree possible, it is best to identify sites that are 

expected to remain in service for the foreseeable future. Given the current economic climate and 

the stress on school budgets, school closings are unavoidable. Although a PV system can be removed from a roof and reinstalled elsewhere in the district, this can be a costly process that also 

results in lost electricity production during system downtime. State regulations are evolving on 

the issue of whether the electricity generated by a PV system has to be consumed on site. It might

be possible in the future to continue generating electricity from a school that has been closed and 

to apply the value of the generated electricity to another electricity account in the district.

1.4.4 Classroom Impact

Utility-bill savings are becoming the primary motivation for school districts to install PV 

systems. The impact of an on-site solar installation, however, goes beyond the value of the 

electricity produced and the greenhouse gases avoided. Photovoltaic installations sited 

throughout a school district create an excellent platform to introduce energy issues to students, 

teachers, and the school community, and provide hands-on experience for an issue that is 

traditionally given little attention in standard K–12 curriculums. Therefore, incorporating the PV 

systems into all school curricula should be a key element in any district-wide solar program. To 

maximize the classroom impact, the following are key activities: 

• Curriculum development

• Data acquisition/monitoring system with Web access

• Training for facility staff

• Training for teachers

• Kiosks or other appropriate signage 

On large system purchases, some of these activities could be provided by the PV provider as part 

of the negotiated contract. With these general concepts in mind, the remainder of this 

introductory report focuses on the financial alternatives available to school districts as they 

implement their Solar Master Plans.

2 Direct Ownership of Photovoltaic Systems

In fiscal year (FY) 2009–2010, local governments and school districts were often the 

beneficiaries of low-interest or 0% interest bonds backed by the federal government. In some 

cases the bonds have been used to purchase PV systems. Prior to 2009, school districts had to 

think creatively if they wanted their schools to become energy generators. Some California 

school districts chose to enter into power purchase agreements. Other districts used voterapproved bonds, school modernization grants from the state, and up-front rebate payouts to help 

underwrite the cost of their PV systems.

It doesn’t seem likely that the federal government will reauthorize the bond programs that helped 

to build so many solar projects. Additionally, rebates in California are evaporating and might not 

be replenished. On the plus side, solar-panel costs have been dropping, their efficiency levels 
7 

have been increasing, and the slowed economy has made the cost for construction projects much 

more competitive and favorable for solar projects. An emerging market for a Tradable 

Renewable Energy Credit (TREC) in California could provide some additional financial 

incentives lost when the CSI rebates end. The California Energy Commission (CEC) has the 

authority to allow school districts to participate in the TREC market but, as of May 2011, the 

question of whether the CEC will use this authority remains unanswered.

One way to avoid the “boom-and-bust” cycle associated with PV financing for school districts is 

to incorporate the cost of solar installations into the next request that a district makes to its 

residents for general obligation bonds that support school construction projects. General 

obligation, tax-exempt, municipal bonds are common financing tools for schools. Photovoltaic 

projects can be bundled with other investments into a much larger bond transaction. The bond 

cycle is relatively infrequent for school districts (every 5 to 10 years), so planning is critical if 

these bonds are going to be used for PV installations. [7] The pursuit of Solar Master Plans is a 

key element in this planning process. Specific sites can be identified, their solar resources can be 

characterized, and an estimate of costs can be determined to create a priority list of installations.

By creating this list of qualified projects a district will be ready to include them in the next 

funding cycle, instead of inserting vague language stating that some of the proceeds will be used 

for renewable energy projects and taking the risk of losing them to other investment priorities. 

A school district can directly purchase, own, and operate PV systems using a variety of financing 

mechanisms. These include using existing reserves available from the General Fund, traditional 

tax-exempt bond financing, proceeds from state transfers of funds (e.g., state school construction 

and modernization funds) and other forms of grants (e.g., from foundations and private 

businesses), and a variety of tax credit bonds. With the exception of tax credit bonds, the other 

mechanisms are relatively common ways that school districts traditionally finance their capital 

investments and are not discussed in detail. Utility rebates, if available, also can be used to 

supplement the financing of the PV system. 

As noted, CSI incentives are greater for school districts under the direct-ownership scenario. 

Check the CSI Statewide Trigger Point Tracker regularly for the status of rebates from 

California’s major investor-owned utilities. [1] As of May 4th, 2011, CSI incentives were 

suspended in Pacific Gas and Electric Company (PG&E) and San Diego Gas and Electric 

(SDG&E) territory for all sectors except residential installations. [1] Legislation (S.B. 585 

Kehoe) is attempting to replenish the CSI so that it can fulfill its original legislative mandate. 

Check the Database of State Incentives for Renewables and Efficiency (DSIRE) for all state and 

federal incentives, including rebates from publicly owned utilities.3 Municipal utilities or 

publicly-owned utilities (POUs) also offer solar rebates; however, the cost of the electricity 

delivered by a municipal utility is sometimes too low to make districts served by POUs attractive 

candidates for PPAs. If a school district decides to finance and own a solar energy system, it can 

certainly finance it with voter-approved general obligation bond proceeds and other forms of 

traditional tax-exempt financing, or it could possibly use cash on hand if available.

 

3 See http://www.dsireusa.org/. Accessed June 8, 2011.
8 

2.1 Using Cash on Hand

Although it is unlikely in the current economic environment that a school district has available 

general-fund resources on hand to directly purchase a PV system without financing, it is not out 

of the question. A district could be the recipient of grant funding or, as a result of a sale of 

unused property, could have the resources to purchase and install a PV system. If this is the case, 

then the school district would install the system and immediately begin accruing utility bill 

savings. The CSI production incentives, if available when the project is initiated, would enhance 

this positive cash flow in the first 5 years. Simple calculators can be developed to illustrate these 

savings to a school district. 

2.2 California Energy Commission Loans for Energy Efficiency and Renewable

Energy

Using funds from a variety of sources, including federal stimulus dollars, the CEC has a lowinterest loan program available for public entities, including schools. [8] The list of eligible 

projects includes renewable energy in addition to a host of energy efficiency measures. The 

interest rate of the loans is 3% per annum and the maximum term cannot exceed 15 years or the 

expected life of the equipment (whichever is less). For PV systems, 15 years is less than the 

expected system life, thus 15 years would be the maximum term. The loan is repaid using the 

energy savings. Loans are given on a first-come, first-served basis and are based on available 

funding. For more information, consult the CEC website at 

http://www.energy.ca.gov/efficiency/financing/index.html. 

2.3 Other Tax-Exempt Financing

2.3.1 Tax-Exempt Municipal Leasing

Leasing equipment instead of purchasing it is a common way for schools to finance certain hard 

assets (e.g., vehicles, software, computers, office equipment). Leasing is used much less 

frequently, however, for solar installations. This is a function of the inability of the owner of the 

PV system (the “lessor”) to receive the federal tax incentives, given that the school, as the user of 

the equipment (the “lessee”), is not subject to U.S. income taxes. Investment tax credits are so 

valuable that alternatives to a tax-exempt lease often are more attractive. For some school 

districts, however, the low cost and familiarity of a tax-exempt lease combined with greater 

incentives of the state rebate program and the ability to execute a lease without voter approval 

could outweigh the loss of the tax credits in the transaction. Information on Yolo County, 

California, which used a tax-exempt lease as part of the capital structure to finance 1 MW of PV 

energy, can be found at http://www.nrel.gov/docs/fy11osti/49450.pdf.

In early 2010, another option for leasing was created under the U.S. Treasury’s 30% Cash Grant 

in Lieu of the Investment Tax Credit program (the “1603 Program”). [9] A third party who elects 

to receive the cash grant to finance a PV system instead of taking the 30% Investment Tax Credit 

(ITC) can lease this system to a school despite its tax-exempt status. [10] Although certain 

caveats are associated with this structure—such as the inability to benefit from accelerated 

depreciation—it does create an additional option for schools to consider. [10] The U.S. Treasury 

cash grant program was set to expire at the end of 2010 but has been extended by one year. 

Although the authors are unaware of any use of this mechanism to lease PV systems to schools, 

it does remain an alternative for school districts to consider through the end of 2011. 
9 

2.3.2 Office of Public School Construction Funds

A potential source of funds for solar projects could be the State of California’s Office of Public 

School Construction (OPSC) and the High Performance Incentive (HPI) Program. The OPSC 

implements and administers the School Facility Program (SFP), which includes the New 

Construction Grants and Modernization Grants, and other programs of the State Allocation 

Board (SAB). The HPI Program was established to distribute funds set aside for high energy 

performing schools to promote the use of high-performance attributes in new construction and 

modernization projects for K–12 schools. The HPI awards credits through a scorecard tied to the 

2006 Collaborative for High Performance Schools (CHPS) guidelines, which determine the HPI 

points and the HPI amount that the school can receive. 

2.3.2.1 New Construction Grant

The New Construction Grant offered by OPSC provides state funds on a 50/50 state-local 

sharing basis for public schools’ capital facility projects in accordance with the statute. 

Eligibility for state funding is based on a district’s need to house pupils and is determined by 

criteria set in law. This new construction grant amount is intended to provide the state’s share for 

all necessary project costs except those for site acquisition, utilities, and off-site, service-site, and 

general-site development that might qualify for additional project funding. The necessary project 

costs include, but are not limited to, funding for design and the construction of the building, 

educational technology, tests, inspections, and furniture/equipment. 

2.3.2.2 Modernization Grant

The modernization grant made by OPSC provides state funds on a 60/40 basis for improvements 

to educationally enhance school facilities. Projects eligible under this program include upgrades 

to air conditioning systems, plumbing, lighting, roof replacement, PV systems, and electrical 

systems. Site acquisition cannot be included in modernization applications. The modernization 

grant amount is intended to provide the state’s share for all necessary project costs. The 

necessary project costs include, but are not limited to, funding for design and the modernization 

of the building, educational technology, tests, inspections, and furniture/equipment. School 

districts typically use local bond financing or secure alternative funding to meet the 50% funding 

requirement for new construction projects or the 40% funding requirement for modernization 

projects. The application filing timelines are presented in Table 1. 
10 

Table 1. Application Filing Timelines

Programa / Type of Application Application Acceptance Date Application Due Date

New Construction

Design b Ongoing Prior to occupancy of any of the classrooms

Separate Site a,c Ongoing Prior to occupancy of any of the classrooms

Construction (Full Adjusted Grant) Ongoing Prior to occupancy of any of the classrooms

Modernization

Design a,c Ongoing Nonec

Construction (Full Adjusted Grant) Ongoing Nonea,c

a. For application submission requirements, see the OPSC website, http://www.dgs.ca.gov/Default.aspx?alias=www.dgs.ca.gov/opsc, and the SFP 

Regulations, http://www.bondaccountability.opsc.dgs.ca.gov/bondac/oversight_K12.asp. 

b. Application only can be submitted if the district qualifies for financial hardship assistance.

c. Applications accepted for reimbursement for any contracts signed after August 27, 1998.

Table 2 presents the status of the funds. Proposition 1D, Proposition 47, and Proposition 55 have 

an available combined balance for new construction and modernization of $3 billion as of May 

25, 2011. Most of this amount, however, appears dedicated to activities other than energy 

investments. The School Facility Program requirements for the New Construction Grant and 

Modernization Grant can be found at 

www.documents.dgs.ca.gov/opsc/Resources/SFP_NC_Rqmnts.pdf and 

www.documents.dgs.ca.gov/opsc/Resources/SFP_Mod_Rqmnts.pdf. 
11 

Table 2. Status of Funds

Source: http://www.documents.dgs.ca.gov/opsc/Resources/Funds_Status.pdf
12 

2.3.2.3 High Performance Incentive Program

In 2006, the HPI program was established to distribute the $100 million set aside for highperformance schools from Proposition 1D to promote the use of high-performance attributes in 

new construction and modernization projects for K–12 schools. On the Status of Funds (dated

January 26, 2011), the High Performance Schools Program had an available balance of $80.5 

million. [11] The School Facility Program regulations were based on 2006 California 

Collaborative for High Performance Schools (CA-CHPS) and referenced the 2005 Title 24 

standards. According to the Division of the State Architect (DSA) website, the 2009 CA-CHPS 

Criteria now are accepted for the DSA/HPI grant review.4 The HPI points are calculated from a 

project scorecard. The HPI project scorecard was based on the 2006 CHPS guidelines, which 

remain unchanged. The HPI amount is based on the points attained by the district within the 

following five categories: Site, Water, Energy, Materials, and Indoor Environmental Quality. 

The DSA’s High Performance Section (HPS) verifies the HPI rating criteria to determine the 

number of points the project receives. A checklist for HPI projects and the DSA/HPI 

scorecards/guidelines can be found on these websites, respectively: 

www.documents.dgs.ca.gov/dsa/other/HPI_Checklist_rev02-07-10.pdf and 

www.dgs.ca.gov/dgs/tabid/1378/Default.aspx#t4 . 

Table 3. High Performance Incentive Points Summary [12]

Modernizations and Additions

Minimum to Qualify 20

Maximum 77

New Construction (New Campus Only)

Minimum to Qualify 27

Maximum 75

2.4 Qualified Tax Credit Bonds

A number of qualified tax credit bonds (QTCB) have proven to be suitable vehicles for financing 

solar installations on schools, including Clean Renewable Energy Bonds (CREB), Qualified 

Energy Conservation Bonds (QECB), Qualified School Construction Bonds (QSCB), and 

Qualified Zone Academy Bonds (QZABs). Unfortunately, QTCBs are no longer available but 

are included here for informational purposes. Some school districts may still have access to prior 

years’ allocations, and it is possible that some form of QTCB could be made available in the 

future. 

By providing allocations of federal tax credits for certain categories of projects, the cost of 

capital is reduced and, ideally, more of these projects are built. The CREBs and QECBs are tax

credit bonds aimed at renewable energy and energy efficiency investments. The QSCBs and 

QZABs are directed at schools and are defined broadly enough to also include renewable energy 

and energy efficiency. 

2.4.1 Build America Bonds

Although not technically a QTCB, Build America Bonds (BABs) have a tax credit feature 

similar to that of the QTCBs. Their success, however, has been a result of what is known as the 

 

4 See www.dsa.dgs.ca.gov (accessed June 9, 2011). 
13 

“direct payment” option. Instead of BAB buyers receiving federal tax credits in lieu of interest 

payments, the issuer can elect to receive a subsidy from the U.S. Treasury. This subsidy is 

equivalent to 35% of the bond’s interest rate. Therefore, it is possible for state and local 

governments, including school districts, to issue taxable bonds that actually are cheaper than taxexempt bonds once the subsidy is included. As a result, BABs have been very successful since 

the program’s creation in 2009. To date, more than $120 billion in BABs have been issued. [13] 

According to the Bond Buyer, although initial BAB transactions were large (for example, the 

first was a $250-million bond issued by the University of Virginia), the average size of a BAB

issuance is decreasing; bonds in the $1-million to $5-million range now are more common. A 

bond of this amount could be issued as a dedicated solar bond for an individual school district. 

Note that, as of March 2011, there was no reauthorization of funding for BABs. Funding could 

possibly occur in late 2011. 

2.4.2 Hiring Incentives to Restore Employment Act of 2010 and the

Impacts on Qualified Tax Credit Bonds

The Hiring Incentives to Restore Employment (HIRE) Act of March 2010 made a very 

significant modification to the CREB, QECB, QSCB, and QZAB tax credit bond programs, 

creating a direct-pay subsidy mechanism similar to the BAB program (but much more generous). 

Under the new HIRE Act provisions, the subsidy that the issuer of a direct-pay bond receives is

the lesser of either the actual interest rate of the bond or the reference credit rate found on the 

Treasury Direct website.5

 As an example, on December 14th, 2010, the reference credit rate on 

the Treasury Direct website was 5.63% (annual rate) for a qualified tax credit bond with a 

maximum maturity of 18 years. The QSCB and QZAB issuers get a direct-pay subsidy equal to 

100% of the applicable tax credit rate of 5.63%. The CREBs and QECBs receive 70% of the 

applicable rate, which is 3.94%. Therefore: 

• If a QSCB or QZAB was issued on December 14th, 2010, then the interest rate 

subsidy the issuer receives is the lesser of the actual interest rate of the bond or 

5.63%. In other words, any bond with an interest rate of 5.63% or less is, in effect, an 

interest-free bond because the government subsidy offsets the entire interest payment.

If the interest rate is more than 5.63%, then the net interest cost to the issuer is the 

difference between the actual rate and 5.63%.

• If a CREB or QECB was issued on December 14th, 2010, then the interest rate 

subsidy the issuer receives is the lesser of the actual interest rate of the bond or 

3.94%. In other words, any bond with an interest rate of 3.94% or less is, in effect, an 

interest-free bond because the government subsidy offsets the entire interest payment.

If the interest rate is more than 3.94%, then the net interest cost to the issuer is the 

difference between the actual rate and 3.94%.

For school districts with access to allocations of different types of tax credit bonds, issuing 

QSCBs or QZABs is more likely to result in interest-free financing, given the greater subsidy 

available for these bonds versus CREBs and QECBs.

 

5 See “Qualified Tax Credit Bond Rates.” TreasuryDirect. https://www.treasurydirect.gov/GASL/SLGS/selectQTCDate.htm. Accessed June 9, 2011.
14 

2.4.3 Clean Renewable Energy Bonds

Initially authorized under the Energy Policy Act (EPAct) of 2005, Clean Renewable Energy 

Bonds (CREBs) [14] are an attempt to level the playing field for public entities unable to benefit 

from the tax incentives available to private entities. These bonds must be used for qualified 

renewable energy projects, which include PV. In 2009, the State of California received $640 

million—80% of the total amount allocated for local governments in the United States. Most of 

the California allocations are for solar projects. Many California school districts received CREB 

allocations, including the Oakland Unified School District, which received 17 separate 

allocations for a total of $39 million. Berkeley and West Contra Costa school districts do not 

appear on the IRS list as having received any CREB allocations.

Clean Renewable Energy Bonds can also be combined with other tax credit bonds or with more 

traditional tax-exempt financing. In early 2010, for example, Yolo County, California, combined 

CREBs, QECBs, a California Energy Commission Loan, and a tax-exempt municipal lease to 

finance a 1-MW solar installation on the Yolo County Justice Center. [15] Additionally, the 

project is receiving a CSI incentive of $0.24/kWh for 5 years. Bank of America Corporation 

structured this transaction. This project is noteworthy in that it is one of the first QECB issuances 

in the country and was the first to combine QECBs with CREBs. [15] A total of $7.265 million 

was raised across the four financial products. This transaction was completed prior to the HIRE 

Act coming into effect; therefore, the CREBs and QECBs are using the tax credit feature in 

which the buyer receives a federal tax credit in addition to a 3.90% supplemental interest 

payment from Yolo County. More information on this transaction can be found at

http://www.nrel.gov/docs/fy11osti/49450.pdf. Note that, as of March 2011, there was no 

reauthorization of funding for CREBs.

2.4.4 Qualified Energy Conservation Bonds

A Qualified Energy Conservation Bond (QECB) is very similar to a CREB. Unlike CREBs, 

however, up to 30% of QECBs can be used to finance private-sector activity. Also, there are 

numerous additional renewable energy and energy conservation projects that can be financed 

with QECBs, one of which is capital expenditures for reducing energy consumption in publicly 

owned buildings by at least 20%. [16] This is relevant for those cases in which a school district 

plans to finance energy efficiency upgrades in addition to installing PV systems. 

Unlike CREBs, which required submitting an application to the IRS to solicit a tax credit 

allocation, the QECB tax credits were allocated to states based on population. This state-by-state 

allocation occurred in 2009. California received an allocation of approximately $381 million. 

[16] Cities and counties in California that have populations greater than 100,000 automatically 

received sub-allocations of this amount, with $170 million going to cities, $198 million to 

counties, and the remaining $13 million to state and tribal governments. [17] According to the 

California Debt Limit Allocation Committee (CDLAC), the cities of Oakland, Berkeley, and 

Richmond received QECB allocations of approximately $4 million, $1 million, and $1 million, 

respectively. [18] Note that, as of March 2011, there was no reauthorization of funding for 

QECBs.

2.4.5 Qualified School Construction Bonds

Qualified School Construction Bonds (QSCBs) were created in 2009 under the American 

Recovery and Reinvestment Act (ARRA). [19] As is the case for the other bonds discussed in 
15 

this section, QSCBs originally were designed as tax credit bonds. The proceeds from a QSCB 

can be used for school construction, rehabilitation, and repair, as well as land acquisition to site a 

school. Energy efficiency and renewable energy projects are permissible uses of bond proceeds 

under this definition. The first QSCB issued in the United States was from the San Diego Unified 

School District in 2009 (for $39 million) in combination with Capital Appreciation Bonds.6

Since then, a number of California school districts have issued QSCBs, including West Contra 

Costa County Unified School District, which issued a $25-million bond on June 10, 2010. [20] 

As noted, with the passage of the 2010 HIRE Act, QSCBs can now be issued as taxable bonds 

with the issuer receiving a subsidy from the U.S. Treasury. As a result of this change, QSCB 

issuances have increased tremendously. In the first half of 2010, 167 QSCBs were issued for 

more than $2.5 billion. [21] This compares to three bonds for a total of $106 million in the first 

half of 2009 and a total of $2.8 billion for 2009. 

In 2010, California received a QSCB allocation of $720 million and Oakland Unified School 

District received its own allocation of $24 million. [22] The application for local school districts 

to tap into this 2010 QSCB allocation was posted on the California Department of Education 

(CDoE) on October 1, 2010. The CDoE has reported that the program is oversubscribed; it now 

prioritizes the awards based on criteria established in the enabling legislation. Existing voterapproved bond authority is required to be eligible. Additionally, large school districts—such as 

Oakland Unified, which received a direct allocation from the IRS—are not eligible to apply. For 

more information, consult the California Department of Education website at 

http://www.cde.ca.gov/ls/fa/qs/2010qscboverview.asp. 

In July 2010, a $12-million, 10-year QSCB bond with an interest rate of approximately 5% was 

issued by the California School Finance Authority on behalf of a San Diego, California, charter 

school, High Tech High. [23] The direct-pay federal subsidy is greater than 5%; therefore, the 

entire interest rate is offset, thus creating a true interest-free bond for the school. Note that, as of 

March 2011, there was no reauthorization of funding for QSCBs. 

2.4.6 Qualified Zone Academy Bonds

Although similar to QSCBs in structure, Qualified Zone Academy Bonds predate the other tax

credit bond programs and were created in 1997.7 The QZABs are directed at schools serving 

significant numbers of low-income families. Qualified Zone Academy Bonds provide a source of 

funding that can be used for renovating school buildings, purchasing equipment, developing 

curricula, and training school personnel, but not for new construction.8

 There is an additional 

requirement of partnering with the private sector, which includes financial contributions. It is 

conceivable that QZABs could be used much like QSCBs to finance energy efficiency and solar 

projects. The additional requirements for QZABs, however, could make them a less flexible

instrument than a QSCB.

 

6 Goldman Sachs, “Overview of Tax Credit Bonds” (May 2009). http://www.nast.net/2009TreasuryMgmt/Files/ 

WED%20MarvinMarkus.pdf. Accessed January 15, 2011. 7 Taxpayer Relief Act of 1997, section 226(a). Available at http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=105_cong_public_laws&docid=f:publ34.105. Accessed June 9, 2010. 8 U.S. Department of Education. Qualified Zone Academy Bond. 

http://www2.ed.gov/programs/qualifiedzone/index.html. 
16 

In 2010, the California allocation of QZABs was $163 million. [24] Individual school districts 

can apply to the state for an allocation, or districts can jointly apply. [25] Note that, as of March 

2011, there was no reauthorization of funding for QZABs. For more information, see the 

California Department of Education website at http://www.cde.ca.gov/ls/fa/qz/introd.asp. 

3 Third-Party Financing

The use of third-party financing to install large PV systems is common in California, including 

by K–12 public school districts. For example, in August 2010, the San Diego Unified School 

District board approved the use of third-party financing to install 5.2 MW of solar on more than 

80 school district rooftops. [26] This adds to the 4 MW of PV that the district has already 

installed. [26] Third-party financing is particularly useful in helping non-tax-paying entities, 

such as school districts, implement solar projects that cannot otherwise benefit from federal 

incentives. Using solar power purchase agreements (PPAs) and, possibly, energy savings 

performance contracting, districts can host on-site PV systems without any up-front capital 

investment. 

3.1 Power Purchase Agreement

Under the terms of a solar PPA, the solar developer/investor owns, operates, and maintains the 

PV system and sells 100% of the solar electricity produced to the host (school district) at a fixed 

price for a negotiated term of up to 20 years. The federal tax incentives available to businesses—

the business energy investment tax credit (ITC) and accelerated depreciation—can offset 50% or 

more of the installed cost of a PV system. [27] The PPA provider can then pass a portion of the 

savings on to the school in the form of a lower PPA cost of electricity. As a result, the third-party 

ownership model can be a cost-effective arrangement for many public entities that are interested 

in pursuing solar but lack access to the necessary funding or prefer to forego ownership for other 

reasons. Additionally, buyout options can be negotiated into the contract for the host to purchase 

the system sometime after 6 years and up through the end of the PPA term at the PV system’s 

fair market value.
17 

Figure 1. PPA flowchart (NREL 2010)

3.1.1 Advantages of the Third-Party Power Purchase Agreement Model for Solar

There are both advantages and disadvantages associated with third-party ownership models and 

solar PPAs. [28] Some of the commonly recognized benefits include the following: 

• Ability to benefit from the federal Business Investment Tax Credit. As noted, 

commercial entities can benefit from the 30% ITC. By lowering the cost of the 

project to the solar developer and its investors, a lower PPA price can be offered to 

the public-sector host of the PV system. 

• Ability to benefit from modified accelerated cost recovery system (MACRS).

Photovoltaic installations can be depreciated over a 5-year period rather than over the 

expected useful life, which is much longer. Depreciation is treated as an expense for 

accounting purposes and reduces the income that is subject to taxes. As it relates to 

PV projects, the impact of depreciation usually is greater losses for the investors, 

which then are used to offset other taxable gains. Like the ITC, the host benefits from 

accelerated depreciation in that it could allow for a lower price per kilowatt-hour of 

electricity in the PPA.

• No up-front capital investments. Although installed costs are declining, the required 

initial investment to install a PV system is still significant, even after rebates. The 

cost of a 100-kW PV system on a middle school, for example, can exceed $500,000. 

Using the third-party PPA model, it is the solar developer and investors that finance 

and own the system, thus eliminating the need for the host to invest its own capital 

into the project.

• Stable and predictable electricity prices for 20 years. Power purchase agreements 

are commonly structured with an initial price per kilowatt-hour of electricity in the 
18 

first year, combined with an annual rate of escalation in the range of 2% to 5%. 

Alternatively, the price per kilowatt-hour can be fixed for the entire term of the PPA. 

Regardless, the host locks in the cost per kilowatt-hour of solar-generated electricity 

for the length of the contract. In today’s economic environment, the initial PPA price 

must likely be competitive with the utility rates that a school is currently paying. 

• Operation and maintenance responsibility is handled by the system owner. The 

system owner operates and maintains the PV system, removing this burden from the 

host. This includes replacing the system’s inverters should they fail after the standard 

10-year warranty but prior to the end of the PPA term.

• Buyout option provides ownership potential. Often PPAs can be structured so that 

the host has the option to buy the system from the developer at various points during 

the life of the PPA. The first option to buy the system takes place sometime after year 

6, because ownership of the PV system cannot change before then without significant 

tax penalties. After that, the options could be every year, every 5 years, or whatever 

period is negotiated by the parties. If the buyout option is exercised, then the price 

should be discounted to reflect the tax benefits that the developer has received during 

the first 5 years. It is common in a PPA to calculate the buyout price as the greater of 

either a predetermined termination value or the system’s fair market value.

• Risk avoidance. The risk of electricity production is borne by the PPA provider. The 

host only is obligated to purchase what the system produces. Additionally, the PPA 

provider commonly guarantees a certain level of minimum production of electricity, 

compensating the host for any shortfall. This is especially important if retail 

electricity rates are greater than the PPA rates, as the host would have to purchase 

more expensive power from the utility to make up the shortfall of the PV system.

3.1.2 Disadvantages of Third-Party Ownership

• No free electricity. Although the PPA price will ideally be less than retail utility 

prices, the host does not own the PV system; therefore, it will continue to pay for all 

of the electricity consumed at the facility.9 This stands in stark contrast to owning a 

PV system, which generates “free electricity” (finance costs notwithstanding). In the 

case of a school district, which has access to funds that it doesn’t have to repay 

directly (e.g., taxpayer-financed bonds, transfers from the state), owning a PV system 

reduces utility bills and frees up cash in the general fund to be used for other 

purposes. 

• No ownership of the “clean” energy attributes produced by a PV system.

Whoever owns the system claims its environmental benefits, unless those benefits 

have been sold to another party such as the utility. If a school district has signed a 

PPA, it cannot make explicit environmental claims such as being “solar-powered” 

unless the PPA allows the district to retain the renewable energy certificates.

Allowing the district to retain the RECs, however, often can make a transaction 

unattractive for the solar developer. Therefore, electricity-only PPAs are most 

common. If the solar RECs have not been bundled with the electricity, public claims 

 

9 A district is obligated to purchase all the electricity produced by the PV system it hosts. If additional electricity is 

required, then it must be purchased from the local utility at the utility’s standard rates.
19 

of being solar-powered must be tempered, given that only the owners of the RECs 

can make such a claim. One solution is to purchase “replacement RECs”—usually 

cheaper wind or biomass RECs—to “green up” the project. 

• Transaction costs are high. Negotiating a PPA is very labor intensive. An RFP is 

developed and issued to select a solar developer. The PPA and the lease agreement 

must then be negotiated with the winning bidder. This negotiation process easily can 

take 6 months or more. To recoup some of these transaction costs, some PPAs include 

a requirement that the solar developer must reimburse the host for expenses incurred. 

These costs, of course, are in turn recouped by the developer in the form of an 

increased PPA price. However, this could be a way to develop internal support for a 

transaction. 

• Project will likely need a large, anchor PV system. The PPA providers will seek

the opportunity to install one or more large PV systems in a school district for the 

transaction to benefit from economies of scale. Placing numerous small PV systems 

on many school buildings is unlikely to be cost effective. Ideally, for example, a high 

school or maintenance facility that can host a system as large as 1 MW to anchor a 

system-wide PPA project could be required. In the absence of a large installation, 

costs will increase. Projects that rely on a number of small systems also risk falling 

apart should the “anchor” drop out. 

• Facility access by third parties is necessary. The developer and its subcontractors 

need access to the site to install the PV system and then to maintain it over time. For 

school districts this often must be coordinated so that students and faculty are not 

disrupted during the installation process. For certain facilities, this might be a 

concern; for others, such as a bus maintenance facility, it could be less so.

In cases where a public entity has signed a PPA, it is because the advantages outweigh the 

disadvantages. Alternatively, the lack of funding makes a third-party financed transaction the 

only realistic solution. If funding is obtained in the future, then ownership can be acquired by 

exercising the buyout option. 

3.1.3 California Case Studies of Third-Party Financing Solar on

K-Through-12 School Districts

In addition to the information contained in the following case studies, this document contains 

copies of the signed PPAs: 

https://www.musd.org/cms/page_view?d=x&piid=&vpid=1217983977356. 

3.1.3.1 San José Unified School District, San José, California10

In 2007, Chevron Energy Solutions entered into a partnership with the San José Unified School 

District (SJUSD) to install solar panels on school buildings. The genesis of the project was the 

initiative of a local high school in the district that was interested in installing PV. It then became 

a district-wide effort. The SJUSD had the following goals for the project: 

 

10 Information for this section was obtained from the Chevron Energy Solutions website, 

http://www.chevronenergy.com/case_studies/sjusd.asp; a SJUSD press release, 

http://www.naesco.org/resources/casestudies/documents/SJUSD-Solar-Press%20Release-final.pdf; and an interview 

with a representative of the school district (January 1, 2010) (on file with author). 
20 

• Deliver general fund savings 

• Create education opportunities 

• Demonstrate environmental stewardship and leadership. 

In partnership with BankAmerica, the institution that financed and owns the PV installations, 

Chevron is installing a total of 5.5 MW of solar at 14 different sites across the district in three 

phases. Four high schools will host a total of 2 MW, and the remaining 10 sites will host 3.5 

MW. Many of the sites are shade structures on parking lots, and the others are rooftop 

installations. BankAmerica is capturing the tax benefits as well as $11 million in incentives from 

the CSI Program. Chevron Energy Solutions is under contract to operate, monitor, and maintain 

the installations during the life of the PPA. 

Solar energy is being incorporated into the district’s science curriculum, and each of the 14 sites 

will have an educational display that includes system monitoring and real-time production 

information. The district expects to reduce energy costs by 30% during the life of the transaction 

(25 years) and save $25 million. Additionally, 100,000 metric tons of carbon dioxide will be 

avoided. Key design elements of the program are listed below: 

• The district signed the PPA with the solar developer and is the party responsible for 

purchasing the solar electricity.

• The district negotiated an easement at each of the schools stipulating the conditions 

for third-party access and operation. 

• From initial discussions to the first installation, the process took 18 months. 

• Significant coordination was necessary with the selected schools during the preconstruction and construction phases because the installations took place during the 

school year. 

• Several neighbors near one of the schools expressed concerns about the aesthetics of 

the solar installations. After viewing a computer-generated rendition, however, the 

neighbors ultimately supported the project.

• Some schools wanted to host PV systems but could not participate because they could 

site only small systems and not the large-scale capacity required for economies of 

scale to make the project “pencil out” for the investor. 

• Initially, there was a great deal of skepticism on the part of the onsite building 

maintenance staff that had to be overcome. Installed systems have been relatively 

hassle free, however, so the project is currently meeting expectations. 

• The maximum amount each system generates as a percentage of the building’s 

electricity load is roughly 30% to 40%. The district has a net-metering agreement 

with the local utility.

• The district might be interested in buying the systems outright before the end of the 

contract, possibly using bond financing. 

• The school district contracted with a third party to conduct independent inspections of 

the systems after they were installed.
21 

3.1.3.2 Milpitas Unified School District, Milpitas, California11

In 2007, Milpitas Unified School District (MUSD) began discussions with Chevron Energy 

Solutions to carry out energy efficiency investments and install PV systems on school buildings. 

The district had the following four key objectives: 

• Demonstrate economic leadership (general fund savings) 

• Demonstrate environmental stewardship

• Create educational opportunities

• Receive positive public recognition and perform community outreach. 

Figure 2. Solar PV array hosted by Milpitas Unified School District. Photo by John Cimino

The project consists of 3.4 MW of PV installations at 14 of the district’s sites. These systems 

will meet 75% of the school district’s annual electricity needs and 100% of its peak electricity 

needs during the summer. The installations are designed as both shade and carport parking 

structures. As with San José Unified, each site has an educational display showing system 

performance. Additionally, solar energy is integrated into the fifth-grade and sixth-grade 

curriculum. [29] BankAmerica financed and owns the PV installations and receives the tax 

benefits. The bank also received $4.2 million in CSI incentives. 

The MUSD estimates that the system will save the district $12 million over the life of the project 

by reducing annual energy costs by 22%. The project will also reduce carbon dioxide emissions 

by 23,600 metric tons. The PV systems are assisting the school district in meeting California’s 

Grid Neutral Initiative. [30] A phone interview was conducted with Director of Maintenance 

Operations and Transportation for MUSD, John Cimino, as part of a similar solar for schools 

report and revealed that the PV systems are producing more energy than guaranteed in the 

 

11 Information for this section was obtained from the Chevron Energy Solutions website,

http://www.chevronenergy.com/case_studies/musd.asp. 
22 

contract, resulting in additional savings to the district. According to Mr. Cimino, the project has 

been a win-win for all parties involved, and was a fiscally responsible venture for the district as 

well as an environmental-stewardship measure.

3.1.4 Third-Party Power Purchase Agreements and New Market Tax Credits

The New Market Tax Credit (NMTC) is a mechanism by which private capital is channeled into 

low-income neighborhoods with the express intent of promoting economic development and 

jobs. [31] An investor in a community development entity (CDE) will benefit from a 39% federal 

tax credit over 7 years, in addition to the actual returns on the investment itself. The CDE, in 

turn, uses this investment to make either equity investments or loans to qualified projects within 

qualified neighborhoods. Although not a traditional source of capital for solar projects, certain 

public-sector projects are partnering with CDEs to finance PV installations, including the City of 

Denver, [32] Denver Public Schools, and Salt Lake County, Utah. 

In the Denver case, a solar developer was able to obtain low-cost loans from a local CDE to 

finance a portion of what will be 3.9 MW of solar installations on city buildings and schools. The 

low-interest loans from the CDE reduced the cost of electricity in the power purchase agreement

by 5% to 15%, depending on the project. More information on the City of Denver’s NMTC 

project can be found at http://www.nrel.gov/docs/fy10osti/49056.pdf.

3.2 Energy Savings Performance Contracting

In 2008, $2.8 billion, or 69% of the total revenue for the energy savings performance contract 

industry, was generated by projects with municipal and state governments, universities and 

colleges, K–12 schools, and hospitals. [33] This illustrates that ESPCs are a viable mechanism to 

fund energy efficiency investments for public entities. The more difficult question is their

applicability to solar energy projects. 

An ESPC is a contract between a building owner (e.g., a school district) and an energy service 

company (ESCO) to carry out energy efficiency (including renewable energy) investments. The 

ESCO conducts a comprehensive energy audit for buildings throughout the district and identifies 

improvements to save energy. [34] In consultation with the schools, the ESCO designs and 

constructs projects that meet the district’s needs. The ESCO guarantees that the improvements 

will generate energy cost savings sufficient to pay for the project over the term of the 

contract. [34] After the contract ends, all additional cost savings accrue to the district. [34] The 

energy service company can either finance the project or partner with a third party to finance it. 

Alternatively, the school district itself can finance the project and repay the debt with the 

guaranteed savings from the performance contract.

According to the National Association of Energy Service Companies (NAESCO), energy service 

companies handle the following tasks. 

• Develop, design, and arrange financing for energy efficiency projects 

• Install and maintain the energy efficient equipment involved 

• Measure, monitor, and verify the project’s energy savings 

• Assume the risk that the project will save the amount of energy guaranteed. 
23 

These services are bundled into the project’s cost and are repaid through the dollar savings 

generated. [35]

3.2.1 Incorporating Photovoltaics into an Energy Services Performance Contract

There are various approaches to including photovoltaics in ESPCs. Solar projects are usually 

only feasible within an ESPC with the help of incentives, rebates, or other forms of capital that 

can contribute to reducing the amount of financing required for the project. The ESCO can be a 

valuable resource to identify these grants, rebates, and incentives. One benefit of the ESPC 

model is the ability to bundle many energy efficiency measures from several buildings across a 

school district into one large performance contract. This method can leverage savings to reduce 

the payback period of a solar system that if implemented as a stand-alone project would not be 

feasible. This is possible because ESPCs use an average of the payback of all conservation 

measures included to determine the contract term. This is the most common method to 

implement small-scale solar projects in ESPCs.

3.2.2 Including Photovoltaics in an Energy Services Performance Contract

The Roslyn School District in New York has partnered with an ESCO in a performance contract 

that will save $230,000 annually over 15 years and capture $130,000 in solar and lighting state 

rebates. [36] Improvements to the schools across the district include building envelope and 

insulation improvements, lighting upgrades, boiler and heating system upgrades, and two 11-kW 

PV systems. [36, 37] 

Although this anecdotal example illustrates that PV installations have been installed as part of an 

ESPC, in general it has proven to be difficult, especially for larger installations. One issue is that 

the return on investment for projects that include a PV system bundled with energy efficiency 

investments such as lighting; heating, ventilating, and air-conditioning (HVAC) controls; and 

chiller upgrades could still exceed the requirements of the project sponsors. A second issue is 

that title of the equipment installed under an ESPC normally transfers automatically to the public 

agency upon the completion of the work. This impacts the ESCO’s ability to benefit from the 

federal tax credits because the intended owner of these assets is a tax-exempt, public entity. To 

work around this issue, an ESPC could be structured whereby the ESCO immediately transfers 

title to all of the energy efficiency equipment, but retains ownership of the PV system for at least 

6 years to allow for the tax benefits to vest. After the 6-year term, the ESCO could sell the PV 

system to the school district at fair market value. Anything less than FMV could trigger the 

recapturing of tax benefits earned by the ESCO. Finally, although an ESCO might have expertise 

with a wide range of energy efficiency investments, it might be less familiar with solar projects, 

thus adding complexity to the transaction. 

A possible alternative to the ESCO retaining title to the PV system for at least 6 years is to 

bundle the physical installations of both the PV systems and the energy efficiency projects, but 

separate the financing mechanisms into a performance contract and a PPA. The guaranteed 

savings under the ESPC would pay for the energy efficiency investments. In parallel, the 

building owner would purchase the electricity generated by the PV system under a PPA rather 

than buying the system outright. This preserves the shorter return-on-investment timeline for the 

energy efficiency improvements, avoids the need to purchase the system at fair market value at 

the time, and also allows the federal tax credits to be monetized through the PPA. 
24 

Despite these complexities, ESCOs have been expanding the types of technologies included in 

ESPCs. In 2006, 10% of the ESCO industry revenue came from onsite renewable energy 

projects. [33] By 2008, this had increased modestly to 14% of total revenues. [33] The individual 

renewable energy technologies themselves were not broken out in this particular study, but it 

does appear that the ESPC industry is increasing its expertise in this area.

3.3 Resources

The best resource for additional information on ESPCs is the Energy Services Coalition. [38] Its 

website provides a variety of ESCO template documents and is available at

http://www.energyservicescoalition.org/resources/model/index.html. For additional information, 

please consult the National Association of Energy Service Companies (http://www.naesco.org/), 

the State Energy or Commercialization Office, and the Status of ESPC Enabling Legislation in 

the United States (http://www.ornl.gov/info/esco/ legislation/newesco.shtml).

Assistance from a national laboratory also can be accessed through the DOE Technical 

Assistance Program (http://www1.eere.energy.gov/wip/assistance.html). Federal ESPC best 

practices and guidance documents are valuable resources that often can be modified for local 

government initiatives and can be found on the DOE Office of Energy Efficiency and Renewable 

Energy (EERE) Federal Energy Management Program (FEMP) Resources website at 

http://www1.eere.energy.gov/femp/financing/ espcs_resources.html. 

4 Summary

This report presents a number of energy efficiency and renewable energy options that are 

available to school districts as they implement their Solar Master Plans. Both direct-purchase and 

third-party finance alternatives are feasible, depending on the particular circumstances of each 

district. In certain cases the use of the various tax credit bonds will be limited to those districts 

with allocations in hand. Given its various allocations, Oakland Unified, for example, is well 

positioned to compare a variety of tax-credit bond options. Depending on available funding, 

third-party finance options could also be a course of action to pursue, even if eventual ownership 

in the medium term of the PV systems is the desired outcome. 
25 

5 References 

1. California Solar Initiative—Statewide Trigger Tracker. Go Solar California. http://www.csitrigger.com/. Accessed June 8, 2010. 

2. California Solar Initiative Program. California Public Utilities Commission, June 2010. p. 27. 

http://www.gosolarcalifornia.ca.gov/documents/CSI_HANDBOOK.PDF. Accessed June 8, 

2010. 

3. Mortensen, J. Factors Associated with Photovoltaic System Costs. NREL/TP-620-29649. 

Golden, CO: National Renewable Energy Laboratory, June 2001, p. 3. 

4. “A Guide to Installing a Solar Electric System.” Seattle City Light, August 2009. p. 9. 

http://www.seattle.gov/light/conserve/cgen/docs/SCL_SolarGuide.pdf. Accessed June 8, 2011. 

5. Christensen, C.; Barker, G. “Effects of Tilt and Azimuth on Annual Incident Solar Radiation 

for United States Locations.” Presented at the 2001 Solar Energy Forum, Washington, DC. 

6. Glossary. Database of State Incentives for Renewables and Efficiency. 

http://www.dsireusa.org/glossary/. Accessed June 8, 2011. 

7. Kelly, T. Email communication, September 2, 2010. 

8. Energy Conservation Assistance Act. http://www.energy.ca.gov/contracts/PON-10-601/PON10-601_Notice_for_new_3pct.pdf. Accessed June 8, 2011. 

9. 1603 Program—Payments for Specified Energy Property in Lieu of Tax Credits. U.S. 

Department of the Treasury. http://www.treasury.gov/initiatives/recovery/Pages/1603.aspx. 

Accessed June 8, 2011. 

10. Planning Opportunity: Treasury Grant Guidance Permits Leasing to Governments and TaxExempts. Hunton & Williams, January 2010. 

http://www.hunton.com/files/tbl_s10News/FileUpload44/16852/planning_opportunity_treasury_

grant_guidance.pdf. Accessed June 8, 2011. 

11. Status of Funds. California Department of General Services.

http://www.documents.dgs.ca.gov/OPSC/Resources/Funds_Status.pdf. Accessed June 9, 2011. 

12. High Performance Incentive Program. California Department of General Services. 

http://www.dgs.ca.gov/dsa/Programs/progSustainability/hps.aspx. Accessed June 9, 2011. 

13. Schroeder, P. “Bill Comes to BABs Rescue.” Bond Buyer Online, July 29, 2010. 

http://www.bondbuyer.com/issues/119_393/babs_bill_levin-1015368-1.html. Accessed June 15, 

2011. 

14. Energy Policy Act of 2005. http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=109_cong_bills&docid=f:h6enr.txt.pdf. Accessed June 9, 2011. 
26 

15. First Known Use of QECBs Will Save Yolo County at Least $8.7 Million over the Next 25 

Years. Renewable Energy Project Finance. http://financere.nrel.gov/finance/content/first-knownuse-qecbs-will-save-yolo-county-least-87-million-over-next-25-years. Accessed June 9, 2011. 

16. IRS Notice 2009-29, “Qualified Energy Conservation Bond Allocations for 2009.” 

http://www.irs.gov/irb/2009-16_irb/ar10.html. Accessed June 9, 2011. 

17. California Debt Limit Allocation Committee (CDLAC) QECB Program. 2009 Presentation. 

http://www.treasurer.ca.gov/cdiac/seminars/20091008/6b.pdf. Accessed June 9, 2011. 

18. California Debt Limit Allocation Committee. 

http://www.treasurer.ca.gov/cdlac/staff/20090722/7.pdf. Accessed January 15, 2011. 

19. Qualified School Construction Bond Allocations for 2009. http://www.irs.gov/pub/irsdrop/n-09-35.pdf. Accessed June 9, 2011. 

20. “Qualified School Construction Bonds. List of Issuers.” The Bond Buyer, August 2010. 

http://www.bondbuyer.com/pdfs/QSCB.pdf. Accessed June 9, 2011. 

21. Schroeder, P. “After Direct-Pay Option Is Added, QSCBs Stay Strong.” The Bond Buyer,

August 2010. http://www.bondbuyer.com/issues/119_400/-1015839-1.html. Accessed June 9, 

2011. 

22. 2010 Allocations to States of Volume Cap for Qualified School Construction Bonds.

http://www.treasury.gov/press/releases/reports/bonds.pdf. Accessed January 15, 2011. 

23. “California Charter School Scores Interest-Free QSCB Deal.” High Beam Research, July 30, 

2010. http://www.highbeam.com/doc/1G1-232996621.html. Accessed June 15, 2011. 

24. IRS Notice 2010-22, “Qualified Energy Conservation Bond Allocations for 2010.” 

http://www.irs.gov/irb/2010-10_IRB/ar07.html. Accessed June 15, 2011. 

25. QZAB Allocations. California Department of Education. 

http://www.cde.ca.gov/ls/fa/qz/introd.asp. Accessed June 9, 2011. 

26. Magee, M. “Schools getting a solar jolt.” San Diego Union Tribune, August 9, 2010. 

27. Bolinger, M. Financing Non-Residential Photovoltaic Projects: Options and Implications.

Lawrence Berkeley National Laboratory, January 2009. http://eetd.lbl.gov/ea/EMS/reports/lbnl1410e.pdf. Accessed June 9, 2011. 

28. Cory, K., Coughlin, J.; Coggeshall, C. Solar Photovoltaic Financing: Deployment on Public 

Property by State and Local Governments. NREL/TP-670-43115. May 2008. 

http://www.nrel.gov/docs/fy08osti/43115.pdf. Accessed June 9, 2011. 

29. Cimino, J. “Milpitas Unified School District Sustainability Program.” Presented at Milpitas 

Unified School District, 2009. 
27 

30. “Milpitas Unified School District Partners with Chevron and Bank of America Corporation 

on 3.4MW Solar and Energy Efficiency Program Expected to Save $12 Million for Education.” 

Business Wire, June 2008. 

http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20

080625005994&newsLang=en. Accessed June 9, 2011. 

31. New Market Tax Credits Program. 

http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5. Accessed June 9, 2011. 

32. Financing Solar Installations with New Markets Tax Credits: Denver, Colorado. NREL 

Energy Analysis Fact Sheet. September 2010. http://www.nrel.gov/docs/fy10osti/49056.pdf. 

Accessed June 9, 2011. 

33. Satchwell, A.; Goldman, C.; Larsen, P.; Gilligan, D.; Singer, T. A Survey of the U.S. ESCO 

Industry: Market Growth and Development from 2008 to 2011. LBNL-3479E (June 2010): 11. 

http://eetd.lbl.gov/ea/emp/reports/lbnl-3479e.pdf. Accessed June 9, 2011. 

34. Energy Savings Performance Contracting (ESPC). Federal Energy Management Program 

(FEMP). http://www1.eere.energy.gov/femp/financing/espcs.html. Accessed June 9, 2011. 

35. Resources. National Association of Energy Service Companies (NAESCO). 

http://www.naesco.org/resources/esco.htm. Accessed June 9, 2011. 

36. A Major Investment in a Greener Future: Energy Performance Contract Will Save on 

Energy; No Net Cost to Taxpayers for Improvements. Roslyn School District, March 2009. 

http://www.roslynschools.org/capital/epc.htm. Accessed June 9, 2011. 

37. Mohrman, T. Assistant to the Superintendent for Operations at the Roslyn School District. 

Email correspondence. August 27, 2010. 

38. Energy Performance Contracting. Energy Services Coalition. 

http://energyservicescoalition.org/index.html. Accessed June 9, 2011. 
28 

Appendices 

Appendices for this report are contained in a separate document; some of these resources were 

purchased or obtained exclusively for the three school districts and cannot be made publicly 

available. However, some of the documents are available online, and in those cases, the websites 

are provided below. These references include a number of pertinent documents related to 

financing solar installations on schools and other public facilities. A list of these documents 

follows. 

Request for Proposal for Procurement of Photovoltaic on Public Schools 

• San Ramon Valley Unified School District: http://www.srvusd.net/solar

• Mount Diablo Unified School District 

ESPC Documents

• RFP Template for ESPC: 

http://www.energyservicescoalition.org/resources/model/index.html

• Energy Performance Contract Template: 

http://www.energyservicescoalition.org/resources/model/index.html

• Financing Solicitation Template: 

http://www.energyservicescoalition.org/resources/model/index.html

Third-Party PPA Documents

• NREL Checklist: http://www.nrel.gov/docs/fy10osti/46668.pdf

• SolarTech PPA Template

• SolarTech Lease Template

• Milpitas Unified School District PPA with BankAmerica: 

https://www.musd.org/cms/page_view?d=x&piid=&vpid=1217983977356

New Markets Tax Credit

• NREL Fact Sheet on the City of Denver : 

http://www.nrel.gov/docs/fy10osti/49056.pdf

• NREL Fact Sheet on Yolo County: http://www.nrel.gov/docs/fy11osti/49450.pdf

Office of Public School Construction Funds

• School Facility Program requirements for the New Construction Grant: 

www.documents.dgs.ca.gov/opsc/Resources/SFP_NC_Rqmnts.pdf 

• School Facility Program requirements for the Modernization Grant: 

www.documents.dgs.ca.gov/opsc/Resources/SFP_Mod_Rqmnts.pdf

• Checklist for High Performance Incentive (HPI) Projects: 

www.documents.dgs.ca.gov/dsa/other/HPI_Checklist_rev02-07-10.pdf

• DSA High Performance Incentive (HPI) Scorecard and Guidelines: 

http://www.documents.dgs.ca.gov/dsa/other/GL-5_HPI.pdf