The New Value Proposition for Sustainable Schools

New funding opportunities, rising energy costs and resiliency concerns have changed the cost-benefit analysis for investing in better-performing schools.

By Ellen Mitchell
Director of Sustainability and Applied Research

For Texas school districts, there has never been a better time to consider sustainable design strategies. A perfect storm of economic and regulatory factors has changed the financial calculus around building more cost-effective, resilient facilities.

If you have lived in Texas for any amount of time, you see that energy is getting more expensive. Until recently, Texas enjoyed some of the cheapest rates in the nation, making energy-reduction investments a low priority due to long payback timelines.

That changed with Winter Storm Uri. Since 2021, electricity costs in the state have risen as much as 50%, and natural gas prices have nearly doubled at their peak, according to the U.S. Bureau of Labor Statistics. Schools face a situation where simply keeping the lights on and the AC running is increasingly eating into their operations budgets.

Another major factor that has become apparent to Texans in both extreme heat and extreme cold is that the grid routinely cannot keep up with demand. “Snowmageddon” revealed major deficiencies in Texas’s insular approach to energy generation and distribution. When many parts of the state lost power in the winter of 2021, schools lost days of classroom time and incurred millions of dollars in emergency utility costs and damage to buildings. Despite limited improvements, the grid is still vulnerable. This places school districts at ongoing risk for emergency repairs, disruption and unforeseen expenses.

But there is some good news. Legislation on the national level means school districts can now get help funding technologies that will make campuses more energy efficient and resilient to weather emergencies. The Inflation Reduction Act (IRA), enacted in 2022, allocates billions of dollars to support renewable energy, energy storage and energy-efficient systems. These incentives, once exclusively available to corporations and for-profit companies, are for the first time accessible to nonprofits and tax-exempt entities, including public schools.

Together, these factors present a strong case for school districts to rethink the value proposition for investing in better-performing schools. Districts have an unprecedented opportunity to make better use of capital funds, leverage available resources and build more-resilient schools that are less expensive to operate.

Insight Sustainable Schools 1
Passive strategies like the clerestory windows above this middle school library cut electricity costs without high-tech equipment.

To dive deeper into the challenges and opportunities, LPA recently conducted a brainstorming session aimed at helping a San Antonio district evaluate a net zero energy strategy in preparation for a bond election. The team evaluated strategies based on upfront costs, annual energy savings, resilience needs and IRA incentives. What emerged was a flexible framework that can be applied to school districts throughout the state, helping to match high-performance design with financial and operational constraints.

The framework divides high-performance design into three tiers: passive, active and renewable. The passive tier includes architectural strategies such as building orientation, glazing, shading, daylight and envelope considerations. Passive design strategies reduce the energy demand with little or no initial costs and minimal additional maintenance, making them an attractive starting point for any school district. Using passive strategies alone, projects can significantly reduce their energy demand, decreasing the needed size, capacity and cost of active systems.

The active HVAC, lighting and electrical systems are where the IRA starts to matter. Solar, waste energy recovery and geothermal systems are among the options that can make significant impacts on operational energy consumption. While typically more expensive than standard options, these energy-efficient systems are now eligible for up to a 70% rebate through the IRA, received as a direct payment from the Internal Revenue Service.

Historically, renewable energy in the form of photovoltaic (PV) panels has been thought to be too expensive and out of reach for most Texas public school districts. That may no longer be the case. The up-front cost of PV has steeply declined in the last decade, a trend that will only increase as the IRA incentives drive up demand. With lower capital costs, the payback period for the systems to pay for themselves also declines, enabling schools to more quickly recoup their investment and benefit from substantially reduced energy bills.

Sustainable strategies can benefit campuses in many ways. Putting energy use and conservation on display creates a culture of exploration and learning that supports academic goals and STEM curriculums. Incorporating PV and battery storage makes schools more resilient and capable of operating at least partially off-grid through practically any disruption. Thoughtfully placed on roofs, parking lots or even outdoor pavilions, solar canopies provide much-needed shade for both people and cars.

On many levels, the value proposition for energy-efficiency systems and resiliency has changed. The key is including options early in the planning and budgeting effort and taking a holistic, data-driven approach to properly evaluate the potential of all capital expenditures. With many incentives in place for 10 years, districts can plan with greater confidence as they develop facility master plans and prepare for bond funding cycles.

No one strategy will suit every campus; one size doesn’t fit all. Today, there are opportunities that weren’t available a few years ago. Districts willing to plan ahead and think differently can reduce annual operating costs, create more resilient schools and free up money for what really matters: helping teachers teach and students learn.