If there is an area within the transportation sector in urgent need of electrification, it is most certainly the transportation of school-age children.  Continuing to expose our children to toxic exhaust from diesel-powered school buses is too great a health risk.  Electric school buses represent the best, safest alternative for transporting them.

The problem, of course, is that moving from diesel-powered school buses to electric buses is expensive.  There is not only the cost to purchase the electric school bus (nearly twice as expensive), but there is also the expense of adding charging infrastructure to the depot and the long-term increased costs of relying on utility-provided energy to power the buses.

There are government programs to help with the purchase of electric buses and even some to help with buying and installing charging infrastructure, but independent school bus operators are left largely on their own to manage the increased utility costs associated with operating electric buses.   

Reliance on utility-provided energy is not the only option 

Forward-thinking operators can consider behind-the-meter systems that generate and store energy to meet their electric charging requirements.  These systems, known as “microgrids”, include on-site solar PV, battery storage, and building management software. They operate to reduce costs substantially and can even earn money by operating in grid markets. The upfront cost of a microgrid can be substantial, but innovative vendors are offering exciting new financing options that allow operators to reap the financial benefits of such a system without taking on the upfront capital investment or ongoing operating responsibilities.

Power Purchase Agreement (PPA)

A PPA is a contract between the business owner and the vendor wherein the vendor owns and maintains the microgrid on the owner’s property while the owner agrees to purchase the electricity generated by the system at a predetermined rate, with a minimum purchase requirement and flat or low fixed escalated pricing.  Rates may be a discount to current utility rates.

Benefits​ of a PPA

  • Cost Savings: the owner locks in an electricity rate lower than available utility rates. This can lead to significant savings on electricity bills over the length of the agreement term.​
  • Predictable Energy Costs: PPAs typically have fixed or predictable pricing structures, which can protect the owner from future utility rate increases.
  • No Upfront Costs, Shifts Operational Risk to Expert: the vendor covers the installation, operation, and maintenance costs of the microgrid. This allows bus operators to preserve their capital and management focus for their core business.
  • Energy Independence and Resilience: battery systems store excess solar energy generated during the day for use during peak demand periods or grid outages.
  • Environmental Benefits: reduced reliance on fossil fuels and utility power lowers the facility’s carbon footprint.​

A PPA is a multi-year commitment.  For owners considering this type of financing, the vendor must be able to present a strong and deep economic case, along with being an experienced installer of microgrids and possessing the institutional integrity to deliver on the PPA as promised.  Sprocket Power has installed multiple microgrids and is a leader in innovative financing of sustainable energy solutions.  (As seen in the NYBCA Spring Newsletter.)

To discuss PPAs with Sprocket Power, contact:

Maria Fields at (914) 646-4016, mfields@sprocketpower.com, or

Ben Kriegler at (917) 363-0606, bkriegler@sprocketpower.com.