Empowering Education: How Vehicle-to-Grid Technology Can Boost School Budgets

Historically, many schools across the United States have faced budget constraints that negatively impact the quality of education provided to students. In this article, we explore a promising solution that can prove to be an innovative source to boost school budgets. This solution involves transitioning from conventional Internal Combustion Engine (ICE) school buses to electric buses AND implementing Vehicle-to-Grid (V2G) technology. This approach leverages many of the federal and state programs being offered through the Inflation Reduction Act and Bipartisan Infrastructure Law as well as participating with local Electric Utility Programs to generate income streams while buses are idle. We explore the financial and practical benefits on how this could be an attractive solution for supporting school budgets. 

Electric School Bus Benefits

While school buses represent a smaller portion of the overall school budget, transitioning from ICE to electric buses offers significant long-term savings. Studies indicate that even after accounting for electricity costs, charging infrastructure, charging maintenance, and battery replacements, each electric bus can save up to $2,000 annually on fuel expenses [1]. Furthermore, depending on the number of miles school buses travel, electric buses can save up to an additional $4,400 per year in maintenance costs due to their simpler designs [1]. In total, each electric bus can reduce a school’s operation and maintenance costs by approximately $6,400 annually. While these are cost savings more commonly understood, some school districts are leveraging the energy storage services that these buses could offer to help support the transitioning electric grid.

What is Vehicle to Grid and How Can Electric Buses Leverage it? 

V2G technology enables bidirectional charging between EVs (electric vehicles) and the power grid. EVs can draw energy from the power grid, while also allowing it to supply excess energy back [2]. Integrating V2G technology in electric school buses not only supports grid stability and reduces greenhouse gas emissions but also offers substantial financial benefits.

Schools can generate additional revenue by participating in Demand Response programs. Demand response programs offer incentives for consumers to reduce or shift their electricity usage to reduce stress on the power grid. These programs allow the bus’ electric batteries to serve as energy capacity that can support the grid when needed. Additionally, by strategically charging electric buses during off-peak hours when electricity rates are lower and selling surplus energy back to the grid during high-demand periods, schools can create a new stream of income. Utilities are often willing to pay premium prices for this energy to avoid the higher cost of starting additional power plants to meet peak demand. Even better, many utility companies and government programs offer financial incentives for participating in these demand response programs. For example, San Diego Gas & Electric (SDG&E) provides $2 per kWh for energy supplied during grid emergencies under their Emergency Load Reduction Program [3]. Demand response programs significantly contribute to reducing the initial costs associated with deploying electric buses.

V2G as Backup Power

Besides using V2G as an additional revenue source, V2G technology can also serve as a backup power source during outages. This capability is especially valuable in areas prone to weather-related power outages. It is estimated that approximately 80% of major power outages from 2000-2021 were attributed to severe weather conditions, such as high winds, heavy winds, freezing rain, etc. [4]. Implementing V2G technology could also be advantageous for schools in ensuring operational certainty and reliability, especially to key energy loads, e.g., food supplies to prevent spoilage.

Grants and Incentives

Schools can take advantage of numerous federal and state grants available to reduce the initial cost of this investment. The EPA Clean School Bus Program, for instance, allocated $5 billion over five years (2022-2026) in rebates and grants to cover the cost of new electric buses and charging infrastructure [5]. This support significantly reduces the financial burden on schools to transition to electric buses. In addition, the Inflation Reduction Act of 2022 offers tax credits for clean energy and climate investments[new], presenting another valuable resource for schools to further reduce costs.   

Case Study

While V2G is still relatively new, several school districts across the United States have started to implement electric school buses to lower carbon emissions and reduce overall costs. One of the largest school districts in the United States, Montgomery County Public Schools (MCPS) in Maryland (MD), is currently working to replace 326 diesel school buses with electrical ones by 2025 [10]. This transition is financially feasible for MCPS due to an innovative business model providing full-service subscription, where the school is paying a service fee to utilize the electric buses. This model involves a 3rd party who is reponsible for purchase of the buses, installation of charging infrastructure, management of charging, and maintenance services. Furthermore, the 3rd party manages and optimize MCPS’ participation in demand response programs [11]. Some demand response programs that MCPS can participate in include PJM Interconnection Programs, BGE Commercial Demand Response, and Pepco Commercial Programs. While exact cost savings and revenue are not readily available yet, these figures can be estimated. Assuming each bus can save approximately $8,000 annually (according to the calculations above), MCPS can expect to save around $2.6 million annually once all 326 electric school buses are deployed successfully. 

Summary

Ultimately, implementing Vehicle-to-Grid technology in schools offers a smart and sustainable solution to persistent budget constraints. By enabling electric buses to store and supply energy, schools can significantly reduce their electricity costs and even generate additional revenue through demand response programs. V2G not only provides financial benefits but also serves as a backup power source during power outages. With federal grants and incentives available, V2G technology is undeniably a wise option for schools.

References

[1]

J. Lloyd, “The Four Most Common Drawbacks of Electric School Buses and What You Can Do About Them,” Thomas Built Buses, Oct. 01, 2019. https://thomasbuiltbuses.com/resources/articles/common-drawbacks-of-electric-school-buses/

[2]

Å. Frengstad, “Guide: Here’s What You Need To Know About Vehicle-to-Grid (V2G),” www.current.eco, Mar. 31, 2022. https://www.current.eco/resources/articles/vehicle-to-grid-v2g (accessed Jul. 24, 2024).

[3]

R. Gray, “First West Coast School Bus V2G Pilot Project to Begin,” School Transportation News, Jul. 28, 2022. https://stnonline.com/news/first-west-coast-school-bus-v2g-pilot-project-to-begin/ (accessed Jul. 24, 2024).

[4]

“Surging Weather-related Power Outages | Climate Central,” www.climatecentral.org, Sep. 14, 2022. https://www.climatecentral.org/climate-matters/surging-weather-related-power-outages

[5]

N. Akopian, “Section 45W and Section 30C Electric School Bus Tax Credit Explainers | Electric School Bus Initiative,” Electricschoolbusinitiative.org, 2024. https://electricschoolbusinitiative.org/section-45w-and-section-30c-electric-school-bus-tax-credit-explainers (accessed Aug. 04, 2024).

[6]

“Total Cost of Ownership Calculator for Electric School Buses | Electric School Bus Initiative,” Electricschoolbusinitiative.org, 2023. https://electricschoolbusinitiative.org/tco-calculator (accessed Aug. 04, 2024).

[7]

M. Levinson, P. Burgoyne-Allen, A. Huntington, and N. Hutchinson, “Recommended Total Cost of Ownership Parameters for Electric School Buses: Summary of Methods and Data,” World Resources Institute, Jan. 2023, doi: https://doi.org/10.46830/writn.22.00024.

[8]

“Calculating Total Cost of Ownership (TCO) for your Public-School EV Fleet,” PG&E. Accessed: Aug. 04, 2024. [Online]. Available: https://www.pge.com/content/dam/pge/docs/clean-energy/electric-vehicles/public-school-total-cost-of-ownership.pdf.coredownload.pdf

[9]

“Electric Buses Get Summer Job in Massachusetts,” School Bus Fleet. https://www.schoolbusfleet.com/10179570/electric-buses-get-summer-job-in-massachusetts

[10]

P. Johnson, “The nation’s largest electric school bus fleet providing grid demand response solutions,” Electrek, Nov. 02, 2022. https://electrek.co/2022/11/02/largest-electric-school-bus-fleet-providing-grid-demand-response/ (accessed Jul. 26, 2024).

[11]

M. Lewis, “The largest electric school bus fleet in the US just launched in Maryland,” Electrek, Oct. 25, 2022. https://electrek.co/2022/10/25/largest-electric-school-bus-fleet-us/