Impacts Of Investment Tax Credit On Public Schools In The United States: A Paired Analysis Of Four Connecticut Projects

Abstract

Public schools adopt solar when the price meets their budgets and the financing is available. This study quantifies how the Investment Tax Credit affects both. Using four executed projects in Connecticut, two behind the meter and two front of the meter, we built paired cash flow models that hold technology, production, installed cost, loan terms, reserves, and a 15 percent levered IRR target constant while toggling the ITC between 40 percent and 0 percent. Production comes from HelioScope files that are used to bid on projects. Debt is sized to a fixed DSCR and an Excel VBA solver sets the PPA needed to meet the return. The comparison isolates the policy lever. Across all four sites, the required PPA rises by about 42 to 60 percent when the ITC is removed. Sponsor equity at commercial operation increases sharply as tax-equity proceeds disappear, while debt expands only modestly because coverage limits bind. Unlevered IRR and NPV margins move in the expected direction given the higher revenue requirement. The pattern is consistent across system sizes and metering configurations. The implication is practical for districts and program administrators. A 40 percent ITC functions as an affordability and bankability tool for school-sector PV, enabling lower PPAs and smaller equity checks at closing under otherwise identical conditions.