Solar power has a bright future at Portola Valley schools, with a newly approved plan to install photovoltaic systems at the Corte Madera and Ormondale campuses.

The project, which has a total cost of approximately $2.5 million, is possible thanks to a federal stimulus windfall that the district recently received.

Over the next 25 years, the solar panel system is expected to save the district more than $4 million in electricity costs, according to an analysis presented to the school board on Sept. 30 by Green Resource Network.

Last year, the district's annual electric bill was about $130,000.

The board unanimously approved the project, with board member Steve Humphreys absent.

The rooftop systems at the two schools are designed to produce 90 percent of the electricity that's currently used each year, said Rashmi Menon of Green Resources Network. Current regulations allow Pacific Gas & Electric customers to zero-out their electricity bills at the end of the year — any excess electricity flowing back into the power grid is basically a freebie for PG&E.

That 10-percent gap allows the school to make future improvements in energy efficiency, without producing excess electricity, Ms. Menon told the board.

The project would install a 150-kilowatt system of grid-tied solar panels at Corte Madera and a 130-kilowatt system at Ormondale.

Portola Valley certainly isn't the only local school district looking to install solar power. The Menlo Park City School District is embarking on a fundraising campaign to install a system at Hillview Middle School, and looking at the district's elementary school campuses as well.

But Portola Valley has one big advantage. It was one of only two San Mateo County school districts to hit the jackpot in the recent lottery for Qualified School Construction Bonds, part of the American Recovery and Reinvestment Act that was signed into law in February.

As a result, the district is eligible for $2.85 million in tax credits. The tax credits cover the interest payments on school construction bonds, and are intended to free up school district money for additional construction or facility rehabilitation projects.

While the district is moving quickly on the solar project to meet the deadline for the stimulus tax credit bonds, it's also pursuing another source of financing.

The district could qualify for a low-cost California Energy Commission loan that carries a 1 percent interest rate, a type of financing that may ultimately prove cheaper than the stimulus bonds.

"The loan terms are so attractive, we should proceed with this project," said board member Bill Youstra.

Board members voted to apply for the state's low-cost loan program after learning from the district's bond financial adviser Tony Hsieh of Keygent that the market for the tax-credit bonds is very small, and that falling interest rates paid to investors are making the bonds less attractive.

But whichever type of financing it uses, the district is likely to benefit from softening prices for solar panel systems.

"It's amazing how much prices have decreased from when we asked in April compared to now," said Ms. Menon.

Rebates from the California Solar Initiative sweeten the deal even further, to the tune of an estimated $587,000 over five years.

Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.