HomeMy WebLinkAbout09 12 2016 Community Solar Gardens PresentationCommunity Solar Gardens
Council Work Session
September 12, 2016
Community Solar Gardens
•In communities across the United States, advances in solar technology, an increase in
federal and state tax incentives, and creative new financing models have made solar
projects including community solar projects, more financially feasible.
•The Minnesota Renewable Energy Objective (REO) contained in Minnesota Stat.
§216B.1691 was first enacted by the Minnesota Legislature in 2001.
•As originally enacted the Statute required electric utilities to “make a good faith effort”
to obtain 10 percent of their Minnesota retail energy sales from eligible renewable
energy sources by 2015.
•Monitoring of progress toward this goal showed challenges for electric utilities to meet
this goal.
•In 2013, state statute §216B.1691, subd. 4 created the Renewable Energy Credit (REC)
program to aid utilities in meeting these goals.
•Currently Xcel is required to have 25 percent of their Minnesota retail
energy sales from eligible renewable energy sources by 2025.
Minnesota Community Solar
Gardens Program
The Community Solar Gardens program, established in 2013, allows
Minnesota Businesses and residents to participate in a shared
offsite solar project.
How does it work?
1.Developer constructs a centrally-located Community Solar
Garden and signs up Subscribers.
2.Subscribers receive bill credits on Xcel Energy electric bill for
their share of the electricity produced by the CSG.
3.Subscribers pay the developer for the bill credits received at a
negotiated, discounted rate.
Minnesota Community Solar
Gardens Program
Developer feeds
electricity to grid
Xcel Assigns
Credit to CityCity pays Developer
discounted rate
Minnesota Credit Rate Calculation
The value of the CSG bill credit is based on Xcel’s published “Applicable Retail
Rate” (“ARR”) for the client’s customer class plus an additional $0.02/kWh for
the SRECs produced by the system.
The ARR is a formulaic fully loaded, or “all-in” retail rate for the participating
client’s customer class. It includes Xcel’s charges for the for energy supply,
demand, customer fees and all applicable riders.
The current CSG bill credit is $0.11914 per kWh for most commercial customers.
This rate is subject to change every year, but the formula will always stay the
same.
CSG Bill
Credit
Xcel’s Total Annual Revenues ($)
Total Annual Sales (kWh)
(ARR per customer class)
$0.02/kWh
(SREC credit)
Xcel is contractually obligated to
provide the client with CSG bill credits
at prescribed rate for 25 years
CSG rate is fully protected from
risk of tariff structure changes or
net metering law changes
Minnesota Credit Rate Calculation
SoCore Price Offerings
•Three rate structures: Fixed, 2% Escalator and one indexed to the ARR
•Three terms 15, 20, or 25 year
Depending on rate
and term the
savings is projected
to range from
$200,000 to
$2,800,000
assuming 1,511 kW
over the life of the
agreement
0.05
0.10
0.15
0.20
0.25
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
ARR Indexed 2%, Fixed 0%, Fixed
CSG Program
Benefits
•Savings on electrical costs
•Currently there are tax incentives to aid in the
development of CSGs
•No Guarantee the program will continue
Risks
•The ARR is not guaranteed. Models are based on
historical inflation of the rate.
•This is a new program and there is no working
experience with how the credits will flow.
Next Steps
•Select rate structure and term
•Finalize SoCore contract draft and review
•City Council approval