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Home My WebLink About20190520 - Community Solar Review of Options presentation Community Solar Review of Options Peter Lindstrom and Lissa Pawlisch Clean Energy Resource Teams (CERTs) Hastings Utility Committee Presentation, May 20, 2019 1 Available Solar Subscription Options o What is different now than in 2017 when the Council visited this idea? - Risks and benefits of solar subscriptions o Option to partner directly with Excel - Future of Solar and other renewable energy sources (wind) Mission: We connect individuals and their communities to the resources they need to identify and implement community-based clean energy projects CERTs: Minnesotans Building a Clean Energy Future 2 The Clean Energy Resource Teams—or CERTs—are a statewide partnership with a shared mission to connect individuals and their communities to the resources they need to identify and implement community-based clean energy projects. We empower communities and their members to adopt energy conservation, energy efficiency, and renewable energy technologies and practices for their homes, businesses, and local institutions. B3 Benchmarking – The Hastings Opportunity 3 Energy Efficiency Initiatives 4 B3 Benchmarking – Red Wing 5 You’ve Got Options! Green Tariffs Xcel Renewable Connect Green Pricing/RECs Community Solar Gardens Third-Party Solar Financing Direct Purchase Green pricing doesn’t have to 5-10 years. Fine line between recs, green pricing and green tariffs. Differences in the structure of the agreement. Other utilities have green pricing that are similar or you could go out on the market and by recs. 6 Green Tariffs & Community Solar Gardens High level comparison of attributes. Benefits to both, and yet some differences. Can do a combination. Xcel Renewable Connect – governments can choose a subscription size. Renewable energy certificate. month-to-month to five and 10 year terms 7 Xcel’s Renewable*Connect 8 Definition: Centrally-located solar photovoltaic (PV) systems that provide electricity to participating subscribers What are Community Solar Gardens? mncerts.org/solargardens 9 City Community Solar Subscribers Annandale Public Schools Bloomington Schools Blue Earth Co Burnsville Chanhassen Chanhassen Columbia Heights Edina Falcon Heights Faribault Hennepin County Hennepin County Medical Center Hugo Inver Grove Heights Jordan Lakeville School district Leech Lake Band of Ojibwe Mahtomedi Mankato Mankato Schools Maplewood Met Council Minneapolis Minnetonka Schools Northfield Oakdale Paynesville Paynesville Schools Ramsey County Red Wing Red Wing School Dist. Rice County Robbinsdale Rogers Rosemount Roseville St. Anthony Village St. Cloud St. Cloud Schools St. Paul Stillwater Taylors Falls Woodbury 10 How Does it Work? SUBSCRIBERS: individuals or groups to get solar power 3rd Party Operator develops & runs garden. They also maintains relationship w/ subscriber for payment. Utility provides subscriber w/ bill credit. Subscriber Requirements The following rules apply to all Solar*Rewards Community subscribers: • A subscriber must be an electric retail customer of Xcel Energy • Subscriptions must not exceed 120% of your average annual electric energy usage • Subscriptions must not exceed 40% of a single garden • Subscribers will be provided a monthly credit on their bill. The credit will be determined on a dollars per kilowatt-hours produced ($/kWh) basis by Xcel Energy. https://www.xcelenergy.com/staticfiles/xe-responsive/Admin/Managed%20Documents%20&%20PDFs/MN-SRC-Subscriber-FAQs.pdf 11 Subscription Models 12 Are Subscriptions Available? Current rules allow subscriptions from CSGs in your home county or an adjacent county. Per Xcel’s list, there are 7 subscriptions available in surrounding counties. Source: https://www.xcelenergy.com/programs_and_rebates/residential_programs_and_rebates/renewable_energy_options_residential/solar/available_solar_options/community-based_solar 13 Bill Credits Rates Each application Deemed Complete in a given calendar year will have a VOS Bill Credit Rate table applicable to the vintage of the VOS based on the calendar year it was Deemed Complete (“VOS Vintage Year”). • Each VOS Vintage Year table of Bill Credit Rates will have separate rates for each of the 25 years of production from the garden: – The rate for Year 1 for a given VOS Vintage Year will apply for all Bill Credits associated with production in the first calendar month associated with the Date of Commercial Operation and all subsequent calendar months in the same calendar year. – The VOS Bill Credit Rate for Year 2 for a given VOS Vintage Year will apply for all calendar months in the following calendar year. – In the same way, the rates for Year 3 through 25 shall apply in sequential order for each of the following calendar years. – Where the Date of Commercial Operation is not January 1, the Year 25 rate shall also apply to the final calendar year up to the end of the Term of the Contract. 14 Historical Energy Trends Source: Doug Tiffany, https://www.cleanenergyresourceteams.org/sites/default/files/Xcel-CSG-Calculator-CERTs-DougTiffany_Narrative_2.pdf 15 Where is the Risk: ARR 16 Where is the Risk: VOS Roughly half of the energy used by city hall. 17 What Does the Future Hold? 18 Want to Follow Up? Peter Lindstrom plindstr@umn.edu 612-625-9634 Lissa Pawlisch pawl0048@umn.edu 612-624-2293 19 Who has done Direct Purchase? Hennepin County City of Hutchinson City of Minneapolis Minneapolis Parks Mounds View Public Schools City of St. Louis Park City of St. Paul City of Duluth Hutchinson example 1970s landfill. Wastewater plant was city’s biggest energy user. 400kw array All behind the meter $2 million from Renewable Development Fund Brownfield to brightfield Metropolitan Airports Commission 20 Third-Party Solar & Direct Purchase Third Party Advantages No Upfront Costs/Take Advantage of Tax Credits No Maintenance Costs Predictable Cost of Electricity PPA (No Power Created? No $) -------------- Third Party Challenges Long Term Contract w/Complex Terms Purchase Price Uncertainty Direct Purchase Advantages Ability to Use Cheap Public Debt Full Control Over Project Typical Project Management: Design, Bid, Build -------------- Direct Purchase Challenges Finding the $$$$ Project Management & Ongoing Maintenance No Tax Credits or Accelerated Depreciation 21 Who’s Doing Third-Party Solar? Annandale Public Schools Becker High School City of Brooklyn Park Burnsville-Eagan-Savage School District City of Champlin Chippewa Middle School in North Oaks City of Crystal Chisago Lakes School District Chisago Primary School City of Cottage Grove City of Columbia Heights Farmington Schools Forest Lake Public Schools City of Falcon Heights City of Golden Valley Hopkins High School Holdingford Public Schools City of Inver Grove Heights Lester Prairie Water Treatment Center City of Lindstrom City of La Crescent City of Minneapolis Minneapolis Public Schools City of Maplewood City of Newport City of Oakdale City of Red Wing City of Richfield City of Roseville Rockford Area Schools City of Rogers City of St. Cloud St. Cloud School District City of Scandia City of Shoreview City of St. Paul Waconia Public Schools West St. Paul-Mendota Heights-Eagan Schools City of Woodbury Each one of these districts may have multiple host spots Solar lease….then last 2 years more ppa’s. Several 40kw – FH, Oakdale, Maplewood, Woodbury Shoreview – 123kw St. Cloud - 240kw at WWTP Edison High School – 485kw is being built now Farmington Public School – 715kw Brooklyn Park – 1.5 Megawatt 22 If you would please explain the difference between ARR and Value of Solar (VOS) rates. In talking to 4 different solar subscription providers, the ARR rates are dwindling and we are quickly losing out on obtaining the best rates. I think at this point, we would be looking at proposals that would have a combination of ARR and VOS. I was hoping you would address the perception of risk that Councilmembers have had in the past with the ARR rates. They believe there is a huge risk that locking into ARR rates are going to put the City in jeopardy of paying more for a solar subscription then a regular Xcel energy rate. If you would please take several minutes to explain electric utility rate trends over the last 30+ years and highlight how the likelihood that an ARR with a 1 escalator would dip beneath the regular rate in the long term is remote. That is the issue that killed it last time. They just didn't understand the economics behind it and the staff didn't take the time to figure it out themselves. 23