R4 SOLAR SUBSCRIPTIONS GO LIVE
R4 Solar has arrived in six CMMPA/CMPAS cities including Blue Earth, Granite Falls, Janesville, Kenyon, Kasson, and Sleepy Eye. Now, through R4 Solar, interested public power customers in these cities can purchase community solar subscriptions to a local community billboard and a utility-scale municipal project partnership. The local “Billboard Project” of approximately ten panels is planned for completion in 2017.
Voluntary subscribers to R4 Solar gain access to a price-competitive and hassle free alternative to a rooftop system. In exchange for buying a solar subscription, subscribers can achieve environmental stewardship and receive an offsetting credit on their utility bill for the solar panel’s production.
R4: RENEW. REDUCE. RESPECT. REPEAT.
These actions “Are For” utilizing sources of renewable energy, reducing unnecessary use, respecting the environment, and repeating steps toward responsible energy practices.
WHY R4 SOLAR?
• Offers low-cost access to solar generation
• Minimizes operational issues
• Reduces carbon footprints from electrical use
• Prevents rate cross-subsidization or costs shifts to non-solar customers
• Provides a price-competitive, hassle-free, shared community resource
• Eliminates the upfront costs and risk related to rooftop solar systems
CREATING A STABLE SOLAR PROGRAM
Cost and risk were the main issues to overcome in developing R4 Solar. CMPAS's comprehensive analysis of project bids revealed that megawatt-scale, centralized projects in the form of power purchase agreements were approximately 33 percent lower in price than kilowatt-scale distributed solar proposals.
The ongoing concern of taking on too much long-term, fixed price risk — at a time when solar costs were decreasing about 10 percent a year — was partially alleviated through an unplanned partnership between CMPAS and Southern Minnesota Municipal Power Agency (SMMPA).
As CMPAS compared submittals to its request for proposals (RFP), the agency learned that SMMPA was also reviewing an RFP from the same vendor. Both joint action agencies had similar desires to build a megawatt-scale project to capture economies of scale but lacked enough member interest to commit to a large project. The joint arrangement with SMMPA mitigated risk while allowing CMMPA cities to test the marketability of community solar locally in partnership with other public power utilities in the Lemond community solar project near Owatonna, MN.
COSTS FOR CMMPA UTILITIES
CMMPA utilities sign one-year contracts (with an option for annual renewal) agreeing to purchase the rights to a share of the production from the SMMPA Owatonna Lemond project for approximately $4,500 per 40 kilowatts. The energy output (approximately 50,000 kwh/year) is initially blended into the participating member utilities’ wholesale portfolio rate base. For another optional $12,000, utilities can also install a local “billboard” project consisting of ten panels at a local site of their choice.
As the utility sells subscriptions to retail customers, the cost of the solar energy is removed from the utility's rate base and charged directly to the subscribing customer.
COSTS FOR RETAIL CUSTOMERS
Retail subscriptions start in July and cost $42.50 a panel. Customers can choose to purchase subscriptions to match their energy use based on their billing statement for a 12-month period, and those beginning mid-year pay a pro-rated amount.
Customers qualify for credits based on the energy produced by the panels and the current wholesale market value of energy in the MISO market. At current wholesale market rates, the retail customer will receive approximately $30/year in financial credits to offset the upfront annual subscription cost of $42.50.
Utility-Sized vs. Rooftop
Economies of Scale Dramatically Lower Fixed Costs Associated with Solar Energy Production