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Aoi��YUtle anada TO FROM: DATE: Mayor Keis and Members of City Council Joel Hanson, City Administrator February 22, 2016 RE: Consider Authorizing Lottery Submittals for Solar Program Attached is some information recently received from Cedar Creek Energy regarding our possible participation in the Solar Initiatives lottery. The basics of this program are as follows: • We would place solar panels on the roofs of certain buildings to generate solar power which would be used to offset electricity usage at those buildings. Anything not consumed would be sold back to the grid. • The buildings we could readily consider are the Fire Station, the Public Works Facility, and City Hall. • We would need to enter the Minnesota Solar Energy lottery (deadline is this coming Sunday — 2/28). I'm told each building has a 30% chance of being selected. Notifications will be made by early April. • If selected, we would then decide on how to move forward (or if we even want to move forward). If we want to participate, there are two options: 1. We pay for the system install (roughly estimated at $145,000 for the PW Building). We would then receive credit for energy generated as well as a production incentive. The payback is estimated at about 10 years. The system's expected life is around 30 years, so we would then continue to generate savings for that period of time. (See Attachment #1) 2. We enter in to a Power Purchase Agreement (PPA) where we pay nothing for the system install. We would generate about a 30%+ savings in annual energy costs. The installer would receive the generation credit. At the end of 20 years, we could have the system removed, continue with the program, or purchase the system (likely for $1) and continue to generate savings. (See Attachment #2) • Buildings not selected in this year's lottery can reapply the following year. The lottery program is slated to run for another seven years. This is a lot of info to digest in a short amount of time. Staff's quick read is we don't have a lot to risk if we enter in to a PPA and we should save about 30% on our annual electric charges. We have not researched this company to any great extent, but they indicate they are an Xcel approved contractor. Here is a link to their website: http://cedarcreekener com/ This seems like a low risk proposition at this point in time and it has the potential to provide us with energy savings (Greenstep Community???). The council will need to decide if they want us to move forward at this time. 2