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House Research Department Updated: October 2017 <br />Xcel Energy’s Community Solar Garden Program Page 3 <br />Xcel’s Community Solar Garden Program: Selected Provisions <br />Program Feature Commission Decision <br />Statewide Program Capacity Unlimited <br />Rate at which Solar Garden <br />Generated Electricity Is Purchased <br />by Xcel and Credited to Subscribers <br />Value-of-solar rate: $0.1033 in 2017; $0.1006 in 2018 <br />Capacity Limits for Co-located Solar <br />Gardens <br />1 MW <br />Project Completion Deadline 24 months after Xcel determines that the application is <br />complete <br />End-of-Year Treatment of Bill <br />Credits <br />Bill credits are carried forward for at least 12 months; Xcel <br />purchases all outstanding credits as of last day of February <br />Payment to Solar Garden Operators <br />for Unsubscribed Energy <br />> 40 kW gardens: Xcel’s avoided cost rate,3 plus 1 cent per <br />kWh for RECs 4 <br />< 40 kW gardens: Xcel’s average retail rate, plus 1 cent per <br />kWh for RECs <br />Contract Length 25 years <br />Provisions of Xcel’s Community Solar Garden Program <br />Statewide Program Capacity Is Unlimited <br />Although Xcel originally proposed limiting the size of the program to 20 MW during its initial <br />two years, the commission decided not to place a limit on the aggregate capacity of solar <br />gardens, in part to maximize the opportunity for developers to take advantage of the existing 30 <br />percent federal tax credit for solar systems, which was scheduled to decline to 10 percent <br />beginning in 2017.5 Interest in participating in the program vastly exceeded even the most <br />optimistic expectations, as discussed below. <br />3 Under Minnesota’s net metering statute, Minnesota Statutes, section 216B.164, subdivision 3, electric utilities are required to purchase electricity produced by a generator with a capacity below 40kW at the utility’s “avoided <br />cost.” The statute utilizes the federal definition of that term: the incremental cost to the utility of generating or <br />purchasing the same amount of energy from a source other than the net metering generator. See Code of Federal <br />Regulations, title 18, section 292.101, paragraph (b), clause (6), and section 292.304. <br />4 A Renewable Energy Certificate (REC) is a tradable, contractual instrument representing the property rights <br />to the environmental, social, and other nonpower qualities of 1 MWh of renewable electric generation. RECs can be <br />sold separately from the underlying physical electricity generated from renewable sources. Purchased RECs can be <br />used to satisfy part or all of a utility’s obligation under Minnesota’s Renewable Energy Standard (Minn. Stat. § <br />216B.1691) to generate a specific proportion of its retail electricity sales from renewable energy at specific times, <br />for example, 25 percent by 2025. Under Xcel’s solar garden program, no REC values will be paid if the solar <br />garden receives financial incentives under Xcel’s Solar*Rewards or the state’s Made in Minnesota program, since <br />these programs require RECs to be transferred to Xcel without compensation. <br />5 Minnesota Public Utilities Commission, In the Matter of the Petition of Northern States Power Company, dba <br />Xcel Energy, for Approval of Its Proposed Community Solar Garden Program, Docket No. E-002/M-13-867, Order