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House Research Department Updated: October 2017 <br />Xcel Energy’s Community Solar Garden Program Page 8 <br />efforts to fully subscribe their gardens, and pass on the cost savings to all ratepayers via a <br />reduction in the fuel clause rider. <br />The commission found that not requiring Xcel to pay for unsubscribed energy would increase <br />investor uncertainty, making solar gardens more difficult to finance. It determined that for solar <br />gardens above 40 kW capacity, Xcel is required to pay for unsubscribed energy at the company’s <br />avoided cost rate, and at the company’s average retail energy rate for smaller solar gardens.23 <br />The commission also ordered Xcel to purchase solar garden RECs associated with unsubscribed <br />energy at $0.01 per kWh.24 <br />These provisions also apply to solar gardens receiving the value-of-solar rate for subscribed <br />energy. <br />Contract Length Is Set at 25 Years <br />Xcel proposed a 20-year term for solar garden contracts. The commission, concurring with <br />several commentators, ordered that a 25-year term be used in order to be consistent with the <br />Department of Commerce’s value-of-solar methodology, which assumes that a solar photovoltaic <br />system will last for 25 years.25 <br />For more information about energy, visit the utility regulation area of our website, <br />www.house.mn/hrd/. <br />23 April 7, 2014 Order, p. 17. See fn. 3 for a definition of “avoided cost.” <br />24 August 6, 2015 Order, p. 25. <br />25 April 7, 2014 Order, p. 22; Minnesota Department of Commerce, Division of Energy Resources, Minnesota <br />Value of Solar: Methodology, April 1, 2014, p. 6, https://mn.gov/commerce/energy/images/MN-VOS-Methodology- <br />FINAL.pdf.