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Community Solar Garden Memorandum <br /> 4  <br />  <br />sensitive to a number of variables such as the future increase in bill credit rates, discount rates, and solar <br />panel degradation factor, among others. For this reason, the figures cited in the appendix should be <br />considered as estimates and not guarantees of future savings. <br />The future change in the utility bill credit rate to the city for solar energy produced by the garden <br />represents perhaps the most significant source of uncertainty. This differs from the subscription rate per- <br />kilowatt hour of solar energy that the city pays the developer over the life of the project, which is set by <br />the provisions of the subscription agreement. Solar bill credits from Xcel to the city are based on the <br />“Applicable Retail Rate.” A review of Xcel Energy’s electricity rates since 1992 shows an average <br />increase of 2.6 to 2.9 percent per year across all customer classes.1 As indicated in the appendix, the <br />financial model projects a net savings to the city if the bill credit rate continues to increase at the same <br />pace as the historical average. If the bill credit rate were to remain unchanged over the 25 year life of the <br />subscription agreement, the city’s cumulative subscription expenses will likely equal its cumulative bill <br />credit savings. Factors that could theoretically lead to no change, or a decrease, in bill credits include <br />significant legislative or regulatory changes to the rules of the community solar garden program or <br />changing market conditions such as long term declines in the cost of fossil fuels and other electrical <br />generation and distribution technologies. City staff believe that the potential for a net decrease in solar <br />energy bill credits over the 25-year subscription period is unlikely. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />Attachments: <br /> Community Solar Subscriber Collaborative Description <br /> Minnesota Subscribers Frequently Asked Questions, Xcel Energy <br /> <br /> <br /> <br />                                                             <br />1 Clean Energy Resource Teams, “Community Solar Garden Subscriber Questions.” Web:  <br />http://www.cleanenergyresourceteams.org/sites/default/files/CommunitySolarGarden_SubscriberQuestions_04‐27‐15.pdf   <br />38