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Community Solar Garden Memorandum 5 Appendix I: Community Solar Garden Subscription Cost Comparison & Estimated Cumulative Savings Scenarios Costs: A subscription to a community solar garden offers the city several several potential cost and administrative efficiencies. Developing a solar array equivalent to the size of the city’s proposed community solar garden subscriptions would require a significant upfront capital investment. According to data compiled by the National Renewable Energy Laboratory (NREL), the median cost to construct solar electricity arrays between 250 kilowatts (kW) and 500 kW in size is $3.44 per watt.2 If the city chose to build its own solar array, the city be responsible for the upfront capital costs in addition to the occasional operations and maintenance costs throughout the life of the project. The city would also bear some risk for equipment repairs that may fall outside of the scope of the product warranties. Community solar gardens may benefit from several financial advantages. Private developers of solar projects may utilize a federal tax credit in the amount of 30% of the project costs as well as accelerated depreciation, which further enhances the financial value of the project. By bundling multiple subscriptions, community solar garden developers can build larger projects, which benefit from economies of scale that may reduce the overall project costs per kilowatt. According to NREL’s data, the national median price per kW of a solar array between 500 – 1,000 kW in size is $2.93, compared to a median price per kW of $3.44 for arrays between 250 – 500 kW in size.3 Under the proposed community solar garden subscriptions, the city only makes on-going monthly payments. The garden operator is responsible for the upfront development costs and on-going maintenance and administrative costs of the garden. In most years, the city’s annual savings from the community solar garden bill credits are expected to equal or exceed the city’s subscription payments to the solar garden developer. Estimated Savings from Proposed Community Solar Subscription Agreements: City staff reviewed the estimated financial implications of all of the solar gardens subscription opportunities received in the lottery. The scenarios below estimate the cumulative cost savings from the staff recommendation of a subscription agreement in the amount of 584,240 kWh with US Solar and 63,700 kWh with SolarStone. The size of both subscriptions are based on average annual electricity use of 2 Feldman, David, Galen Barbose, et al. 2015. ”Photovoltaic System Pricing Trends.” Golden, CO: National Renewable Energy Laboratory. 3 Ibid. 39