9. Discussion on subscription to community solar
Staff Report
Date of Meeting: May 2, 2018
To: City Council
From: Neil Soltis, Administrator
Re: Solar subscription
Background: The City has received information from US Solar regarding the opportunity to
subscribe to the production from one of their community solar farms. The extent of the City’s
subscription is determined by the City annual electrical usage. In terms of process the City would
pay US Solar on a monthly basis based on the subscribed production amount. Xcel Energy would
then provide the City with a credit in the amount of $0.01 / kWh over the amount paid to US Solar.
The proposal that follows indicates a net revenue of $1,278 in year 1 of the subscription.
While the cost savings are not significant, taking action to subscribe would support the City’s
resolution to work at its own pace toward implementing any GreenStep best practices that will
result in energy use reduction, economic savings, quality of life improvement, reduction in the City’s
greenhouse gas footprint, and recognition by the League of Minnesota Cities as a Step Two
GreenStep City
If this is something that the Council feels would be worthwhile, we can request that US Solar
provide a subscription agreement for consideration at the next City Council meeting.
PR O PR I ET AR Y AN D C O NF I D ENT I AL
B E YO N D T H E RO O F TO P
S U N S C R I P T I O N SM P R O P O S A L :
C I T Y O F S C A N D I A
April 20, 2018
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COVER LETTER
April 20, 2018
Neil Soltis, City Administrator
City of Scandia
14727 209th Street
Scandia, Mn 55073
Dear Neil,
Thank you for the opportunity to present this offsite solar and SunscriptionSM introduction to you and your
team. We at United States Solar Corporation (“US Solar”) are thrilled to help the City of Scandia lock in
the significant, long-term savings opportunity currently available under Minnesota’s Value of Solar
community solar program.
US Solar is a turnkey solar developer and owner/operator. We coordinate all project details –
development, permits, finance, construction, management, insurance, maintenance, and monitoring. The
enclosed proposal includes details about our company, our strategic alliance partners, and our
Sunscription proposal.
The US Solar team provides an unparalleled combination of broad experience and strong local roots. Our
team has a proven track record of building and financing distributed solar projects. US Solar’s principals
have developed and financed commercial solar projects and residential solar programs with a notional
value of over $1 billion. We ensure that each one of our solar projects is built to the highest capital
markets standards in order to maximize the savings available to our subscribers.
Please contact us with any questions, comments, or points of clarification. We look forward to working
with you.
Sincerely,
Reed Richerson - COO
United States Solar Corporation
100 N 6th St., Suite 218C
Minneapolis, MN 55403
W: (612) 260-2230 C: (916) 704.2720
E: reed.richerson@us-solar.com
This letter is intended solely as a basis for providing indicative pricing and terms and for engaging in further dis cussion. It does not
evidence any agreement to make an investment or any other binding commitment on the part of US Solar or any other party. Such
investment or other binding commitment will arise only upon the execution of definitive, binding agreements. Any subscriber
transaction would be contingent on prior credit review. US Solar requests that the recipient keep the terms of this letter confidential.
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SUNSCRIPTIO NSM
SunscriptionSM [suhn-skrip-shuhn] noun
1. a contract with US Solar designed to provide you with significant, long term savings
2. an opportunity to enjoy solar benefits without the planning and logistical hassles of an onsite solar project
3. a way to exercise your new right to choose an alternative energy partner
The Solar*Rewards Community program recently launched in Minnesota is the first scalable community
solar program in the US and has immediately established the country’s smartest solar regime. Schools,
towns, businesses, and nonprofits throughout the Xcel s ervice territory have embraced the opportunity to
fix costs for the long term by “subscribing” to a solar garden and benefitting from cost efficiencies of scale,
while also avoiding the siting, construction, and maintenance complexities of an onsite system.
US Solar’s ability to connect subscribers with solar projects located offsite allows us to develop projects of
the ideal scale at ideal sites, where we can optimize the orientation, spacing, and tilt of our solar modules
to deliver the most solar energy at the lowest cost.
Now, US Solar is offering the City of Scandia the opportunity to lock in savings for years to come with a
Sunscription Agreement.
HOW COMMUNITY SOLAR AND A SUNS CRIPTION WORK
• US Solar builds a local Solar Garden at an ideal offsite location.
• The Solar Garden produces energy that is delivered to Xcel.
• Xcel continues to deliver Subscriber all electricity required onsite .
• Xcel credits Subscriber’s bill for value of Solar Garden energy.
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EXISTING SUBSCRIBERS
School districts, cities, universities, businesses, and even residents have signed up with US Solar. As a
small team, we present a fair agreement to minimize back-and-forth in negotiating the terms. The
following public entities have signed up with our program.
School Districts
• Becker Schools
• Sartell-St. Stephen Schools
• Robbinsdale Schools
• Watertown-Mayer Public Schools
• Hopkins Schools
• Sibley East Schools
• Orono Schools
• Cannon Falls Area Schools
Other
• University of Minnesota
• Met Council Transit
• Met Council Enviro
Cities
• City of St. Cloud
• City of Annandale
• City of Rogers
• City of Robbinsdale
• City of Minneapolis
• City of Silver Lake
• City of Chanhassen
• City of Plato
• City of Shafer
• City of Lexington
• City of Spring Lake Park
• City of Birchwood Village
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HOW DO YOU SAVE MONEY?
We estimate the City of Scandia would gain a net value of $30,098 for no upfront cost.
By contracting for a Sunscription with US Solar, you can expect to save every year as the Bill Credit rate
that Xcel pays you will always remain $0.01 above your Sunscription rate with US Solar. Using numbers
provided from your previous US Solar proposal under the ARR program, the table below shows the
expected savings the City of Scandia will achieve based on a Sunscription sized to 127,771 kWh at a
starting bill credit rate of $0.1033 for both General Service and Small General Service.
With your Sunscription in place, Xcel will continue to deliver you all of your grid electricity, with no
interruption of service. For an example of how a Bill Credit will appear on your utility bill, please see the
following page.
Your Sunscription with US Solar supports the development of near by Solar Gardens and secures your
right to receive payments from Xcel for supporting local renewable energy. You can expect a Sunscription
to save you money simply because the Bill Credit rate you receive from Xcel will always be higher than
your Sunscription rate. The bill credit rate chart is listed below.
Year 1 2 3 4 5 6-10 11-15 16-20 21-25 TOTAL
127,771 127,132 126,496 125,864 125,235 616,843 601,576 586,686 572,165 3,009,767
0.1033$ 0.1057$ 0.1081$ 0.1106$ 0.1132$ 0.1213$ 0.1360$ 0.1525$ 0.1711$ 0.1370$
(0.0933)$ (0.0957)$ (0.0981)$ (0.1006)$ (0.1032)$ (0.1113)$ (0.1260)$ (0.1425)$ (0.1611)$ (0.1270)$
Net Value ($/kWh)0.0100$ 0.0100$ 0.0100$ 0.0100$ 0.0100$ 0.0100$ 0.0100$ 0.0100$ 0.0100$ 0.0100$
1,278$ 1,271$ 1,265$ 1,259$ 1,252$ 6,168$ 6,016$ 5,867$ 5,722$ 30,098$
US Solar Subscription Rate ($/kWh)
Net Value ($)
Subscribed Energy* (kWh)
VOS Xcel Bill Credit ($/kWh)
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EXAMPLE OF AN XCEL BILL
Xcel has provided Minnesota ratepayers with this example of a Bill Credit (note that it shows a
hypothetical subscriber that is a gas and power customer with Xcel’s Public Service of Colorado
subsidiary, not Northern States Power)
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INSIGHT INTO YOUR OF FSITE SOLAR GARDEN
Offsite solar solutions save you the logistical issues of planning, constructing and maintaining a solar
project on your property. However, we can provide you with the same ability to view and monitor the Solar
Garden, as you would expect from an onsite system.
US Solar is designing a customized platform for our Solar Garden subscribers, one of the first platforms
designed specifically to monitor community solar projects. Our online portal will not only provide
subscribers with performance information once systems are up and running, but it will also provide you
with status reports regarding project development and construction.
We can also provide you with a customized monitoring portals, allowing you to display information
regarding the Solar Garden performance – energy and environmental – on video monitors or kiosks
anywhere in the company. These customized portals can be tailored to inform and educate your
executives, employees and customers about the performance and benefits of the Solar Gardens you are
supporting.
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FREQUENTLY ASKED QUE STIONS
•A: Subscribing requires no upfront payment whatsoever.
Q: How much does it cost upfront?
•A: Your Sunscription is fully transferrable. You can allocate subscription capacity to a
new building of yours within Xcel Energy's service territory, or you can transfer it to
another eligible Xcel Energy customer.
Is my Sunscription transferrable?
•A: Our Solar Gardens can produce energy in all seasons and all weather. Solar Garden
output will vary from day-to-day and season-to-season, as does your electric usage.
Your Solar Garden SunscriptionSM will be sized to account for this variability and
designed to greatly reduce, or even eliminate, your utility bill over the course of each
year.
Q: What happens in the winter or when it’s rainy?
•A: Solar Garden energy is delivered directly to Xcel’s grid, not your facility. Our Solar
Gardens are simply one of the sources feeding the grid, and you will continue to receive
100% of your electricity from Xcel with no interruption of service.
Q: Will my facility be connected to the Solar Garden?
•A: Your historic, annual electricity usage determines the size of your Sunscription SM.
This is another advantage –our Solar Garden subscribers receive solar benefits that are
not limited by the size and/or quality of their roof.
Q: How will my Solar Garden subscription be sized?
•A: US Solar and its investor partners will receive the tax credit benefits for funding the
capital costs of each Solar Garden, lowering the SunscriptionSM rates we are able to
offer subscribers.
Q: Are there tax benefits?
•A: Once your assigned Solar Garden begins delivering energy to the grid, you receive
bill credits from Xcel Energy and a bill from US Solar for the same amount of kWh. We
will notify you as that date approaches and keep you updated along the way.
Q: When do I start seeing bill credit benefits?
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US SOLAR: EXPERIENCE AND QUALIFICATIONS
BROAD EXPERIENCE: THERE IS NO SUBSTITUTE
US Solar is a turnkey solar developer and owner/operator. We seek to make solar energy accessible with
simple, money-saving, long-term solutions that are as good for our partners as they are for the
environment. US Solar’s management team brings a wealth of solar leadership and expertise from the
commodities divisions of industry-leading firms such as Morgan Stanle y and Bear Stearns, as well as the
project development teams of BayWa R.E. and REC Solar.
Community solar development and finance requires a wide range of skills that few solar companies
possess. US Solar is uniquely positioned with deep experience in all facets of this market segment.
Additionally, US Solar draws on a unique set of strategic partnerships. US Solar’s platform is comprised
of best-in-class providers within engineering, procurement, and construction; solar equipment
manufacturing; energy management; legal services; development; and finance and investment.
Project Development: The US Solar team has extensive experience in solar project development. This,
along with support from our strategic alliance and partners, allows for the delivery of large -scale projects
– on time and within budget.
Community Solar: US Solar has broad experience in the siting, development, and subscription of
community solar projects in Minnesota. Our principals have worked with Fortune 500 companies,
municipalities, public and private schools, and utilities across the country. We have contracted with a
number of large counties, towns, school districts, and corporations in Minnesota for Solar Garden
subscriptions.
Project Finance: Less experienced solar providers frequently underestimate the challenge of financing
the construction and operation of a portfolio of solar projects. US Solar is currently developing and
financing over $150 million of projects in Minnesota, and the US Solar principals have raised project
capital for projects and programs with a notional value of over $1 billion.
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LEADERSHIP TEAM
The US Solar team is truly one of the most experienced teams in Minnesota. Our successful experiences
span across the utility-scale, commercial, and residential markets. At the intersection of successful
experiences and deep alliance partner relationships, US Solar is uniquely positioned to provide the City of
Scandia with the highest value. Furthermore, our Minneapolis office is comprised of professionals who
were raised in Minnesota, understand the community, and have been involved in Minnesota community
solar from the very beginning.
Martin Mobley – CEO: Marty started US Solar after forming and leading the Solar Desk at Morgan
Stanley Commodities, where he led the group into the US commercial market (~40MW from ~100
rooftop/ground mount/parking canopy projects), the US residential market (three separate US resid ential
financing programs) and the Ontario market (~30MW in from 75+ rooftop projects). Prior to Morgan
Stanley, Marty was an attorney at McDermott, Will & Emery in Washington, DC.
Robert Oden – EVP: As EVP, Rob oversees corporate reporting and manages contract administration for
US Solar's development assets and fleet of operational projects. Rob brings twenty years of experience in
energy and climate markets. He started his career in a principal investment group at Bear Stearns in New
York and Houston and was later in the New York Commercialization group at EcoSecurities, a leading
originator and trader of emission reduction credits. Rob has an AB from Harvard College.
Reed Richerson - COO: As COO of US Solar, Reed is responsible for the development, ori gination, and
construction of all our projects along with the daily management of the business. Reed brings 10+ years
of solar industry experience where he previously served as the VP of Sales and Business Development
for BayWa r.e. and held various roles for REC Solar. Reed has a BS in Applied Economics from the
University of Minnesota.
Brian Lantz - SVP, Finance: Brian brings over 10 years of solar industry financing experience to US
Solar. As the SVP of Finance, Brian is responsible for all aspects of capital raising and structuring
activities. After beginning his career at a renewable energy consulting firm, he held various positions at
SunEdison focusing on the distributed generation market segment where he closed debt and equity
financing on over $750 million of solar projects. He was a member of the core team that successfully
launched TerraForm Power's IPO and most recently served as the Director of Capital Markets and
Structured Finance at TerraForm prior to joining US Solar. Brian holds a ME in Sustainable Energy
Engineering from the University of Maryland, College Park, and a BS from James Madison University.
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NEXT STEPS
While this proposal may seem too good to be true, there is a catch - subscription demand tremendously
outweighs subscription capacity. We can provide a Sunscription Agreement to go over more specifics.
Please contact us with any questions, comments, or feedback you may have in response to this proposal
Thank you – we look forward to providing the City of Scandia with significant, long-term energy savings
through a Sunscription.
SIGN UP TODAY | US-SOLAR.COM
You’re on your way to a brighter tomorrow !