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REQUEST FOR COUNCIL ACTION Date: January 26, 2015 Item No.: 15.a Department Approval City Manager Approval Item Description: Discuss Solar Projects and Authorize Applications BACKGROUND 1 Over the past several months, City staff has conducted research, met with Clean Energy 2 Resource Teams (CERTs), met with solar energy installation companies and financing 3 organizations, and organized presentations to both the Public Works, Environment and 4 Transportation Commission (PWETC) and the City Council to discuss the feasibility of 5 installing solar panels on one or more of the City’s campus buildings. 6 There are several options available to the City for the installation of solar panels on City 7 facilities. The most cost effective option is the Made in Minnesota Solar Incentive Program 8 which involves rebates paid out annually over 10 years if the panels used are “made in 9 Minnesota.” The rebate amount is based on the amount of energy produced by the system. 10 Applications for this program are accepted through February 28, 2015. A lottery system is used 11 to select the successful applications. 12 Solar installations are currently feasible due to tax credit opportunities and rebate programs. 13 City staff provided energy use information from city hall, the maintenance building, the new fire 14 station and the Skating Center on the city campus to Sundial Energy and Newport Partners to 15 determine the feasibility of installations on these facilities. Their findings suggest a 40kw 16 installation on the City Hall building and the Fire Station is feasible. There is adequate area on 17 city hall and on the new fire station building for these installations. The systems are connected 18 to the building electrical panel and reduce the amount of electric energy purchased from Xcel. 19 They also feed power back onto Xcel’s grid if there is not enough demand from the facility to 20 use the solar generated power. 40kw is the maximum size installation under the Made in 21 Minnesota rebate program per metered facility. In order to take advantage of the tax credits 22 available, the city would enter into a guaranteed energy savings contract with the owner of the 23 installation. The installation would be turned over to the city after a defined number of years. 24 The current proposal would turn the installation over to the city after 6 years. These types of 25 guaranteed energy savings projects are allowed under State Statute 471.345 Subdivision 13 26 without following usual competitive bidding requirements. There are other requirements in the 27 statute that must be complied with for these projects. 28 Additional options include a direct purchase options whereby the City purchases a solar 29 installation financed with a loan through the St Paul Port Authority or other funds. In this case, 30 some upfront funding may or may not be required although this could also be offset by allowing 31 a private company to provide additional financing so that they may take advantage of tax credits. 32 Page 1 of 3