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Home My WebLink About9.a. Approve letter of intent with Sundial Energy for a solar PV systemI�SEMOU T EXECUTIVE SUMMARY CITY COUNCIL City Council Regular Meeting: February 17, 2015 AGENDA ITEM: Approve letter of intent with Sundial AGENDA SECTION: Energy for a solar PV system New Business PREPARED BY: Dwight Johnson, City Administrator AGENDA NO. 9.a ATTACHMENTS: Letter of Intent, PowerPoint presentation APPROVED BY: ddj RECOMMENDED ACTION: Motion to approve the attached non-binding letter of intent to Sundial Energy for the supply and installation of one or more solar PV systems on City buildings. BACKGROUND In 2013, the Legislature approved HF 729 which provided new incentives for solar energy projects in the state. One part of the legislation provides for specific incentives for rooftop solar PV (photo -voltaic) systems. Cities, schools and other non -profits can leverage tax credits by working with a private provider/investor. Access to the incentive funding is through a State lottery system. The City can submit more than one rooftop site for consideration. Sundial Energy has approached the City with a proposal to submit one or more solar PV panels on City buildings to the State lottery. The City is not required to put up any money to invest in the system and would be guaranteed a 20% reduction in the electric bill for any outfitted building. The current annual electric bill for City Hall is about $35,000. The City spends a total of about $77,000 per year for electricity at its various buildings. DISCUSSION The letter of intent is non-binding at this point because Sundial Energy needs to look at our building, energy bills and other data more closely before submitting an application on our behalf. For the City, we want to make sure that our new City Hall roof will not be damaged and also see the final contract documentation. The lottery odds depend on the number of applications, but in 2014 about half were selected. The state's pool of money is $15,000,000 per year, but is subdivided into residential and commercial applications with several sub -categories of each. Several other cities have entered into similar agreements with Sundial Energy, with the closest being Cottage Grove. Although the Cottage Grove installation is not yet complete, they have not indicated any problems with the program so far. Buildings that may be candidates for inclusion in the program include City Hall, public works, and the Community Center. We are gathering information about the fire stations. RECOMMENDATION Based upon no upfront investment needed, and a return equal to 20% of our electric bill for each building, staff recommends approving the non-binding letter of intent to proceed with the applications to the State. Final contracts, if the lottery results are favorable, will come back for Council approval. Sundial Solar A BriO,khter Idea new opportunity for Minnesota cities la 'es Initiative (SCI) I �luult�+�!r oil 11111111 1111111 uu Jill Ull fill lm li111 IN ,gid_ F. 1 The new law provides for several incentives: * Raises the net meter cap to 1MW. * Establishes a value of solar rate. * Systems over 100kW will receive solar credits. * Allows for third party ownership. 1 $12.00 $10.00 Blended Average System Price $4.00 $2.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1 -Q3 2012 LBNL "Tracking the Sun IV" ■ SEIA/GTM Research The Result: Sundial has the ability to install rooftop PV arrays for less than ever before. ✓ Guaranteed energy savings ✓ Greatly reduced energy costs for 25+ years ✓ Hedge against ever -rising electric rates ✓ Promote clean energy/ Improve our environment ✓ Create local jobs ✓ Contribute to solar research Solar Cities Initiative (SCI) g � led,% s : •�,.,, '- a .. -w... By partnering with Sundial Solar Energy • 15 years of solar experience • Over 100 installations in Minnesota How the Solar Cities Initiative (SCI) started- • Cities want solar but can't get federal rebates. • Since 2010 Sundial has tested and refined our unique approach for nonprofits and municipal governments. - '-rd"ron, MIV New solar legislation - • Ability to aggregate multiple projects =reduce costs • SCI allows cities to realize benefits of Federal ITC • Provides for 3rd party ownership How it works — ➢ No obligation "test drive" for 6 or 10 years, or long term Power Purchase Agreement with buy out or renewal options ➢ Multiple cities with several sites - program size of 2-3MW in 2 years ➢ Sundial installs, owns, and maintains systems ➢ Guaranteed Energy Savings contract ➢ No money down ➢ Free energy from start Potential Solar Sites IL4. • IL City of Bloorrington etonka City Ha "WC Scientific benefits of SCI - A • Every solar site is different • Each has a unique performance curve iter Police Thank You! contact: Art Crowell 612-685-5834 Sundial Solar