After a month’s consideration, the Northfield City Council Tuesday agreed to the city’s first solar subscription.
The agreement with Minnesota Community Solar is for 25 years and 1.5 megawatts of power per year. The flat rate option chosen by city staff and agreed to by the council, could save up to $2.3 million after all is said and done. The flat rate option, while potentially reaping the highest rewards, is also considered the most risky. The amount saved by the city is affected by whether Xcel Energy rates rise in future years, and by how much.
The more those Xcel rates rise, the more the city is saving by paying the flat rate to Minnesota Community Solar.
A community solar garden is a centralized, shared project connected to the energy grid with multiple subscribers. Subscribers to community solar gardens receive a tax credit on their Xcel Energy electric bill, thanks to state legislation in 2013, which directed the utility to create a program for the gardens.
As a subscriber of a solar garden, the city of Northfield would not directly use the electricity produced by the panels. The energy goes into Xcel’s power grid. The purpose of subscriptions is to pay for the construction and operation of the gardens. The more entities subscribing, the more gardens that can be produced and the more energy created through solar.
Minnesota Community Solar is building a 5 megawatt garden in Steele County. Northfield is allowed, by state law, to subscribe to 40 percent of that garden, or about 2 megawatts (the approved agreement is for 1.5 megawatts). Since the city of Northfield uses 5.5 megawatts worth of energy each year, it would require several subscriptions for its solar investment to match its total energy output.
Staff said in a memo that it intends to consider further subscriptions going forward. There are already offers on the table from ReneSola and Innovative Power Systems for the city to subscribe to gardens in nearby counties. However, staff wanted more time to vet those proposals.
The vote to approve the agreement with Minnesota Community Solar was 4-2. Councillor Greg Colby was absent and councilors David DeLong and Brad Ness voted against. Both said they’re interested in the city investing in solar, but DeLong felt it wasn’t necessary to make the decision with such immediacy, and Ness said he was concerned with a 25-year commitment.
Other councilors, though, expressed the benefits seemed clear, and the vote passed. Northfield staff will start working with Community Solar representatives to develop a formal contract, which the council will also need to approve. Through this agreement, Community Solar staff said the city could equal the reduction of the emissions of 371 passenger vehicles driven for one year or the electricity use of 259 homes in one year.
In all three meetings the council discussed the solar subscription possibility, several residents used the public comment section to voice their approval. Members of the Northfield Environmental Quality Commission, local nonprofit climate action groups and other community members spoke of what they believed to be obvious benefits of the subscription program.
If the city decides it wants to opt out of the expected 25-year contract with Minnesota Community Solar, it might need to pay a multi-million-dollar fee. However, it can also transfer its subscription for only a $5,000 fee, assuming Community Solar can find a replacement.