Community Solar FAQ
Looking for the details on what a Community Solar Garden is? You’re in the right place!
CEF has provided some core Frequently Asked Questions on what a community solar garden is. You can also check out the MN Clean Energy Resource Teams website, which has a lot of great resources explaining community solar: http://www.cleanenergyresourceteams.org/solargardens
Xcel Energy also provides an FAQ that covers how their administration of the program and the bill credits work – residential and small commercial customers will find pages 1-3 most relevant.
- What Is a Community Solar Garden?
- Is there really enough sun in Minnesota for solar to work?
- Why is a Community Solar Garden helpful?
- Who can subscribe?
- What does subscribing mean? What do you get from subscribing?
- How will the credits show up on my bill if I have Averaged Monthly Payment?
- What are the options for subscribing, what do they cost, and what will we save?
- What if I move? What happens to my subscription?
- How is this benefiting the community?
- How do we know the community is getting the benefit?
- What’s special about how Cooperative Energy Futures does community solar?
- What are the terms of a Cooperative Energy Futures subscription agreement?
- Start the process of subscribing now
A Community Solar Garden is a large array of solar panels (photo-voltaic) that generate electricity from sunlight and is run so that many people in a community can subscribe to get their electricity from the solar garden. Like a community garden in which each person has a plot, each person (called a subscriber) in a solar garden gets to use the electricity from their part of the solar garden. The energy is credited to subscriber’s electric bills, so subscribers do not need to be physically located next to the solar garden. There are different ways to structure subscription prices, but the cost of subscribing is usually less than the money saved on energy bills (this is definitely true in the Shiloh project). Unlike the coal, nuclear, gas, and oil that produce most of the energy we use, solar energy is pollution free
Yes, there is already enough solar installed in Minnesota to power thousands of homes. Minnesota gets more sun per year than many parts of the country, including some areas of Texas and the Northeast where there is already much more solar installed. Minnesota also gets more sun per year than Germany, which has one of the largest solar industries on earth. While the short days in the winter mean we get less winter power than many other areas, the long summer days more than compensate for it. Solar electricity is created by light, not heat, so cold, clear days in the winter generate plenty of electricity. The reasons you don’t see solar everywhere already are political and about how our energy companies operate, not the amount of sun.
Many people in our community face high energy bills, asthma, and unemployment. Solar can cut energy costs and air pollution while creating local jobs. However, many people can’t put up solar on their own homes because they rent, have a shaded home, or can’t afford it. Community Solar Gardens (CSG) make solar affordable by building a large solar array on a sunny roof or open area, reducing the cost for each subscriber. CSGs can also make solar available to anyone who pays an electric bill by allowing renters, homeowners, businesses, and organizations to subscribe for solar power that is not located on their home.
To subscribe, you need to:
- Live in the same or adjacent county as the solar garden. You do not need to live adjacent to the solar garden, or even nearby.
- Pay an electricity bill to Xcel Energy, the utility that is required by state law to provide bill credits. Renters, homeowners, businesses, non-profits, and local government entities like schools or park buildings can all participate if they pay an electric bill. If your landlord pays the electric bill, you can get them to subscribe for you.
You can subscribe for the energy from part of the solar array. A minimum subscription is 200 watts, enough to power 2 100-W incandescent light-bulbs or. The largest subscription you can get is enough solar to provide 120% of your every use – and no one subscriber can have more than 40% of the whole project. The average Minneapolis household needs 3-5 kilo-watts of solar to cover their full energy usage.
Xcel Energy is required to give a bill credit to anyone who subscribes to for the power produced by their portion of the array. You’ll get a credit on your electric bill for whatever amount of solar you subscribe to. The monthly credit will depend on the amount of sunlight – usually production is highest in June and lowest in December. If you subscribe for your full use, you will on average zero out your bill! The amount of credit you will get on your bill per kilowatt-hour produced by your part of the solar array is slightly higher than the amount you pay per kilowatt-hour ($0.03/kWh more if you subscribe to an array under 250kW, $0.02/kWh more if you subscribe to a larger array). The 2017 bill credit rates for a larger array (a smaller array would be $0.01/kWh more) are:
- $0.15331/kWh for residential
- $0.14798/kWh for small businesses (not demand metered)
- $0.12296/kWh for large businesses (demand metered)
The bill credit you receive will increase to match any increases in electricity costs, so you will be protecting yourself from rising energy costs.
Some Xcel Energy Customers choose to pay the same amount every month based on their historical average under the Averaged Monthly Payment (AMP) program. In early 2017, Xcel clarified that community solar garden bill credits would not be applied to AMP monthly payments immediately, because the monthly payments are calculated based on the previous year’s usage, whereas community solar bill credits only affect current usage (which will be used to calculate average monthly payments next year). Unfortunately, this means that customers on the AMP plan will likely not see any subscription benefits during the first year of their subscription unless Xcel decided (at their discretion) to adjust average monthly bills downward based on lower usage before the year is over. This would mean that during the first year, a subscriber on the AMP plan would pay their normal average monthly Xcel bill AND their CEF subscription payments, but would not see any bill credits until the end of the first year, a substantial temporary increase in energy costs. In year 2, the much lower net usage should result in near-zero averaged monthly payments. For more details on this issue, review Xcel’s response on this issue on page 2 of their subscriber FAQ.
CEF recommends that any subscribers who are on Xcel’s averaged monthly payment plan end their usage of AMP during the first year they are a community solar subscriber to better match their energy payments and their subscription savings. It currently looks like it would be safe to re-enroll in the AMP plan for years 2-25 of the community solar garden subscription once the average monthly payment to Xcel has dropped substantially after accounting for the bill credits in year 1.
There are two options for subscribing:
- Subscribe pay-as-you-go: In this option, you sign up for a certain portion of the solar garden and pay monthly for the actual energy produced by that amount of the solar garden. The subscription payment offset by your bill credits will start off creating a savings of roughly 6% in year 1, and the savings will increase each year. The average savings on energy costs over the 25 year project life is over 20%, and by the end of the project life, the annual savings will have reached over 40% of your electric costs.
- Subscribe upfront: In this scenario you pay one-time for your subscription. The amount you pay upfront will depend on your subscription size, but in general it is about the cost of 10-12 years of your power consumption – for an average home, around $8,000-$15,000. This cost is roughly 50% of what it would cost to install an equivalent solar array on your own home. Once you are subscribed, you will get energy for 25 years without making monthly payments (there is an annual fee of $6/200 W subscription/year. This option is basically like pre-buying 25 years or energy for the price of 10-12 years of energy – and you save much more over the long-run than when subscribing pay-as-you go.
In both cases, subscribing reduces your energy costs, and protects you from Xcel Energy prices that have been rising 4.6% every year for the past decade. The pay-as-you-go model delivers less savings overall but spreads it out so you don’t need to pay anything upfront. The upfront model delivers more savings overall, but requires a large initial investment.
One of the benefits of community solar is that you don’t lose your value if you move. If the location you move to is still eligible (served by Xcel and in the same or a neighboring county as your solar garden), you can take your subscription with you and apply it to your electric bill at the new address. If you leave the area and are no longer eligible, you can transfer your subscription to someone else or the co-op can do it for you.
Community solar gardens reduce energy costs for about participating households, keeping more of our energy dollars in the community. In addition, CEF employs local residents to build and maintain community solar gardens, including providing low-income people and people of color with on-the-job training to be able to install more solar arrays in the future. The project will also reduce dependency on dirty energy. Dirty energy is the leading cause of asthma and several other health threats and fuels climate change, which causes heat waves and severe storms that damage our communities and health.
Unlike many other developers, our community solar gardens will be developed, owned, and operated by a democratically controlled member-owned business, Cooperative Energy Futures. Everyone who subscribes will become a member of Cooperative Energy Futures. Members control the organization by voting and running for the Board of Directors and can set the direction for the organization by participating in optional member meetings. It is a democratic organization governed by 1-member, 1-vote. As a cooperative, members also share in the profits the co-op generates – at the end of each year, all profits are either reinvested in other programs to help members save energy, own renewable energy together, and cut energy costs or are distributed directly back to members.
Currently, the energy dollars we pay on our utility bills make money for someone else by paying them to invest in energy sources that are causing problems for our community. Through a cooperative community solar garden, we use our energy dollars create community solutions that make money together.
Interested in subscribing to our first gardens?
To review the currently open gardens and start the process in one you are eligible before, visit our subscribe page!