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Community Choice Aggregation Feasibility Analysis Alameda County and$80/MWh for geothermal.24 We used these prices as the starting point for our forecast of CCA renewable energy procurement costs. For geothermal, which is a relatively mature technology, we assumed that new contract prices would simply escalate with inflation. Solar and wind prices are a function of technology costs,which have generally been declining over time; financing costs, which have been very low in recent years; and tax incentives, which significantly reduce project costs, but phase out over time. In the near-term we would not expect prices to increase as technology costs and continued tax incentives provide downward pressure and likely offset any increase in financing costs or other competitive pressure from an increasing demand for renewable energy in California. Thus we have held solar and wind prices constant in nominal dollars through 2020. Beyond 2020, with increasing competitive pressure associated with the drive to a 50%RPS and the anticipated phase-out of federal tax incentives (offset in part by continued declining technology costs), we would expect prices to increase somewhat and have assumed they escalate at the rate of inflation. In addition to this base case price outlook, we also consider a high solar cost scenario based on work performed by Lawrence Berkeley Laboratory on the value of tax incentives. In the high scenario we assume that costs increase with the phase-out of federal tax incentives, without being offset by declining technology costs. Figure 11 shows the resulting solar price forecasts for the two scenarios. Figure 11. Solar Price Forecast Reported Forecasted Solar Prices Solar Prices 80 High Cost Scenario $70.98/MWh 70 60 50 $48.50/MWh Base Case 40 Scenario $55.44/MWh 30 20 10 0 y � 'L 0 .:>1* 01 010 01 61' O1 O1' 01 O1 O61 '610› 1. 1. 'L 1, 1, 1. 1• L L 24 MRW relied exclusively on prices from municipal utilities and CCAs because investor-owned utility contract prices from this period are not yet public.We included all reported wind and solar power purchase agreements, excluding local builds(which generally come at a price premium),as reported in California Energy Markets,an independent news service from Energy Newsdata,from January 2015-January 2016(see issues dated July 31, August 14,October 16,October 30,2015,and January 15,2016). July,2016 10 MRW&Associates,LLC