Smart Solar Legislation Helps Minnesota Lead In The Midwest

A map highlighting the Solar Energy Industries Association’s top solar states by capacity seems to forget the middle of the country. But it’s true: The Midwest trails other parts of the country largely because the region didn’t keep moving forward with solar policy. Instead, policy became stagnant or even regressive. There is a bright spot, however: Minnesota is lighting the path for solar in the Midwest.

With the passage of the Solar Energy Jobs Act in May 2013, Minnesota is projected to install approximately 400 MW of solar in the next decade. The Solar Energy Jobs Act has several key provisions that are poised to power Minnesota’s solar industry.

A prominent aspect of the law requires investor-owned utilities to source 1.5% of electricity from solar, in addition to the state’s existing RPS requiring 25% renewable energy by 2025. This 1.5% mandate on investor-owned utilities is expected to bring an additional 400 MW of solar online, adding to the existing 13 MW today. One fault critics find with the bill is its exemption of rural electrical co-ops and municipal utilities. Of the 1.5% mandate, at least 10% of that production is required to be from small systems of up to 20 kW.

The law also says that small distributed-generation systems may be subject to performance-based incentives instead of flat rebates. Performance-based incentives already apply to the Made in Minnesota rebate for systems that use solar modules manufactured in Minnesota. The Made in Minnesota incentives are 10-year performance-based incentives with funding of $15 million per year for 2014 to 2023. A Made in Minnesota Rebate program is available for solar thermal systems, too, thought it’s capped at $250,000 annually.

The Wright Hennepin Community Solar Array in Rockford, Minn. Photo courtesy of Wright Hennepin Electric Co-Op.

The Wright Hennepin Community Solar Array in Rockford, Minn. Photo courtesy of Wright Hennepin Electric Co-Op.

The Minnesota solar legislation also creates community solar gardens. Community solar lets customers purchase part of a solar system remotely located. Community solar brings solar to consumers who don’t have the ability or location to install solar themselves. Xcel Energy, Minnesota’s largest utility and the only utility required to participate in the gardens, filed its community solar plan in 2013.

While other utilities are not required to participate in the solar gardens program, several have created their own community systems. Wright-Hennepin Electric Cooperative commissioned a 32.5-kW community solar array in September 2013. According to a presentation at the Solar Powering Minnesota Conference from Mark Rathbun of Great River Energy, the cost to customers purchasing part of the community solar array was $4.83/watt, including battery storage.

Other utilities in Minnesota are listening to their customers and members and installing solar. Lake Region Electric Cooperative (LREC) surveyed their members and found that 1,500 of them were interested in community solar. In late 2013, LREC installed a 39-kW array on its Pelican Rapids campus. As of February, the community solar array was over half sold and LREC estimated the array would reach grid parity in its sixth year.

Across the country, utilities have argued that paying retail rate through net metering is an unfair subsidy to customers who have installed solar. One utility representative even called net metering “reverse Robin Hood,” where the solar generator robs from the rest of the utilities’ customers. In March, the Minnesota Public Utilities Commission approved a formula for the value of solar, making Minnesota the first state in the nation to set a value for solar. Investor-owned utilities in Minnesota will now have the choice between paying for excess solar generation using the value of solar formula or retail rate.

 By: Doug Stingle / Development Director / Midwest Renewable Energy Association

 

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