Community solar is a remarkable Minnesota success story, giving tens of thousands of electricity customers new and better access to clean, affordable solar power. With a community solar option, customers who cannot benefit from rooftop solar, for example those who rent, have a shaded roof, or lack upfront capital, can still go solar, giving them the power to control how their electricity is generated and manage their electricity costs. And more than 11,000 households in Minnesota, along with schools, non-profits and commercial customers have done just that. Like everything in Minnesota, it is well above average.
It’s time to build on this success and reboot the program to expand the universe of beneficiaries, and that’s what a new bill authored by State Representative Jamie Long aims to do. First, the bill would make this program accessible to low- and moderate-income customers who have the greatest need for affordable energy options, but have largely been unable to participate in the Minnesota community solar marketplace. And second, the bill would expand the economic development benefits of the program to rural areas outside the area bordering the Twin Cities, so that more farmers across the state can bolster their farm revenue with solar lease payment.
First, a quick summary of how the program works now. A solar developer builds a solar project. Customers can subscribe to a portion of the project, but no one customer can claim more than 40% of the project’s total capacity. Subscribers receive bill credits for each unit of electricity produced by the solar array, equal to an amount set by the Minnesota Public Utilities Commission which reflects the value of that power. Recently, the Commission approved a small adder for residential subscribers.
The good news: This program has spurred the development of hundreds of solar projects serving tens of thousands of customers. As of this January, there were 149 projects in operation, another 146 projects in the construction phase, and another 174 in the application and study phase. This program is the main driver behind the growth of jobs in the Minnesota solar industry, which currently boasts more than 4600 employees.
Even more exciting, the program has been flexible enough to accommodate a diversity of projects. In fact, under this program we have even seen development of smaller, community-owned projects that allow neighbors to work together to build their own solar resource, creating value in their neighborhoods, creating local jobs, and capturing the bill savings.
But six years after lawmakers passed authorization for this program, a reboot is warranted to set the program up for even more success. To date, the program has not provided sufficient access for low- and moderate-income Minnesotans. These households are the ones who spend the highest portion of their income on energy, and often they are caught in a cycle where lack of capital blocks access to solutions that can help them manage their costs and climb out of poverty. This program can open the doors to better financial health for financially stressed households, while also creating jobs and economic development in economically disadvantaged neighborhoods.
In addition, the program unfairly tilts the playing field towards siting community solar projects in counties surrounding the Twin Cities metro area. This blocks development in more rural counties, where supplementing farm revenue with solar lease payments can help family farmers stay afloat. Lifting this arbitrary restriction would spur rural development across Xcel’s Minnesota service territory, including in border counties that are effectively barred from participation today.
Xcel Energy, Minnesota’s largest utility, has argued for scaling back or even repealing Minnesota’s community solar program, arguing that it can supply utility-scale solar power at a lower cost to ratepayers. In fact, Xcel can aggressively deploy very low-cost utility-scale renewables to help meet its carbon emission reduction targets and we hope that later this year they will propose doing just that.
But to use this as a reason to scale back community solar is counterproductive, and Xcel’s arguments have been thoroughly debunked over years of proceedings in which regulators set the price Xcel pays for community solar to reflect the unique value of the energy created by these smaller, more distributed projects.
Xcel should stop positioning itself as a barrier to customers accessing their own solar solutions. With 89% of Americans saying they want solar, the job of our utilities is to provide opportunities for their customers to access this resource, not to create roadblocks. Xcel and all the participants should be proud of this landmark Minnesota program, which has been innovative and nation-leading. Let’s keep building on that foundation.