Earlier this month, Minnesota regulators made a decision that may finally allow community solar projects to move forward (for Xcel Energy customers) in the Land of 10,000 Lakes. However, the Public Utilities Commission decision also highlighted the shortcomings of the legislature’s distributed solar policy adopted in 2013.
But why, after a 2013 “solar session” at the Legislature, was the Public Utilities Commission forced to cobble together a compensation scheme for community solar gardens?
Basically, the Commission had to fulfill the legislative intent that community solar actually work, but saw that neither the value of solar nor the retail rate would be sufficient to cover the cost of financing a community solar project in Minnesota (yet, just wait a couple years). The legislative intent was clear, but the mechanism was left blank.
The original, not the adopted, legislation would have made the PUC’s work a lot easier.
The original bill would have set aside funds from a small fee on electricity bills to provide production-based incentives for individually-owned and community-based solar projects. The incentives would have served the same purpose as the solar renewable energy certificates adopted by the Commission, but would have been guaranteed over the long term and supported a wide array of distributed solar projects. Combined with the value of solar rate, the incentive pool would have ensured a robust solar market development and transparent separation between the cost of the energy and the publicly financed incentives.
The Commission’s decision in Minnesota will finally get some community solar projects built, but it highlights the limitations of what was otherwise a terrific suite of solar policies passed in 2013.
