It’s been one year since Xcel Energy launched its community solar program, receiving hundreds of proposals for solar gardens in the first week. As the lead architect of the bill that created the program, Fresh Energy is excited about community solar because it allows individuals and organizations to benefit from the advantages of solar — no fuel cost, no moving parts, no emissions, and falling installation costs — regardless of whether or not they have a solar-friendly roof. This is especially important for customers living in apartments and businesses without their own roof. Typically, community solar arrays are built on the periphery of cities and towns where inexpensive or marginal lands and connection to the electrical distribution grid are most cost effective. Individuals, organizations, and businesses then “subscribe” to the solar sites and receive a credit on their electricity bill for the electricity the solar arrays generate.
What’s happened since then?
As more customers learned about community solar, interest grew from individuals, low income nonprofits, colleges, public agencies, rural cities, businesses, and churches. As Louise Seeba, General Counsel of the St Paul Public Housing Agency that is pursuing a community solar subscription, told Midwest Energy News, “Our sole mission is promoting affordable, safe homes for people and that money we’re not spending for energy we can put toward our mission. But even if it were zero savings we think it’s right thing to do for the environment…it’s a win-win.”
As community solar proposals continued to come in, applications bottlenecked with Xcel, frustrating developers working on the projects and customers who were eager to utilize a solar option in their communities. To date, with more than 1500 applications currently in the system, only one small 40 kilowatt community solar garden is in operation – enough to supply electricity for about five to seven households. After months of working at the Public Utilities Commission to get the program rules right, we’ve seen things improve slightly. There are now 46 applications (totaling roughly 43 megawatts) that have signed agreements with Xcel to begin construction and 800 applications at 175 project sites that are currently somewhere in the process of being reviewed for interconnection to the electric grid. However, this pace is still far behind the timelines in the state interconnection standard that governs Xcel’s processing of distribution generation requests.
Where do we go from here?
Work on those 800 or so applications is so critical not only because community solar provides such great value as local clean energy, but also because there isn’t much time to get these projects completed.
According to a recent story in Midwest Energy News:
Xcel Energy believes their Minnesota community solar garden program will approve projects totaling “north of 250 megawatts” by the end of next year. “I view that [250 MW] as my floor,” [Lee Gabler, senior director of customer strategy and solutions] said.
We agree that anything less than 250 MW would be a huge missed opportunity. If gardens aren’t operating by the end of 2016, they won’t be eligible for the current 30 percent federal tax credit – drastically altering the financing of the project and the prices for customers.
The next key step for the community solar program is this coming April, when the Public Utilities Commission will invite public comments on proposed changes for future community solar garden project applications. Fresh Energy is working to ensure that new rules:
1) increase access to low and moderate income customers
Unfortunately, with the retroactive changes to Xcel’s community solar program, the decrease in the number of available projects and the delay may result in less capacity available for low to moderate income customers. Through Fresh Energy’s work with affordable housing providers and other community groups, we know that there is unmet demand for solar from low income communities and residents. Building from our research, Fresh Energy is convening stakeholders to develop concrete recommendations on increasing access to community solar for the Public Utilities Commission to consider in 2016.
In 2014 the Public Utilities Commission approved Minnesota’s landmark Value of Solar methodology. The methodology, an outcome of the 2013 Solar Energy Legislation, fairly quantifies the value that distributed solar energy systems, like community solar gardens, provide to all utility customers. Unlike the current rates that fluctuate annually, the Value of Solar locks in the rates solar garden customers can receive, providing stability to customer bills and to the program as a whole.
Xcel Energy, the Commission, and Minnesota stakeholders have two years of experience with Xcel’s value of solar calculations. Will the Commission decide that the Value of Solar is ready for use in 2016?
3) get the grid rules right
Customers and solar developers alike agree that Minnesota’s 11 year old distributed generation interconnection standards are outdated. Inadequate interconnection standards increase transaction costs and waste resources for solar projects that gain momentum only to stall out at the point where interconnection approval is required. For example, when Xcel’s community solar program opened, interconnection information that would streamline the process considerably by guiding developers in siting and sizing projects was unavailable. The next set of solar gardens and other distributed generation require a modern interconnection system, which exists or is being pursued in a number of other Midwest states.
4) are consistent and clear for customers and businesses
Uncertainty surrounding the program in 2015 and the retroactive changes made to the program caused significant delays to projects trying to reach residential customers. With the Federal Investment Tax Credit set to decline at the end of 2016, these delays may mean that projects that would have made that deadline will now be abandoned. A healthy state solar industry and the customers it serves need consistent community solar program rules that will lead to sustainable development in 2017 and beyond.
Making solar work for all Minnesotans
Xcel’s customers have waited over two-and-a-half years since the original legislation passed to access community solar. Over the past year Xcel, solar businesses, and stakeholders like Fresh Energy have learned from the program’s delays. A key priority for the next year needs to be incorporating these lessons into the program rules moving forward in order to avoid further delays and create solar options for all.
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