On November 3, 2022, the Minnesota Public Utilities Commission approved the implementation of a new and innovative Cost Share Program for Xcel Energy customers who want to connect solar or other distributed energy projects to the grid (Docket #18-714). The Cost Share Program evolved from a plan that was advanced by Fresh Energy and our partners at All Energy Solar and TruNorth Solar in 2021 and Fresh Energy has been actively engaged in this and related dockets over the past year.
Fresh Energy applauds the Commission for its decision to approve the Cost Share Program and new modifications that balance the interests of Xcel’s distributed energy resource (DER) customers and other rate payers. We also applaud Commissioner Schuerger for his attention and prioritization of this critical issue.
“The cost of interconnection upgrades has been a big pain point over the years for Xcel Energy customers who install solar but then experience significant surprise costs to connect to the grid,” said Isabel Ricker, director, clean electricity at Fresh Energy. “This new cost-sharing approach will ease the interconnection cost burden for customers, and will particularly benefit under-resourced customers who may not have been able to consider solar in the past due to these costs.”
Today, most small solar projects connecting to Xcel’s system do not require grid upgrades, but in the case upgrades are required, the average cost per project is about $3,600. The newly approved Cost Share Program, for which customers will be eligible starting January 3, 2023, will require customers with projects up to 40 kW to pay a single fee of $200, which will cover all upgrade costs up to $15,000 per project. Additionally, under-resourced or “low-income” customers as designated by the utility, will be explicitly exempted from paying this fee.
With the passage of the Inflation Reduction Act (IRA) and additional federal funding for solar, Fresh Energy anticipates more residential and business customers within Xcel Energy’s service territory will install solar and this Cost Sharing Program will help to reduce the financial uncertainty of the infrastructure upgrades needed to connect to the grid.
This decision is a big step forward in solving one of the major interconnection issues facing Xcel Energy customers, and Fresh Energy is looking forward to continuing to work with the Commission, Xcel Energy, and solar installers on this docket and other interconnection issues in Docket #16-521 including timeliness and customer service.