Making sense of your clean energy options

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Clean energy has never been cheaper or more plentiful, and we are lucky here in Minnesota to have many excellent renewable options. Ever wondered what the difference is between community solar and a utility-offered renewable energy program? Here is Fresh Energy’s simple break-down of the main ways you can cover 100% of your electricity usage with clean energy.

All of these options are great ways to speed Minnesota’s clean energy transition and support the growth of renewable energy. Fresh Energy has helped shape and drive policies in all of these areas—and we will continue to push for bigger, better and more inclusive policies to get us all to 100% clean energy as quickly as possible.

First things first: Don’t forget energy efficiency

The kilowatt hour you don’t use is always the cleanest and cheapest —and these improvements are often straight-forward and greatly improve the comfort of your living space. There are dozens of actions homeowners, and even apartment dwellers, can take to improve their well-being while inside, reduce energy consumption, and save money. A great way to start is a home energy audit which will point you toward the highest-impact efficiency measures for your home.

Check out the Department of Commerce’s clean energy resources and their Home Energy Guide.

Much depends on which electric utility serves your home or business

The options for buying clean energy or producing it yourself can differ substantially depending on your utility. For example, all Minnesota utilities must allow customers to install solar (within technical bounds) and must provide net metering, which compensates customers for the power they produce at the same rate they pay for electricity. However, cooperative and municipal utilities can charge additional fees to net metered customers, and many cooperative utilities do charge solar customers extra. The fees should be reasonable and based in actual costs incurred, but this is often not the case. Fresh Energy has covered this issue in-depth on our blog. If you are interested in solar, be sure to check with your utility about their net metering policy and possible solar fees.

It can also be helpful context to consider how much of your electricity supply is already renewable or carbon free. Minnesota electric utilities are required under the state’s renewable energy standard (RES) to provide a portion of electricity from renewable sources. Most utilities are required to provide at least 25% renewable energy by 2025, and Xcel Energy is required to provide at least 30% renewable energy by 2020. All utilities are on track to meet, or have already surpassed, their RES requirements. Fresh Energy is part of a large coalition of Minnesotans working to update Minnesota’s requirements to 100% carbon-free electricity, which you can read more about here.

Three utilities—Minnesota Power, Otter Tail Power, and Xcel Energy—are also required to generate or purchase 1.5% of their electricity from solar energy by 2020. 10% of this solar energy standard (SES) must be met by small solar facilities like rooftop and backyard solar arrays. Putting solar on your roof can help your utility meet this policy goal.

Option one: Rooftop (or distributed) solar

Lots of Minnesotans, like people across the country, are excited about the opportunity to put solar panels on their homes or businesses. Earlier this year, the U.S. surpassed two million solar installations! On-site rooftop or ground-mounted solar arrays (often simply called distributed solar) can cover most or all of your electricity use and can be a very good investment depending on your property—systems generally pay for themselves within 8 – 10 years following installation.

Minnesota’s electric utilities must compensate or credit solar customers for the power their panels produce. For rooftop and small solar arrays, this typically happens through net metering. Some utilities also offer incentives for solar projects; for example, Xcel’s Solar*Rewards program and Minnesota Power’s Solar Sense program provide a production incentive for each kilowatt hour of solar production for 10 years.

If you are interested in putting solar on your property, the first steps are to better understand the project options, the likely cost and financial return, and then get quotes from two or three installers in your area. The economics of distributed solar can vary significantly by utility, especially if you are served by a cooperative or municipal utility that imposes a fee on solar customers (which some, but not all, do). Contact your utility to find out how solar customers are billed.

Other helpful resources include Minnesota Clean Energy Resource Teams (CERTs), a public-private partnership that provides educational programs and technical expertise to communities across the state. Solar United Neighbors of Minnesota is a nonprofit that provides solar education and helps homeowners through the installation process. And for a list of installers, you can check out the Minnesota Solar Energy Industry Association’s list of residential specialists.

Option two: Community solar garden subscription

Community solar is another great option if you’d like to offset your electricity usage with clean energy and support solar projects in your area. Programs allow you to subscribe to a portion of a community solar garden and receive credits for that power on your electric bill. Signing up for community solar is quite simple and can provide savings, though cost will vary by utility, project, and customer type.

Xcel’s Solar*Rewards Community program in Minnesota is the largest community solar program in the country, with over 225 active gardens. Many other utilities, including Minnesota Power, electric cooperatives, and municipal utilities have community solar programs too, though these are typically small. CERTs provides a handy how-to guide and map of community solar programs across the state.

Community solar subscriptions can vary, so it is important to understand the contract terms—pricing over time, payment deadlines, contract length, termination clauses, and more—before you sign up. Fresh Energy’s consumer-friendly community solar pledge lays out guidelines and things to look for in a good community solar contract. 

Option three: Green tariff (utility-offered program)

Green tariffs are utility programs that allow customers to choose clean energy instead of the utility’s standard fuel mix. Subscribing to a green tariff can help bring more wind and solar power onto your utility’s system. These programs are the simplest way to buy clean power and are very popular, with more than 60,000 customers in Minnesota on a green tariff. 

Some programs are tied to a specific set of wind or solar projects, and others simply procure renewable energy credits (RECs) to cover subscriber usage. RECs represent ownership of the “renewable” quality of electricity and are sold separately from the power itself. Fresh Energy recommends choosing a green tariff program that directly adds new wind and solar to the utility’s system if your utility has this type of program, but a REC-based program is worth considering if that’s all your utility offers.

REC-based programs always cost a bit more than default electric service because they charge the standard rate plus the cost of RECs. Other green tariffs charge for the cost of wind and solar power plus program administration, while ensuring costs from the rest of the electric system are not shifted onto other customers who aren’t subscribing to a 100% renewable option. Green tariffs cost a small premium above standard electric service, though long-term contracts can provide price assurance and hedge against rate increases in the future.

Xcel currently has two green tariff programs: Windsource, which provides 100% wind power and Renewable*Connect, which provides a blend of wind and solar. Xcel has proposed to merge the programs starting in 2022 and to expand the program to reach more customers. Minnesota Power’s Renewable Source and Otter Tail’s Tailwinds programs provide wind power from projects located in Minnesota, Iowa, and the Dakotas, covering up to 100% of your bill. Xcel, Minnesota Power, and Otter Tail’s programs are tied to specific projects and help to add new wind and solar. 

The 28 electric cooperatives served by Great River Energy provide a REC-based program called Wellspring which allows you to purchase RECs to cover a portion or all of your electricity usage. Check with your cooperative about their renewable energy programs to learn whether they offer a green tariff and whether it is tied to new projects or RECs only.

Conclusion: All of these options are great ways to speed Minnesota’s clean energy transition and support the growth of renewable energy. Fresh Energy has helped shape and drive policies in all of these areas—and we will continue to push for bigger, better, and more inclusive policies to get us all to 100% clean energy as quickly as possible.