Last week, Minnesota regulators approved a utility controlled community solar program for Minnesota Power, creating new options for utility customers and taking steps to grow the solar market in Northern Minnesota communities. While the program falls short of what Fresh Energy recommended, our coordinated efforts with other energy experts and local advocates improved upon the utility’s initial proposal.
- In its first year, Minnesota Power’s program will be entirely utility controlled and will not allow for market competition among solar businesses. However, next year the utility will be required to consider up to 3 megawatts of community solar from community organizations and independent solar businesses,
- The program will include a 40 kilowatt project in the City of Duluth and 1 megawatt in St. Louis County.
- Several changes were made to the program at the recommendation of Fresh Energy and groups representing Minnesota Power customers, including more fair bill credits for subscribers, improved pricing for solar renewable energy credits, requiring Minnesota Power to complete a Value of Solar analysis, and not allowing these community solar projects to count for the small system carve out in Minnesota’s solar energy standard.
Minnesota Power’s initial proposal was for a fully utility-controlled program, with no access for community or solar business proposals, a limited bill credit for subscribers and the utility sought to use the program to comply with the state’s standards requiring distributed solar energy.
Based on our recommendations to improve the pilot program to fairly compensate subscribers and to comply with state law, the Commission required the following changes:
- Not allowing Minnesota Power to circumvent the state’s Solar Energy Standard requirement for distributed solar. Minnesota’s Solar Energy Standard requires Minnesota Power to generate 1.5 percent of its electricity from solar power by 2020 and sets a goal of 10 percent by 2030. Of that, 10 percent must come from small systems, which is intended to make sure small, customer-sited solar is not ignored. Minnesota Power sought to use community solar to meet this small solar requirement rather than meeting it through customer-sited solar. We successfully convinced the Minnesota Public Utilities Commission that this practice is contrary to the Solar Energy Standard and to not allow this practice.
- Fair compensation for subscribers. Because customer-subscribers will ultimately pay the costs of Minnesota Power’s community solar garden, Fresh Energy pushed to make sure those subscribers received fair compensation for the benefits their solar provides to the whole Minnesota Power electricity system. At our recommendation, the Commission rejected Minnesota Power’s very low proposed payment to subscribers for renewable energy credits. Instead, it ordered Minnesota Power to develop pricing based on a competitive bidding process. In addition, the Commission required that subscribers receive full credit on their utility bills for the electricity generated from their subscriptions, not just a portion of their bill. The Commission also required Minnesota Power to calculate and publicly file a Value of Solar calculation based on Minnesota’s approved methodology. Doing so will allow stakeholders and the Commission to more accurately determine future subscriber bill credits based on the actual value distributed solar provides to the utility system.
- Opportunity for community solar projects that are not solely utility-controlled. Minnesota Power’s proposal was that it should be the only entity allowed to offer community solar. Fresh Energy and many organizations in Northern Minnesota argued that others, like community organizations, churches and low-income focused developers should be allowed to offer community solar projects that meet their particular needs. In addition, solar businesses should be allowed to compete to serve any customer interest for shared solar the Minnesota Power does not meet. The Commission agreed that non-utility community solar projects should be strongly considered as an option for Minnesota Power customers, and ordered that Minnesota Power solicit proposals for up to 3 megawatts of additional, non-utility controlled community solar projects in 2017.