Energy interests are preparing for another battle at the Minnesota Legislature over a proposed mandate that major utilities gather up to 4 percent of their electricity from the sun by the end of 2025.
After six hours of debate, the state House late Tuesday narrowly passed a bill that would make Minnesota the 17th state to promote solar power with a mix of mandates and incentives. Republicans tried to defeat the bill, and utilities said it would be too expensive.
Now, another Capitol faceoff is expected Friday when the Senate considers the solar legislation.
Supporters say a mandate would promote clean energy, boost employment in the state’s solar industry and reduce greenhouse gas emissions.
“If we are to do something to save our future, we are going to have to move aggressively,” DFL Sen. John Marty, the chief sponsor in the Senate, said in an interview.
But in the face of political resistance, Marty’s solar bill dials back the mandate. It would require 1 percent solar in 2025. By comparison, the House bill’s 4 percent requirement would be one of the more ambitious solar electricity standards in the nation.
Marty’s bill also wouldn’t force utilities to spend up to 1.3 percent of their revenue on incentives to those who install solar arrays at their homes and business. That incentive survived in the House bill despite Republican objections that low-income utility customers would end up subsidizing solar arrays on the homes of people who can afford such projects.
If the bill passes in the Senate, it faces a battle in a conference committee where competing interests get another shot at it.
The legislation is modeled after the state’s renewable energy policies that over the past two decades helped make Minnesota a leading wind power state. Wind now supplies 14 percent of the state’s electricity.
One of the groups lobbying for solar legislation is the Blue Green Alliance, a coalition of unions, including Steelworkers, and environmental activists. It has emphasized job creation and keeping energy dollars in the state. “We don’t have coal mines here,” said Tarryl Clark, a leader in the alliance.
Both solar bills apply mainly to four investor-owned power companies, including Minneapolis-based Xcel Energy Inc., the state’s largest with 1.2 million customers. Rick Evans, Xcel’s director of regional government affairs, said a 4 percent mandate would mean spending $1 billion to add nearly 1,000 megawatts of solar generation.
For perspective, the solar array atop the Ikea store in Bloomington produces about 1 megawatt of power and the state’s largest array, built last year in Slayton, Minn., produces about 2 megawatts.
“We think [the mandate] represents an extraordinary waste of money for our customers in the current economy,” Evans said in an interview.
Other investor-owned utilities affected by the solar bill are Minnesota Power, based in Duluth, and Otter Tail Power Co., based in Fergus Falls, and Interstate Power & Light, a unit of Madison, Wis.-based Alliant Energy that serves southern Minnesota.
Current energy mandates
Minnesota’s existing energy policy requires all utilities except Xcel to get 25 percent of their power from wind and other renewable sources in 2025. Xcel’s mandate is 30 percent in 2020. The House bill would boost the overall renewable requirement to 40 percent in 2030 for investor-owned utilities. The Senate bill makes no change in the current percentages.
The solar mandate would be on top of those percentages, and would have three steps in the House bill — 0.5 percent in 2016, 2 percent in 2020 and 4 percent in 2025. Other states with such policies include New Jersey, with a 4.1 percent solar mandate, and Arizona at 4.5 percent solar mandate.
A spokeswoman for Gov. Mark Dayton said he has long supported renewable energy development, likely would sign the legislation and “looks forward to working with conferees after the Senate passes an energy bill.”
Cooperatives and municipal utilities successfully lobbied to be exempt from many of the new solar mandates and incentives. Iron Range mining and paper companies also would get protection from rate hikes that utilities say the solar mandates would trigger.
Republican legislators said the customer-funded subsidies will shift the costs of solar to customers who can’t afford to install rooftop solar arrays. “You are taking money from poor people and giving it to rich people,” said Rep. Pat Garofalo, R-Farmington.
Solar supporters rejected that argument, saying the legislation would open the door to solar companies that build turnkey solar arrays with no money down. The bill also would let customers invest in community solar projects, and get credit for a share of power sales on their utility bills.
“Right now solar energy is only available to the very wealthy,” said Michael Noble, executive director of Fresh Energy, a St. Paul-based nonprofit that promotes clean energy. “But as a result of this bill, it will be available to everybody.”
Noble said the price of solar power has declined rapidly in the past few years, and is expected to drop further. The legislation also would extend a subsidy for solar panels made in Minnesota, which benefits manufacturers Silicon Energy in Mountain Iron and TenKsolar in Bloomington.