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Minnesota joins other states
Minnesota is the 17th state to enact a solar energy standard. The law is modeled after the state’s renewable energy policies that required utilities to add wind farms. Most Minnesota utilities must get 25 percent of their electricity from renewables, mostly wind, by 2025. The 1.5 percent solar mandate by the end of 2020 is on top of that.
Lynn Hinkle, policy development director for the Minnesota Solar Industries Association, said the state has more than 100 solar-related businesses, including installers who work on residential and commercial projects. He said the law requires 10 percent of solar generation to be from such systems. He estimated that the law will create or maintain about 2,000 industry jobs.
Under the law, Xcel also will change its Solar Rewards program, which has offered upfront rebates to those who install solar systems. Now, the incentive will be a long-term subsidy based on the amount of power generated, and solar customers will be paid for their power instead of getting a credit for watts produced. Xcel’s Evans said the latter change will avoid a hidden subsidy that shifted utility distribution costs to nonsolar customers.
Xcel and other utilities still need to work out many details of their solar programs. Fowke, Xcel’s CEO, said the problem with small, rooftop solar is that it costs about 20 cents per kilowatt/hour, or roughly twice the residential retail rate. He said the utility needs to work with regulators and industry to “get it right” on solar policy.
“If it is done wrong, it will be expensive for our customers,” Fowke said.
Otter Tail Power Co. of Fergus Falls, another investor-owned utility subject to the solar mandate, predicts it will trigger a rate increase of 3 to 5 percent.
Solar supporters say it will help build an industry.
“Our hope is that we are taking the first steps to continue to grow solar and take advantage of opportunities,” said Minnesota Commerce Commissioner Michael Rothman.
Rep. Melissa Hortman, DFL- St. Paul, a sponsor of the measure, said she expects that incentives for made-in-Minnesota solar equipment will bring new businesses to the state. “It is $15 million a year for 10 years,” she said. “That will leverage private investment.”
Two existing solar panel makers — Silicon Energy of Mountain Iron and TenKsolar of Bloomington — stand to benefit from the expanded Minnesota-made subsidy. The law also creates new rebates to encourage installation of Minnesota-made thermal solar equipment to heat buildings or hot water without generating electricity — a sector that had been left out of the earlier subsidy program.
“It means that solar thermal is recognized as a solar technology that is manufactured in Minnesota,” said Randy Hagen, CEO of Solar Skies Manufacturing, which produces solar water heaters in Alexandria.
Jason Edens, director of the Rural Renewable Energy Alliance, a nonprofit manufacturer of solar air heating equipment in Pine River, Minn., said the new rebates of $2,500 and up will help with the company’s mission to bring solar to families with low incomes. “This is going to catalyze a lot of activity,” he said.
David Shaffer • 612-673-7090