Five energy companies have won contracts to build large, community solar projects to offset a share of the electricity used by 30 Twin Cities public agencies and local governments, including Minneapolis.
Under the terms of the deals, released this week, a mix of national and Minnesota-based energy companies — BHE Renewables, SolarStone Partners, SunShare, TruNorth Solar and U.S. Solar Corp. — will finance, construct and operate the separate solar projects, which will be built on private land.
It is the first time that government agencies in Minnesota have joined to seek competitive bids for solar — an effort led by the Metropolitan Council, a regional agency that is relying on solar to help power its wastewater treatment plants and transit operations.
Jason Willett, the council’s sustainability director, said he expects about 40 megawatts to 50 megawatts of solar to be developed at multiple sites for 23 cities, three counties, the Met Council and other agencies. One megawatt is about 1 million watts, the output needed to power about 200 homes.
As subscribers of solar gardens, the governments won’t directly use the electricity, which goes onto Minneapolis-based Xcel Energy’s distribution network. Instead, cities and agencies that sign 25-year solar subscriptions will get savings on their electric bills, although the pricing terms vary by company.
“I doubt that anybody has a better deal,” said Willett, who also is the assistant general manager for finance in the Met Council environmental services unit.
Community solar gardens are an option available to Xcel subscribers under a 2013 Minnesota law to encourage customer choice in solar energy. The shared-solar concept, which avoids the need for customers to install their own solar panels, also is being marketed to homeowners and businesses. Independent energy companies will own the projects, many of which are expected to be built this year on open land at the urban fringe.
In Minneapolis, the City Council last week approved its jointly negotiated solar deals with four energy companies. A city analysis projected savings of about $28,000 in the first year. Met Council expects to save about 1 percent on its systemwide electricity costs, or about $5.2 million over the 25-year contract.
Some governments are still reviewing the terms, including Hennepin County. Cities that participated in the solar bid range from Bayport to Rogers to Rosemount. Other large participants include Washington County and Ramsey County.
In Robbinsdale, City Manager Marcia Glick said she is going over the negotiated terms for a planned U.S. Solar project in Carver County to offset some of the electricity used in city police, fire and public works buildings.
“Being part of the big group and having someone else help us through the government procurement process and reviewing all the submissions really helped us as a small city,” she said.
Not every government agency is expected to sign its solar deal. The Three Rivers Park District already has rejected the proposal it was offered.
“Solar costs are continuing to go down. We thought if we held off a year or two we would get a much better deal,” said Jonathan Vlaming, associate superintendent of planning, design and technology for the district.
None of the governments that sign the current deals will completely offset their electricity use with solar gardens, leaving the option to consider future solar proposals. Because developers bid less solar capacity than the cities requested, a lottery system was used to divvy up what was available.
Some of the solar gardens may not get built. That’s because hundreds of solar sites and their grid connections are still being studied by Xcel Energy. “There is a lot up in the air,” said Martin Morud, president of Edina-based TruNorth Solar, one of the five companies to win government contracts. “Xcel still has to come through on its side.”
Trevor Drake, project manager with the Great Plains Institute and the Clean Energy Resource Teams, two nonprofits that helped coordinate the solar bid, said it is the first time local governments have joined together for such a solar bid.
“This is important for creating access to the solar garden market for local governments,” he said.
The state of Minnesota has launched similar process to contract for solar gardens to offset electricity used at the State Capitol and other buildings in St. Paul.