The bill announced at the state Legislature aims to dramatically expand the solar power industry in Minnesota, creating 2,000 new jobs in the first year, supporters said. The solar mandate would be on top of the 25 percent renewable energy requirement that most utilities expect to achieve by 2025, largely with wind power.
The state’s two largest electric companies, Xcel Energy Inc. and Great River Energy, said they oppose the measure, citing its effect on customer rates, which the bill said could increase by up to 1.3 percent. Much of the new solar generating capacity would be installed at homes and businesses with the power sold to utilities under new, state-regulated rates, according to the bill. Advocates say that strategy would avoid transmission line investments by utilities.
Today, the state has just 13 megawatts of solar power generating capacity. That’s roughly the equivalent of a small 1940s-era power plant or nine large wind turbines. The bill’s goal is 5,300 megawatts — more than the state’s current wind power capacity, and twice the output of the state’s largest coal-burning power plant.
“In an era of minimal [electric] sales growth, we are concerned that new mandates would burden our members with additional costs,” said Therese LaCanne, spokeswoman for Great River Energy, a wholesale power supplier based in Maple Grove owned by 28 electric cooperatives serving 645,000 Minnesota customers.
Laura McCarten, a regional vice president for Minneapolis-based Xcel Energy, the state’s largest electric utility with 1.2 million state customers, said solar is three to five times more expensive than wind power and only available about 20 percent of the time. Xcel, which has more wind generation on its eight-state system than any other U.S. utility, is already required to get 30 percent of its power in Minnesota from wind by 2020.
“We don’t think the 10 percent mandate is appropriate for our customers at this time,” McCarten said in an interview. “We do have a very diversified energy portfolio and we want to remain that way. ... Right now, solar power is an expensive resource.”
Otter Tail Power Co. of Fergus Falls, Minn., and Minnesota Power of Duluth also expressed reservations.
“Markets, not mandates, should drive energy development, and solar energy is presently not cost-effective compared with other forms of energy, including wind energy,” said Cris Oehler, an Otter Tail spokeswoman.
The measure is sponsored by Sen. Chris Eaton, DFL-Brooklyn Center, and Rep. Will Morgan, DFL-Burnsville, who pointed to 16 other states that have enacted solar energy standards. The two were joined by unions and solar industry officials at a Capitol news conference.
“We are not trying to start a new industry in Minnesota,” said Lynn Hinkle, director of policy development for the Minnesota Solar Energy Industries Association, a trade group. “What we are trying to do is expand the asset that is already in place.”
The state Commerce Department also has been working on energy legislation, but it has not yet proposed a bill. A spokeswoman for Gov. Mark Dayton said he has not yet reviewed the Eaton-Morgan bill, but has expressed support for expanding renewable energy.
Morgan, the House sponsor, said his bill is certain to be revised. “This is our first effort,” he said. “We understand there are people who have some concerns. We want to work with them.