Xcel Energy Inc., alarmed that its Minnesota community solar program has unleashed large-scale corporate solar development, on Tuesday said it will enforce size limits on projects — a controversial step that would cancel more than 80 percent of those proposed so far.
Even with a size limit, Xcel officials said Minnesota will boast one of the largest community solar programs in the nation. Such programs, which Xcel pioneered in Colorado, let customers subscribe to shared solar arrays built by energy developers in farm fields or on large commercial rooftops.
Xcel’s size-limit directive, issued in a regulatory filing, jeopardizes plans by St. Paul-based Ecolab Inc., Macalester College in St. Paul and St. Olaf College in Northfield to offset all their electricity with subscriptions to multiple solar gardens. Ecolab and St. Olaf had no immediate comment. Macalester said it hopes its deal with a solar developer will remain in place.
Such deals by large energy users represent “a very different product than the one that was intended by the Legislature,” Aakash Chandarana, Xcel regional vice president of rates and regulatory affairs, said in an interview.
Although Xcel supported the 2013 Minnesota law that authorized community solar gardens, the utility has complained that solar developers are proposing clusters of up to 40 adjacent solar gardens on single sites. Many projects, Xcel said, are being marketed only to large customers, and resemble the large “utility scale” solar projects that Xcel is developing separately at lower cost than solar gardens.
Xcel said it will limit each community solar garden site to 1 million watts (1 MW), which is the maximum size set by law. The utility said it will refund application fees for clustered projects that exceed the size limit, and will refuse to consider more of them in the future.
“That is going to bring us back to facilitating really what is supposed to be a community-based program as opposed to a program where you have got the equivalent of a large power plant being built on our distribution system,” Chandarana said.
More than 500 solar gardens have been proposed in Xcel’s Minnesota service area. All are still under review by Xcel. If the large clusters of projects are excluded, Xcel said it still expects about 80 MW of solar gardens would be developed by the end of 2016.
The solar industry likely will challenge Xcel’s directive before the Minnesota Public Utilities Commission, which established the solar garden rules.
“It is a shocking development for the utility to take such a brazen approach to kill solar in Minnesota,” said Mark Andrew, president and founder of GreenMark Solar, which has been planning 25 MW of community solar projects, some of them at clustered sites.
Lynn Hinkle, director of policy for the Minnesota Solar Industries Association, said he believes Xcel is contradicting a 2014 PUC order allowing multiple solar gardens on a single site. “I don’t know how anybody else could interpret it any differently,” he said.
In a statement, the Solar Garden Community, a group of solar developers, said it “strongly disagrees” with Xcel’s position, which is “inconsistent with the plain language of prior commission orders” and an attempt to modify policies the utility helped to draft.
Xcel said it met with solar industry leaders recently, but couldn’t reach agreement about grouping solar gardens.
David Amster-Olszewski, CEO of SunShare, a Colorado-based solar developer that is planning solar gardens in Minnesota, said he believes Xcel issued Tuesday’s directive as an opening tactic to negotiate with the industry. He said that if regulators agree with Xcel’s limits on the program, solar companies likely will shift their investments to other states. At least 19 states have shared-solar programs, according to a National Renewable Energy Lab report released last week.
Chandarana said about 15 solar developers have submitted applications to install nearly 560 MW of solar projects in Minnesota. That’s the equivalent of a large power plant. He said Xcel had expected that about 20 MW of solar gardens would be built each year for the first five years.
Laura McCarten, a regional vice president for Xcel, said the company’s scaled-back program still would be “one of the largest community solar garden programs in the nation — comparable to what the state of California expects to see by the end of 2016.”