Despite questions about the price tag, Minnesota regulators on Thursday approved Minnesota Power's planned $30 million solar power project at the Minnesota Army National Guard's Camp Ripley Training Center near Little Falls, Minn.

The project's 120,000 solar panels covering 80 acres will generate electricity used by the Duluth-based utility's customers. But in a unique arrangement, the solar panels will switch roles during a power outage — feeding electricity just to Camp Ripley to complement other planned backup generation.

It is the first large-scale solar project to be built by Minnesota Power, the state's third-largest power company with 143,000 customers in the state's northeastern counties. The project site is a former gravel and sand pit partly covered with trees to be removed before construction begins in May.

"This is one of those cases where we were able to tailor a project … that meets not only the electric needs, but energy security, renewable energy and site-specific benefits," said Al Rudeck, Minnesota Power vice president for strategy and planning.

The solar array's 10-million-watt output will deliver about one-third of the solar energy the utility needs to meet a state requirement to get 1.5 percent of its electricity from the sun by 2020. The output is the equivalent to the electricity used by 2,000 homes.

The Minnesota Public Utilities Commission approved the project 5-0 but questioned the price. At an expected $3 per installed watt, it is more costly than Xcel Energy's planned North Star Solar Project near North Branch, Minn., estimated at $1.80 per watt.

One factor in the Camp Ripley project's price is that the solar panels will be U.S.-made instead of lower-cost imports. First Solar's manufacturing plant in Perrysburg, Ohio, will supply panels with "the ability to collect diffuse light, which is crucial to efficient generation" in Minnesota's climate, the utility said in a regulatory filing.

Regulators had concerns about the size of lease payments Minnesota Power will make to the guard for the project site over 35 years, saying they appear to exceed comparable land prices in the area.

"I don't want to trip this program up," said Commissioner John Tuma, who later voted for the project. "I want to make sure the widow up in northern Minnesota isn't paying too much."

Residential ratepayers' bills will go up about 50 cents per month to pay for the solar project. Under an exemption in state law, big power users like taconite mines won't pay extra for solar.

An analysis by the state Commerce Department found that if the project's price had come in 25 percent lower, it would have been a cost savings to ratepayers. The commission urged Minnesota Power to seek competitive, multiple-location bids in the hope of getting lower prices for future solar projects.

A bank initially will own the project, capturing the tax credits, and lease the panels back to Minnesota Power, which will operate and maintain the array. After 10 years, the utility expects to buy the project from the bank.

David Shaffer • 612-673-7090 • @ShafferStrib