SolarCity Corp., the nation's largest installer of residential solar ­panels, says it will invest $200 million in Minnesota to build its first community solar gardens, and hopes to sell much of their electric output to apartment dwellers who have been left out of the rooftop solar market.

The company, based in San Mateo, Calif., said it signed a deal with Sunrise Energy Ventures of Minnetonka to construct 100 Minnesota solar gardens that offer subscribers clean energy at favorable prices. SolarCity would build, own and operate the solar gardens, which would be built on land on the fringe of the Twin Cities.

It is the first shared-solar offering — and a fresh direction — for a company that invented the concept of financing, installing and maintaining solar panels on residential and business properties. In 2014, according to GTM Research, SolarCity installed more than one-third of U.S. residential solar panels, although Minnesota isn't one of 18 states where the ­company has operated.

SolarCity CEO and co-founder Lyndon Rive said solar gardens are ideal for renters. To reach them, he said, the company will offer streamlined signup, a one-year-only commitment and savings of 10 percent to 15 percent off their electric bills with Xcel Energy, the state's largest power company.

"It enables us to provide clean, cheaper energy to renters," Rive said in an interview Tuesday about the company's solar garden launch. "The product will be available … to schools, hospitals, businesses and homeowners, but ideally we will get as many renters as possible."

Others have corporate focus

SolarCity isn't the only large solar company to enter the Minnesota market to build solar gardens under a 2013 state law that authorizes them for Xcel's 1.2 million electric customers. But some other large companies, including SunEdison, based in Belmont, Calif., and SoCore Energy of Chicago, have focused on signing up large corporate and institutional solar subscribers. By contrast, SolarCity wants a slice of the residential market, though it is not alone.

SunShare, a Denver-based pioneer in developing shared solar, also announced Tuesday that it hopes to sign up 5,000 residential customers for its Minnesota solar gardens by December. Just last week, the city of Cologne said it signed a deal with SunShare to offset all its municipal electricity with solar power, the first Minnesota city to go all solar.

Dispute with Xcel

Solar garden developers are hoping to get projects built in 2016, the last year of a 30 percent federal solar investment tax credit. But first they need to get solar gardens started, and that's being held up partly by a regulatory ­dispute with Xcel.

The utility objects to plans by several companies, including SolarCity, to cluster multiple solar gardens at one location. By law, no garden can be more than 1 megawatt, or 1 million watts. SolarCity says it wants to build 100 megawatts of solar gardens, grouped together at sites in Wright and Sherburne counties.

Solar industry executives were negotiating Tuesday with Xcel officials, hoping to settle the dispute before the state Public Utilities Commission takes it up next week.

If Xcel prevails with a no-clustering policy, it could put a crimp in SolarCity's and other companies' plans.

"We would have to find different sites," said Dean Leischow, managing partner of Sunrise Energy Ventures, which signed the deal with SolarCity.

Unlike residential solar, which is often built on home rooftops, solar gardens are planned mostly on the ground, often on leased farmland. Xcel customers who subscribe to a solar garden are credited on their monthly bills for a share of its output. State-regulated pricing makes it a good deal for consumers. So far, only Xcel offers solar gardens with such favorable rates.

"I think there is going to be oversubscription, and we are going to have waiting lists," Rive said.

SolarCity, a publicly traded company that has grown dramatically but has yet to turn a profit, plans eventually to develop solar gardens in other states with policies that encourage them, likely on the East Coast and in Texas, Rive said.

"Our hope is that this [Minnesota's program] is an example to follow and you can scale it from … 600,000 renters to eventually 100 million renters across the country," he added.

Rive said utilities might be more amenable to solar gardens if their operators were required to pay a fee to compensate utilities for the cost of delivering solar power to customers. He added that solar gardens still can work after the federal solar tax credit drops to 10 percent in 2017, but "that reduction is going to be painful in the industry."