On April 7, the Minnesota Public Utilities Commission resoundingly rejected (click the link for an annotated ruling) a severely lacking community solar gardens proposal from Xcel Energy and required substantial improvements for the utility’s revised filing.

The regulatory smack-down means a promising community solar market for Minnesota (scroll down for the infographic version).

The Basics

Advocates worked hard to make it easy to establish community solar projects, and the following basic rules apply:

Minimum of 5 subscribers (who cannot own more than 40% of output, each)
Minimum 200 Watt subscription (typically one physical panel)
25-year standard contract
Total project size can be up to 1 megawatt (AC)

Compensation

The utility (Xcel Energy) must purchase all energy from the community solar project, whether or not it is fully subscribed
For subscribers – utility must pay them the full applicable retail energy rate (like individual net metering), including for net excess generation (energy in excess of their own on-site use)
For unsubscribed energy – utility must buy power from panels that are not owned by subscribers at the applicable retail rate for projects smaller than 40 kilowatts (kW), but only at the avoided cost rate for projects larger than 40 kW
REC – $0.03 per kWh for < 250 kW, $0.02 per kWh for > 250 kW. Not eligible if project also gets Made in Minnesota or Solar Rewards
Applicable retail rate reviewed and adjusted annually.
Bill credits, month-to-month carryover, purchase at end of year (at applicable retail rate)
If and when Xcel Energy files to offer a value of solar price, it will supersede the above rates and REC prices (at time of publication, Xcel has asked the PUC to reconsider the value of solar)

Fees

1-time fees:

A $1200 application fee, refundable if the project is withdrawn
A $100/kW deposit, refundable upon project completion or withdrawal (with interest)

Ongoing:

Administrative (called “participation”) – $300 per year
Metering fee – $66 per year, three phase: $96 per year

Process

Applications are not processed in order of application, but are prioritized as “first ready, first served” to help level the playing field between large and small developers (the latter taking more time to apply, perhaps):

The project meets the definition of completeness in Xcel’s solar-garden tariff;
The project has obtained or arranged appropriate insurance or has entered into an insurance-broker agreement;
There is evidence of site control and a point of interconnection;
There is evidence of projected subscription at the time of construction; and
The project proposal complies with all applicable material terms of the tariff and standard contract and with any additional considerations that Xcel, solar-garden developers, the Department, the OAG, and interested parties participating in the solar-garden working group have agreed to include in the plan.

Despite utility efforts to curtail solar gardens, the PUC emphatically said that there can be no limit on the total installed capacity of solar gardens.

Killed

The following items were thankfully removed from Xcel’s original proposal:

A second deposit
A 2.5 megawatt quarterly limit on solar garden installations
Lower compensation, based on “average retail energy rates”
Capacity limits in DC instead of AC (about 25% smaller)

Will They Grow?

The Public Utilities Commission was very deliberate in identifying rules that facilitate a fair balance between ease of establishing solar gardens and protections for solar gardens subscribers. The PUC also endeavored to provide adequate compensation for solar gardens, setting solar REC prices based on the projected cost of establishing solar gardens. Finally, the Commission removed capacity limits and lower proposed compensation that would have severely hindered development.

In other words, it’s a promising year for community solar in Minnesota, and combined with the victory of solar over natural gas and the solar energy standard, Minnesota’s solar market is heating up.

Photo credit: BlackRockSolar