2019 Minnesota Legislature: Strengthening Our Community Solar Garden Program
An exciting set of Minnesota legislative proposals would elevate Minnesota’s nation-leading Community Solar Garden program
April 4, 2019
What does a “healthy” Community Solar Garden (CSG) program look like? How can Minnesota continue to lead our nation with a community-centric suite of reforms? These are the questions before the Minnesota Legislature as it looks at improving Minnesota’s CSG program. The changes discussed below, if adopted, should help customers, the solar industry and the environment.
Since its inception in 2014, the Xcel Energy Community Solar Garden Program has garnered great investment and support as a leading piece of Minnesota’s clean energy economy. After the program took off in 2016, Minnesota watched the number of jobs in solar energy double. “Solar Installer” is now the fastest growing job in Minnesota and a lot of that has to do with its nation-leading CSG program.
Proposed legislative reform for the CSG program has seen a variety of approaches in the House and Senate this year. In this article, we focus on the bill proposals that usher in our clean energy transition, while ensuring everyone has access to it. It should also help promote more clean energy jobs, too.
State Representative Jamie Long’s CSG bill, HF 2625, and the House Energy & Climate Division Omnibus Energy Bill, HF1833, address the most important concerns for the future of the Community Solar Garden program.
The bills address costs and locational development challenges with three main solutions:
Increase the garden size cap from one to three Megawatts
Remove the contiguous county restriction with residential setback preconditions
Improve financing methodology for residential community solar, including low-income considerations, and designate the Department of Commerce as program administrator
Increasing Colocation, or Garden Size Cap, to Three Megawatts
House bills increase the garden size cap from one to three Megawatts. Over time this program has become increasingly hard to finance and this should change that by reducing costs. In the past, a developer could build unlimited one Megawatt solar gardens next to each other at the Applicable Retail Rate. Shortly thereafter, this was scaled down to five one-Megawatt sized gardens at the Applicable Retail Rate. Eventually the cap was reduced further to one Megawatt at the Applicable Retail Rate. Scaling gardens down to this size makes the percentage of interconnection costs paid by developers higher, as well as other transaction costs like land acquisition and permitting.
Compounding this issue is the fact that the Applicable Retail Rate is no longer used: presently, gardens are financed using the much lower Value of Solar rate. Since the transition to the Value of Solar rate, the rate has decreased each year.
A recent surge of applications is due to developers submitting their applications to lock in the 2018 Value of Solar rate before it declines 10% in 2019. This 10% reduction will significantly hamper the deployment of gardens, and if a further drop happens in 2020, this program may run out of steam.
The proposed increase in solar garden size will lessen interconnection costs and costs of development, create more energy from the program, and improve the incentive to build community solar gardens with the ability to capture a larger capacity.
Removing Contiguous County Restriction Language
The proposed reforms also alter the contiguous county requirements. The bills seek to open the program up to those in greater Minnesota. Currently, gardens must be built in the same county or a county contiguous to where its subscribers are located. Since the subscriber base is largely from the metro area, it is difficult to develop gardens in counties removed from the metro. This limits access for those customers that want to participate in a Community Solar Garden in outstate Minnesota, on the fringes of Xcel Energy service territory.
The proposed elimination of the contiguous county requirement is allowed for projects that impose a 100 foot setback from the nearest residential structure and would include a 10% residential participation requirement. This facet of the bill would improve the program’s ability to benefit more customers and help those farmers that are wishing to “farm the sun.”
Increasing Residential Participation and Subscriber Value
The House bills also include provisions to radically increase residential participation. The program includes a new type of Community Solar Garden called a “Community Access Project,” which will give developers the option to participate in a program designed to spur radical levels of residential engagement. Among a handful of other program requirements, all Community Access Projects must have at least 50% of the garden’s generating capacity subscribed to residential customers. In exchange, the rate subscribers to the garden will receive will be at the retail rate. This is a much higher value for residential customers than they currently get under the Value of Solar rate.
Additionally, the bill includes a Low-Income Home Energy Assistance Program (LIHEAP) Community Solar Garden Grant Program. Gardens that are 500kW or less in size that have 100% residential customers that receive LIHEAP assistance, among other program requirements, are eligible to receive grants from the Department of Commerce to develop a local Community Solar Garden.
The bills whole-heartedly embrace residential and low-income participation in the community solar gardens program. They really aim at driving more access to our nation-leading program.
Let’s “Move Solar Forward” by embracing these visionary reforms for our nation-leading Community Solar Garden program, one of the fastest contributors towards Minnesota’s clean energy economy. We no longer have to pick between a robust economy and the environment: we can have both.