February 16, 2024

PUC Decision Costs Minnesotans Millions, Threatens State's Clean Energy Future

St. Paul, MN—Yesterday’s decision by the Minnesota Public Utilities Commission (PUC) to approve a modified version of Xcel Energy's proposal to alter bill credit rates on community solar gardens (CSGs) marks a significant blow to the state’s clean energy industry.

In a stunning 5-0 decision, the PUC approved a unilateral and retroactive shift from the Applicable Retail Rate (ARR) to the Value of Solar (VOS) rate for active community solar gardens, despite the vast majority of the public opposing the proposal due to the impact the change will have on subscribers and the broader renewable energy industry in the state.

Xcel Energy's proposal, now approved by the PUC, significantly reduces bill credits for CSG subscribers, slashing them by up to 30% to the VOS rate established in 2017. The shift not only impacts current subscribers but also jeopardizes the integrity of contracts signed nearly a decade ago, based on prior orders and assurances from the PUC and calls into question the financeability of all contracts under the purview of the Commission from here forward.

“CCSA advocates for community solar across the country, and we’ve never seen a Commission tear up long-term contracts before,” said Kevin Cray of the Coalition for Community Solar Access (CCSA.) “This move by the Commission is short-sighted and risks completely derailing Minnesota’s progress towards reaching its carbon reduction goals and will result in higher costs of capital for renewable energy developers and therefore higher costs for Minnesota ratepayers. Disregarding long-term contracts sets up a risky and uncertain future for any type of clean energy development in the state which is likely to create ripple effects across the country.”

Community solar gardens have created over 860 megawatts of clean energy across Minnesota. As a top three market in the country, CSGs have been instrumental in democratizing access to renewable energy, deploying cleaner energy to cut carbon emissions, and bringing bill savings to hospitals, churches, non-profits, school districts, local counties and city governments, small businesses, and residents. Over 70% of Minnesota’s CSG subscribers are public interest groups and residents, according to an analysis from the Department of Commerce in their filed comments.

“Hundreds of comments were filed in opposition to Xcel’s proposal,” says Pouya Najmaie of Cooperative Energy Futures. “There’s a misconception that CSG subscribers are mostly large businesses, but they’re not. The decision will hurt Minnesotans, particularly low-to-moderate income residents and public-interest entities and nonprofits like cities, counties, school districts, and churches. Subscribing to a community solar garden was a way for income-strapped Minnesotans to save much needed money on their energy bills. Now, these families will unexpectedly be left with much larger electric bills than they had budgeted for, and may not be able to afford.”

In their filed comments, the City of Minneapolis says, “It would be difficult to estimate the financial harm…since it is likely to go beyond the bill credit savings. [Approving Xcel’s proposal] may lead to housing insecurity, near and long-term budget impacts, unplanned layoffs, and disruption of services or projects planned for the benefit of the public.” The City of Minneapolis estimates the change will cost them $440,000 in the first year alone.

This decision not only undermines the financial stability of subscribers but also poses a threat to the viability and attractiveness of all solar and clean energy projects. In their comments, Standard Solar said that if rates were changed they would, “View the regulatory environment in Minnesota as increasingly risky and unpredictable, requiring a significant risk premium to justify future development or investment efforts.”

Across all industries and business types, if you increase risks you inevitably increase costs. Yesterday’s PUC decision is likely to change the way clean energy projects are developed in Minnesota, as regulatory certainty for long-term projects is no longer guaranteed in the state.

“The legislature passed very ambitious clean energy goals last year to put us on a path to a 100% carbon free economy in just 16 short years,” said Logan O’Grady, Executive Director of MnSEIA, “That goal has, unfortunately, become harder and more expensive to reach due to the Commission’s decision. It’s disappointing for our industry, but I feel worse for our industry’s customers: the Minnesotans, schools, governments, nonprofits, and communities who will now feel the economic consequences of this short-sighted decision. This outcome could haunt our state and clean energy industry for years to come.”

MnSEIA, CCSA, our members, and our partners will continue to defend Minnesotans and their rights to access clean energy through community solar.


About MnSEIA:
MnSEIA is a member-driven 501(c)(6) nonprofit that promotes and protects Minnesota’s solar and storage industries. We advocate in the state legislative and regulatory arenas in a unified and actionable way to move solar + storage forward. Find out more at

Media Contact:
Abbi Morgan, Director of Business Development & Communications