The PV Demand Credit is an incentive for commercial and industrial Xcel Energy customers interested in or currently maintaining on-site solar arrays. Utility customers are offered a similar benefit called a “standby tariff.” Under this, customers agree to reduce their electric use during times of peak demand. On-site solar arrays also reduce demand on the electric grid which led to the push for a similar credit. The initial PV Demand Credit was a complicated calculation that lacked predictability for solar array owners, resulting in unnecessary obstacles to take advantage of this credit.
MnSEIA negotiated with Xcel Energy and the Minnesota Department of Commerce to develop a more simple and predictable method for calculating the PV Demand Credit. The Minnesota Public Utility Commission ultimately adopted MnSEIA’s proposal, and in 2018 Xcel Energy introduced the PV Demand Credit Rider.
Xcel updated the PV Demand Credit Rider in 2020 and is expected to update it every three years. The PV Demand Credit creates a great market opportunity for commercial and industrial solar developers in Minnesota that is predictable and scalable.