Commercial enterprises, homeowners and nonprofits lined up in great numbers to take advantage of a Minnesota program designed to spur the domestic manufacture of solar panels and increase adoption of photovoltaic (PV) solar through aggressive incentives.

The program, Made in Minnesota (MiM), attracted more than 500 entities to a lottery-based process that will add 5.22 megawatts to the grid. Minnesota has just two companies benefitting from the program, tenKsolar in Bloomington and Silicon Energy in Mountain Iron, which used $5.1 million to build its manufacturing facility.

But the program is about to potentially get a lot more competitive. Two solar PV companies and one solar thermal firm plan to apply to be certified by MiM and begin production in the state, according to Kim Havey, who coordinates the program for the state’s Department of Commerce. At least one may receive MiM certification prior to the start of the next funding cycle next year, he said.

“I think the program was well received,” Havey said. “We had over 12 megawatts applied for and that’s huge. If we had funded all of them we would have doubled the amount of solar capacity in the state in 2013 in one year.”

Homeowners and businesses have to live in the footprint of the state’s four investor-owned utilities – Xcel Energy, Minnesota Power, Otter Tail Power Company and Alliant/Interstate Power and Light Company — to participate in the program. Those utilities pay for the solar subsidy the program offers.

The state splits $15 million annually in incentives between consumers and businesses. Residential customers can get a rebate for projects 10 kilowatts (kW) or less while commercial/non-profit and community solar have a 40 kW limit.

The first year revealed a huge demand from businesses and solar community garden developers, less from the homeowners and multi-family housing owners. The final tally from Commerce shows the following results from the lottery:

• Of the 282 residential applicants who applied 251 homeowners were funded. That’s an 89 percent approval rate. The vast majority, 242, were in Xcel’s territory and all those applicants received funding. That’s not surprising — Xcel contributes the most money to MiM and therefore its ratepayers have the greatest chance of being chosen for the MiM program. The average installation was four to five kW, Havey said.

• Of the 326 commercial PV projects, only 39 percent received funding. Eight of 20 community solar gardens joined the program, while 118 commercial projects did. The majority went after the largest install available and still qualify for the program — 40 kW.

• Money from canceled projects — those people who received money but eventually decided not to go forward — shifted into the commercial side of MiM, allowing the funding of another 15 projects in Xcel’s territory since April.

• Ten residential projects were funded for every one commercial project. “Most of the 40 kW projects came in at 40 kW,” Havey explained. “On the residential side it varied.”

One of the companies involved in the program, Silicon Energy, suffered some issues involving one of its panels. The Minneapolis Star Tribune reported in June the company ceased production of the its Next Generation Cascade Series production after cracks and discoloration arose.

Silicon Energy has been replacing those panels that showed evidence of the problems.

If and when the new manufacturers join the program, each one will have an individual subsidy rate, just as the two existing MiM companies have now. The rate determination will be made by the state. Silicon Energy’s solar subsidy is higher than tenKsolar’s, for example, because it has more domestic content in its panels.

MiM’s budget comes from the five percent each public electric utility pays into the annual Conservation Improvement Program (CIP) budget. Supplements from the Xcel Renewable Development Fund add more money to bring the total available to $15 million per year.

Frank is an independent journalist and consultant based in St. Paul and a longtime contributor to Midwest Energy News. His articles have appeared in more than 50 publications, including Minnesota Monthly, Wired, the Los Angeles Times, the Minneapolis Star Tribune, Minnesota Technology, Finance & Commerce and others. Frank has also been a Humphrey policy fellow at the University of Minnesota, a Fulbright journalism teacher in Pakistan and Albania, and a program director of the World Press Institute at Macalester College. Frank covers the state of Minnesota.

One reply on “Businesses flock to ‘Made in Minnesota’ solar program”