Expectations are high today as Minnesota’s largest utility begins accepting applications for community solar projects at 9 a.m. today.
It’s anyone guess show many solar garden developers will submit on the first day of business for Xcel Energy‘s Solar Rewards Community program. Some developers have already marketed and sold out projects that have been not formally approved.
“We see high interest in this and we expect we’ll see a lot of applications but we don’t know what the pace will be,” said Laura McCarten, regional vice president. “One estimated guess is we could get 100 megawatts of applications, but we’ll see how it unfolds. Time will tell.”
The reason for the potentially large number of applicants is that Minnesota is the first state not to cap the amount of power that can be generated from community solar gardens. In Colorado, where Xcel also operates, the state imposed a limit of 6 MW on the amount of power that can be installed annually.
The limit creates a mad dash of applications the first day they are accepted in Colorado, a situation unlikely to happen here, she said.
Community gardens allow customers to buy panels or subscriptions from developers who manage and operate the systems. Customers can buy up to 120 percent of their energy needs, or as little as one panel. They receive a credit on their utility bills based on the output of their panels.
Consumers can only participate in solar gardens in the county where they live, or an adjacent county. Xcel will offer them credits on their bills based on the output of the panels they have within a solar garden.
Community solar offers an opportunity to buy a little, or a lot, of renewable energy and to hedge against rising costs because developers often will offer 25 year contracts to subscribers.
‘It will be a learning curve’
Lynn Hinkle, policy director for Minnesota Solar Energy Industries Association (MnSEIA), said the solar companies are “excited” by the program getting underway and the early applications could play a role in a continuing debate by the Minnesota Public Utilities Commission (PUC) over value of solar rates.
For now Xcel will paying for the power generated using an “applicable retail rate” but Hinkle and other solar advocates want a value-of-solar rate established. Data from the community solar garden program could have an impact on the issue, which will be debated in February by the PUC, he said.
In the meantime, MnSEIA is working with the Clean Energy Resource Teams (CERTs) on documents for consumers interested in community solar, including tip sheets and other information. CERTs currently offers an introduction to community solar gardens on its website.
After submitting the application, developers can expect approval within a time frame of three or more months, said Thor Bjork, Xcel Energy product developer. There will be plenty of communication between developers and the company, he said, especially over how community solar projects will connect to Xcel’s grid through substations.
The first group of community solar gardens are expected to be running by the middle of next year, with construction occurring in spring.
There will be challenges.
“We have taken every effort to make sure we’re well prepared and that process is clear,” said McCarten. “We’re prepared on our end but we don’t know how much will come at us and at what pace. It will be a learning curve.”
As for any pressure on the electric grid, Bjork said any issues that arise will involve whether substations will be able to manage a new source of power. “It’s a bit of an unknown going forward,” added McCarten.
‘Eager to get the ball rolling’
Developers are, of course, happy to see the program start. Sunshare, a Colorado-based community solar provider that opened a Minneapolis office, offered a prepared quote from its founder and CEO, David Amster-Olszewski.
“Minnesota’s Community Solar program allows every resident and business in Xcel Energy’s Minnesota service territory to choose solar energy for the first time in history, making solar truly accessible to everyone,” he said.
“It’s also the first time in the nation that a state governing body and major utility has made such a large commitment to its citizens. We are excited to be part of the market and for the opportunity to work with Xcel Energy once again. Minnesota’s leadership validates the Community Solar business model and will undoubtedly drive more states across the nation to create similar programs.”
Sunshare did not say if it was submitting an application, but one developer who will be is Minnesota Community Solar, said lead designer Steve Coleman. The company will submit applications for two 40 kilowatt (kW) projects in Minneapolis — both of which have sold out — to be installed on the rooftops of Bethel Evangelical Lutheran Church and Northern Sun Merchandising.
“We will be beginning the application process Friday and making applications for others soon after that,” he said. “On the two small projects I have good confidence that Xcel will see no reason not to accept them. I don’t see any challenges with them.”
Minnesota Community Solar has a much larger 1 MW project in Gaylord that Coleman feels confident will be approved by Xcel, but “there’s much less certainty.”
Coleman does not know how much activity there will be on Friday but he and other installers “are eager to get the ball rolling, and this is the most critical ball-rolling date.”
Under Minnesota law investor-owned utilities have to produce 1.5 percent of sales from solar energy by 2020. Xcel’s share of that goal is 300 MW. While community solar gardens will help meet part of the goal the company’s solar portfolio is growing substantially through proposed purchase agreements, McCarten pointed out.
The company submitted to the PUC in October plans to buy 187 MW of solar from three projects. They include purchasing 100 MW from Community Energy Resources LLC’s North Star Solar project in North Branch; 62 MW from NextEra Energy Resources’ Marshall Solar project and 25 MW from Juwi Solar’s MN Solar I project close to Tracy.
The PUC has made no decision on that proposal.
The company will continues its Solar Rewards rooftop incentive program. For now Xcel will likely be busy processing community solar applications, however.
“We have a lot of customers calling,” McCarten said. “People really want to directly engage in solar power. Having this community solar program meets the needs of customers who can’t or won’t do solar on their homes. And it will be part of advancing solar in this state. We’re excited about this.”