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The number of Minnesota solar projects stalled due to delays by Xcel Energy has ballooned to more than 300, with a backlog of applications that solar industry leaders say will take decades to clear at the utility’s current pace.
In one case in central Minnesota, Xcel told a customer they would have to wait 15 years for the company to review their application to connect a 9.5-kilowatt rooftop system to the utility’s distribution grid.
“This is the number one issue I hear about from our members. I get emails every day about this,” said Logan O’Grady, executive director of the Minnesota Solar Energy Industries Association.
An analysis by the association concluded that, at the current pace, it would take nearly 260 years for Xcel Energy to clear the backlog of requests. Most of those waiting are community solar projects in suburbs outside the Twin Cities.
In a statement to regulators, Xcel Energy said it recognizes “that we have not met the Commission’s and our customers’ expectations.” The utility recently said starting in October it would expedite and cover some of the cost of grid upgrades required for small installations by homeowners and businesses.
But that still leaves hundreds of larger projects in limbo, with solar developers calling for further reforms, including a third-party investigation of the process or legislative actions if it doesn’t improve.
Minnesota utility regulators and solar stakeholders have spent years negotiating improvements to the state’s interconnection rules, which govern how utilities respond to requests to connect distributed generation to their grids. The highly technical and regulated process requires weeks or months of studies and due diligence to ensure projects don’t disrupt grid reliability.
The most recent reforms took effect in the summer of 2019 and were meant to quicken approval times. Instead, the process slowed even further, with Xcel eventually paying a $1 million fine to resolve 120 complaints made by customers that year. Last year was no different, with Xcel missing deadlines more than half of the time on each step of the interconnection process, even for smaller systems in residential areas. By August of this year, the utility had put 316 applications “on hold” because of capacity constraints, an 86% increase from last year.
Most of the backlog consists of community solar projects that want to connect in congested suburban areas. Community solar subscribers must live in the county where the garden is located or an adjacent county. The limitation has left solar developers scrambling to find land in exurban areas.
Only 37 applications awaiting approval are small solar projects for households and businesses, such as the one receiving the 15-year wait notice. Starting in October the utility says it will pay for distribution energy upgrades up to $15,000 for Solar Rewards residential customers, an issue that came to a head in Northfield earlier this year.
Xcel reported that 15% of its network of transmission lines and substations carry most of the community solar projects. “The explosive CSG [community solar garden] growth alongside policy development led to several of the Company’s feeders that ring the Twin Cities Metropolitan Area to become saturated with DER [distributed energy resources] such that many projects now have been placed on hold and smaller systems have encountered their own challenges,” the utility wrote in a filing.
In a statement last week to the Energy News Network, Xcel said it has been hiring engineers and other solar experts to work on applications. It plans to ask the Public Utilities Commission to require developers to participate in cluster or group studies and to allow it to reserve capacity on its system for smaller solar installations.
As it has in the past, Xcel highlighted that Minnesota’s community solar program remains by far the largest in the nation, concluding that it has “proposed a regulatory path to enable the Commission to provide additional direction on their vision for balancing grid reliability and performance with meeting customer and solar industry needs.”
At least one solar developer contends that the problems go beyond these congested areas. Julian White, a partner with Nokomis Energy, said the company has identified less congested substations and still seen lengthening delays. The timeline for projects, Nokomis wrote in a submission to regulators, has doubled from 110 to 244 days when considering on-hold projects.
The basic outline of the state’s interconnection process is not flawed, but could be tweaked, according to Isabel Ricker, senior clean electricity manager for Fresh Energy, a nonprofit environmental policy group that also publishes the Energy News Network.
“Generally, we feel like the problems are more a result of Xcel’s implementation and internal processes than problems with the [interconnection process] language itself,” Ricker said. “There are definitely some areas where we need to add details, change wording or clarify.”
Until the delays are solved, solar industry leaders say the state is leaving jobs on the table. The Minnesota Solar Energy Industries Association estimated the pipeline of unapproved solar projects would create 750 to 900 jobs.
Last year regulators asked Minnesota utilities for proposals that could accelerate clean energy investments to revitalize the economy. One good way to do that, said White of Nokomis Energy, is to move solar projects forward in Xcel’s interconnection queue.
“The broader idea is that there are still 300 megawatts sitting in those queues, and that’s economic recovery. Those are local jobs,” White said. “To me, it has always been kind of a head-scratcher. These are megawatts that can get people to work right now and can lead to savings right now.”
The Minnesota Public Utilities Commission and stakeholder groups formed to deal with the issue have received many submissions from local and national organizations suggesting improvements. The suggestions include having a third party investigate the process to determine where glitches occur, or requiring the use of cluster or group studies at busy feeder stations — an approach Xcel now embraces.
David Shaffer, Novel Energy Solutions’ director of policy and government affairs, suggests a third-party investigation of the queue could determine responsibility for the slowdown and identify approaches for alleviating bottlenecks. An inquiry could study the disputes over factual issues, the problem of engineer turnover, missing deadlines and the potential of institutional obstruction. “Developers see these things differently than Xcel and an investigator would be able to give us some insight,” Shaffer said.
Michael Allen, CEO of All Energy Solar, said he and other developers would like better transparency from Xcel, including more details about its proposal to help cover costs for Solar Rewards customers and to upgrade other infrastructure when installing solar. Other commentators filing with regulators agreed with Allen, noting that other utilities share the cost of upgrades and even publish “cost guides” customers can use to anticipate future payments.
Xcel has filed several long documents with regulators detailing changes to move the queue but some industry officials remain skeptical. “I am more of the route of if we’re going to clarify something, we need the Legislature to tell the [Public Utilities Commission] what to do,” said O’Grady of the solar industry association.
Developers have seen some improvement, with the residential backup nearly erased. White said Nokomis Energy staffers have seen more engineers and regulatory analysts than in the past. “I’m definitely optimistic that we’re going to get to a better place collectively,” he said.
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