Late last week, Minnesota regulators made a decision that may finally allow community solar projects to move forward (for Xcel Energy customers) in the Land of 10,000 Lakes. However, the Public Utilities Commission decision also highlighted the shortcomings of the legislature's distributed solar policy adopted in 2013.
What was missing? Minnesota's increasingly well-known "value of solar" formula was not selected, but rather an "applicable retail rate" that's much more similar to traditional net metering.
The decision last week settled a months-long debate about how subscribers to community solar projects in Minnesota will be compensated, nearly four months after the Commission approved program rules in April. The crux of the matter was that the value of solar formula is mandatory, but utility adoption of it is not. Since Xcel Energy, the only mandatory host of community solar projects, has yet to adopt the value of solar, they successfully lobbied the Commission for an alternative.
That meant looking to traditional net metering, with customers of solar gardens receiving compensation for their share of power generation at a rate comparable to their own electricity rate. However, the law was also clear that the rate paid to subscribers had to be enough to make community solar work, and developers were clear that the "applicable retail rate" (and the value of solar rate of approximately 12¢ per kilowatt-hour) were both insufficient.
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