FAQ: Minnesota's new solar energy law
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What is Minnesota's new solar energy law?
The law passed by the Minnesota Legislature and signed by Gov. Mark Dayton requires the four investor-owned utilities in Minnesota — Xcel Energy, Minnesota Power, Otter Tail Power and Interstate Power & Light — to generate at least 1.5 percent of their electricity from solar power by the end of 2020.
The law provides money for incentives for homeowners and businesses that want to install solar panels on their property. It also creates an opportunity for community solar gardens, which allow consumers to buy or lease a small piece of a larger solar array. The law says the utilities must generate at least 10 percent of the newly required solar power from smaller solar arrays — 20 kilowatts or less.
How do the utilities plan to reach the standard?
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It's not clear yet. The law is new, so the utilities have not yet come up with their plans. But they will reach the standard through a combination of community solar projects, panels on homes and businesses, and utility-scale solar installations.
Xcel Energy officials say the larger installations will give them more bang for their buck, but they are required to generate 10 percent of the newly required solar power from smaller sources.
The timeline for new solar energy developments is also unclear. The law only requires the utilities to meet the standard by late 2020, and Xcel has already said it would like to see the costs of solar come down more.
The utilities are required to report their progress to the Minnesota Public Utilities Commission once a year starting in July 2014.
Have any other states done something like this?
Yes. More than a dozen other states have solar energy standards. States including Colorado and New Mexico have community solar gardens.
I own a home and am interested in putting solar panels on my roof. Will the new law make it cheaper?
It could. Details of what kinds of incentives utilities will offer consumers haven't been released yet because the law is so new. Supporters of the law argue that boosting solar production and investment will make solar energy cheaper overall.
Prices for solar energy have dropped dramatically in recent years. In some places, solar-generated electricity has become as inexpensive as conventional electricity during peak times, such as on hot summer days when many homes are running air conditioners.
How much will it cost to participate in a community solar garden?
The details of the community solar installations are still being worked out. One community project led by the Wright-Hennepin Cooperative Electric Association allows its members to pay $869 to buy a solar panel that produces about 25 kilowatt hours a month. That's not enough to power a home, but members can buy more than one panel, or they can receive a discount on their utility bill for the power generated by the one panel. At another community solar project that Applied Energy Innovations is developing on a building on Lake Street in Minneapolis, subscribers are expected to pay about $1,800 upfront to participate. Then they will pay for the electricity they use.
