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House Research Department Updated: October 2017
<br />Xcel Energy’s Community Solar Garden Program Page 5
<br />Xcel’s value-of-solar rate for calendar year 2017 was $0.1033 per kWh, and for calendar year
<br />2018 is $0.1006.10
<br />Capacity of Co-located Solar Gardens Will Remain Limited to 1 MW
<br />Xcel’s original plan defined a community garden site as the parcel of real property on which the
<br />solar system was constructed. However, at the suggestion of SunEdison, a global solar energy
<br />company, the commission ordered Xcel to amend that definition to allow a garden site to instead
<br />be based on a point of interconnection (“point of common coupling” is the term eventually
<br />agreed upon) with a utility’s grid, allowing multiple facilities to be installed in close proximity to
<br />one another. As the commission stated, “[T]he operator should be able to install solar panels on
<br />multiple parcels, connect them to grid through a single interconnection point, and take advantage
<br />of the resulting economies of scale.”11
<br />The commission’s decisions regarding co-location and pricing contributed both to the amount
<br />and the nature of the projects proposed by solar garden developers. Xcel began accepting
<br />applications on December 12, 2014, and within a month received applications for 75 projects
<br />totaling 431 MW. Fewer than one-third of these, representing only 4 percent of the total capacity
<br />of all applications, proposed projects at the statutory limit of 1 MW or less. Sixteen proposed
<br />projects, representing 58 percent of the total capacity of those applications, had capacities of 10
<br />MW or greater; the largest project sited 40 MW of gardens adjacent to one another.12
<br />In comments to the commission, Xcel cited four concerns with what the company called these
<br />“utility-scale” projects. First, it stated that larger projects will require improvements to the
<br />company’s distribution system in order to be interconnected to the grid, which could lengthen
<br />interconnection schedules, especially if projects are so large as to require referral to the
<br />interconnection process managed by the Midcontinent Independent System Operator (MISO),
<br />the organization that dispatches electricity to Minnesota and 14 other states and a Canadian
<br />province in the Midwest.13
<br />10 Letter from Lisa R. Peterson, Manager, Regulatory Analysis, Xcel Energy, to Daniel P. Wolf, Executive
<br />Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re: VOS Calculation and
<br />Proposed 2018 VOS Vintage Year Bill Credit Tariff Sheets, Community Solar Garden Program, October 2, 2017, p.
<br />2.In its September 17, 2014 Order, the commission found that Xcel’s value-of-solar rate at that time, $0.1075, was
<br />“significantly below the level needed to support the financing and development of solar gardens as required by the
<br />applicable statute.” Minnesota Public Utilities Commission, In the Matter of the Petition of Northern States Power
<br />Company, dba Xcel Energy, for Approval of Its Proposed Community Solar Garden Program, Docket No. E-002/M-
<br />13-867, Order Approving Solar-Garden Plan With Modifications, September 17, 2014, p. 9. The rapid decline in
<br />the price of solar panels in the intervening two years now allows projects to be financed at an even lower value-of-
<br />solar rate.
<br />11 April 7, 2014 Order, p. 12.
<br />12 Letter from Aakash Chandarana, Regional Vice President, Rates and Regulatory Affairs, Xcel Energy, to
<br />Daniel P. Wolf, Executive Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re:
<br />Supplemental Comments, January 13, 2015, Table 1, p. 4.
<br />13 Letter from Aakash Chandarana, Regional Vice President, Rates and Regulatory Affairs, Xcel Energy, to
<br />Daniel P. Wolf, Executive Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re:
<br />Comments, February 10, 2015, p. 2.
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