05/13/2015 P&Z Packet - Laserfiche WebLink

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HOUSE RESEARCH Short Subjects Bob Eleff August 2013 2013 Solar Energy Legislation in Minnesota In 2013, the Minnesota Legislature enacted a bill that contained several provisions designed to promote the growth of solar energy (Laws 2013, ch. 85). These provisions are summarized below. 1.5 Percent Solar Minn. Stat. § 216B.1691, subd. 2£ A new law requires Minnesota's public utilities Energy Standard to generate or procure sufficient electricity from solar sources so that by the end of for Public Utilities 2020, at least 1.5 percent of the utility's retail electricity sales in the state are produced from solar energy. (In computing its standard, a utility must exclude retail sales to iron mining and processing facilities, paper mills, sawmills, and wood product manufacturers.) At least 10 percent of this energy must be generated by facilities with a capacity of 20 kilowatts or less. Public utilities must comply with this solar standard in addition to fulfilling the existing Renewable Energy Standard, which requires that at least 20 percent of electricity sales originate from renewable energy sources by 2020, and 25 percent by 2025 (for Xcel Energy, these percentages are 25 and 30, respectively.). The state's public utilities are Xcel Energy, Minnesota Power, Otter Tail Power, Alliant Energy Interstate Power and Light, and Northwestern Wisconsin Electric Company. These utilities collectively account for two-thirds of the state's retail electricity sales. Analysts estimate that compliance with the standard will increase solar capacity in the state by a factor of 30 from 2013 levels. Solar Energy May Minn. Stat. § 216B.164, subd. 10. The 2013 legislation gives public utilities a new Be Reimbursed at a option for paying solar generators for electricity sold to the utility in excess of the New "Value of generator's consumption. Prior to the new law, generators were reimbursed at a Solar" Rate rate they selected, based on either the utility's avoided costs as set by the Minnesota Public Utilities Commission (PUC) or the utility's average retail rate. Under the new law, a utility may choose to pay generators a price that reflects the value that solar energy represents to the utility, incorporating savings that accrue from avoiding construction of new power plants and transmission lines, reducing transmission and distribution line losses, etc. The PUC will establish a generic method that public utilities must use to annually calculate this "value of solar" rate, which, for the first three years, cannot be below the utility's average retail rate. Xcel Energy's Solar Minn. Stat. § 116C.7792. Beginning in 2014, Xcel Energy, which accounts for Incentive Program approximately half of Minnesota's retail electricity sales, must provide $5 million in financial incentives annually for five years to promote the installation of solar energy systems in its service area. Eligible systems must have a capacity of 20 kilowatts or less that generate no more than 120 percent of the customer's onsite annual electricity consumption. The incentive is paid for a period of ten years.