minnesota solar

Value of Solar tariff is just one of the state’s leading efforts in appeasing the solar battle

By Jake Rozmaryn and Danielle Kershner

The solar battle between utilities, stakeholders, solar customers and other rate payers is coming to an end—at least in Minnesota. Last Wednesday, the Minnesota Public Utilities Commission (PUC) voted in favor of the nation’s first statewide formula for calculating the value of customer-generated solar power.

Minnesota is the first state to calculate the true “value of solar,” defined by the Commerce Department, which turns out to include more than just electric bill savings. These benefits are calculated to create a tariff for crediting consumers’ bills for solar electricity production. The Value of Solar also considers the cost to society and the environment from carbon emissions and burning fossil fuels. According to Midwest Energy News, the commission voted to adopt the federal government’s social cost of carbon figure, an estimate of how much carbon emissions harm the economy—such as detriment to public health and agricultural output, a rise in sea-level and other damaging effects that stem from carbon pollution and climate change. Jigar Shah calls the tariff, “the future of net metering.”

PUC’s decision to integrate the “value of solar” tariff piggy-backs off of the Solar Energy Jobs Act, signed by Gov. Mark Dayton (D) in 2013. The law requires that utilities obtain at least 1.5 percent of their electricity from solar resources by 2020. According to Fresh Energy, the tariff’s adoption is voluntary, except for Minnesota’s community solar gardens, which will require participants to be reimbursed at the value-of-solar rate.

This latest development in Minnesota’s solar initiative comes after many recent solar incentives made their way to the state.  Made in Minnesota is a PV and thermal incentive program for consumers administered by the Department of Commerce. The program provides $15 million/year of incentives public electric utility customers. Additionally, rebates up to 25 percent off installed systems are available to commercial, multi-family and residential property owners who install Made in Minnesota–certified PV and solar thermal systems. Community Solar, another policy in play in Minnesota, allows homeowners who are unable to go solar due to economic or logistical reasons to take advantage of solar energy incentives.

Next up for Minnesota: third party financing. If Minnesota adopted a third party financing law, homeowners and businesses would be able to go solar without any upfront costs. Minnesota is leading the way for the Midwest and the entire Nation, instituting solar energy policies that will benefit everybody from utilities to solar customers and other rate-payers.

“In theory, everyone is a winner if utilities adopt Minnesota’s market value of solar,” John Farrell of the Institute of Local Self-Reliance said. “In the near term, solar energy producers will get a better price than they have under net metering. In the long term, the cost of solar will fall below the market value, and the 25-year, fixed price contract will help small-scale producers secure financing.”

Adopting these monumental solar policies into law validates Minnesota as a rapidly emerging player in the national solar market. In continuing its efforts, Minnesota will host the Midwest Solar Expo, a day- long conference in downtown Minneapolis on May 16th, which will bring together solar leaders, policy makers and businesses to discuss the latest industry trends and best practices. John Farrell, Jigar Shah, Michael Noble and other industry experts will speak about solar in Minnesota and opportunities throughout the Midwest.

Photo Credit: Minnesota and Solar/shutterstock