Minnesota solar power gets new boost from lawmakers

Minnesota could soon take another step ahead in the transition to renewable energy.

Minnesota utilities already are replacing coal-fired power plants with windmills, prompted by the state's landmark 2007 Next Generation Energy Act. Partly as a result, the state has a healthy wind power industry.

To continue the renewable energy effort, state legislators have introduced bills in the House and Senate that would increase the use of solar systems in homes and businesses.

"There are lots of folks, businesses in Minnesota that are eager to get going on this but they need a little boost right now," said Sen. John Marty, DFL-Roseville, chair of the Senate Energy and Environment Committee. "And the faster we make the solar industry start growing in Minnesota, the faster the prices fall."

Marty's bill and a companion bill in the House would require utilities to produce gradually-increasing amounts of solar power. The House bill still has the original goal of four-percent solar by 2025. In the Senate, it's been whittled down to one-percent.

Utility company officials are leery of the requirements, and contend they could be costly and unfair to ratepayers. Here's a comparison of the House and Senate bills

A TIME FOR SOLAR?
Bills in the Minnesota House and Senate aim to increase the use of solar systems in homes and businesses. Here's how they would work:

HF 956, House Omnibus Energy Bill
• Requires investor-owned utilities to provide at least 0.5 percent of its power through solar electricity by the end of 2016; 2 percent by late 2020; and 4 percent by late 2025.
• Requires investor-owned utilities to invest 1-1/3 percent of their annual retail sales in subsidies for homeowners and businesses to install small solar systems.
• Requires the Department of Commerce to calculate a "value of solar," which would determine how much utilities would pay small producers. The amount would be adjusted annually.
• The bill also would offer incentives to owners of solar equipment made in Minnesota.
SF 901, Senate Omnibus Energy Bill
• Requires investor-owned utilities to provide at least 1 percent solar electricity by the end of the year 2025.
• Requires investor-owned utilities to invest 1-1/3 percent of their annual retail sales in subsidies for homeowners and businesses to install small solar systems.
• Requires the Department of Commerce to calculate a "value of solar," which would determine how much utilities would pay small producers. The amount would be adjusted annually.
• Offers additional incentives to owners of solar equipment made in Minnesota.
• The Senate bill exempts "mineral extraction and processing operation facilities" and "wood products processing facilities" from the solar mandate. In effect, this reduces the amount required for Minnesota Power.

State Rep. Rep. Melissa Hortman, the author of the House bill, told the Ways and Means committee last week the bill tries to balance the current and future costs of solar.

"Yes, it's more expensive to install this capital up front, but it decreases cost in other ways," said Hortman, DFL-Brooklyn Park. "For one thing, we know what the price of solar energy will be thirty years from now; we don't know what the price of natural gas will be, we don't know what the price of coal will be."

Hortman said solar panels will help utilities by producing a lot of power on summer afternoons when people crank up their air conditioners.

Representatives of the state's investor-owned utilities, however, say solar electricity is still more expensive than other forms of power, and their customers shouldn't be required to buy it.

Rick Evans, Xcel Energy's director of regional government affairs, told legislators that the bill is unfair because it requires people who don't have solar panels to subsidize people who do have them. He said a family or business that lowers its electric bill by generating some of its own electricity is still using the system's essential infrastructure.

"All of the wires, all of the poles, all the infrastructure right back to the generation source are also included in those kilowatt hour charges," Evans said. "And if they're not going to pay for all the kilowatt hours that they were before, then their neighbors who don't have a solar panel, who can't afford to put one up, are going to have to pick up the slack."

Evans is negotiating with the bills' authors to figure out a way to fix that.

Rural electric coops and city-owned power companies also say a solar mandate would be much too expensive. But the bills' authors exempted coops and municipal utilities from the requirements.

Joel Johnson, director of government affairs for the Minnesota Rural Electric Association, said coops are still absorbing the costs of the 2007 renewable mandates.

"Electric coops are very long on generation right now," Johnson said. "And when you mandate a utility to build and increase their generation when they already have more than their customers or in our case their members can use, it starts getting really expensive."

Others have raised the issue of fairness, as the Senate bill exempts some industries but not others.

Iron mining and paper mills, which use a lot of electricity, successfully lobbied to be excluded, which dramatically reduces Minnesota Power's obligation to invest in solar.

But other industries, such as oil refineries, also use a lot of power. But so far they are not exempt from the bill's requirements.

Marty said he's frustrated with how much he's had to compromise to move his bill forward.

"Whatever we do this year, no matter how bold we try to be," he said, "I think the next generation in 15 or 20 years are going to be looking back and saying, 'you saw all the signs of what was happening; why were you so timid?' "

Marty said his bill could be strengthened on the Senate floor, where it's expected to be heard early this week, or in conference committee.

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