Thanks to consumer-friendly legislation, the Minnesota community solar industry gained serious momentum in 2017 and 2018, and it’s expected to grow exponentially in the years to come. For Minnesotans looking to take advantage of solar power without installing a solar energy system on your property, the options are promising.
Minnesota community solar overview
Minnesota is home to one of the best community solar environments in the U.S. In the fall of 2018, there were 134 community solar gardens in the state, equal to 445 megawatts (MW) of capacity, and strong growth projected for the future. Over 80% of the subscriptions are residential, but commercial properties make up the majority of the community solar capacity.
Minnesota community solar legislation
In 2013, Minnesota’s biggest utility, Xcel Energy, began a new community solar program following the passage of a wide-ranging solar bill that set state solar standards and production incentives. The program, dubbed “Community Solar Gardens”, works as follows:
- Solar developers can partner with Xcel Energy to build solar projects that are 1 megawatt (MW) or less, and Xcel Energy receives the output once completed
- The solar project developer signs up subscribers in the same or adjacent county to the project location. A single subscriber can’t have more than 40 percent share of a project or sign up for greater than 120 percent of their average electricity use.
- Subscribers get credits on their electric bill, similar to net metering, with a renewable energy credit (REC) if Xcel is receiving the energy produced
In June of 2015 Xcel Energy and solar developers agreed to increase the size limit for connected projects to 5 MW, boosting the ability of developers to reach more subscribers.
In 2018, the Minnesota Public Utilities Commission (PUC) approved a residential community solar incentive of 1.5 cents per kilowatt-hour (kWh) for 2019 and 2020, designed to shift the community solar subscriber base more towards residential homeowners.
Xcel Energy Community Solar Gardens program
Xcel Energy is the biggest utility in Minnesota, covering most of the population, and is the only utility that has a legislation-backed community solar program. The Community Solar Gardens (CSG) program is available to any electric customer of Xcel Energy.
How the CSG program works
Xcel’s CSG program starts with solar developers (SunShare is one example) who register solar gardens, facilitate construction and permitting, and sign up subscribers. Subscribers pay the community solar provider in exchange for a share of the energy they produce.
The electricity generated by the solar garden is fed into the Xcel Energy grid, and you receive bill credits for the amount of electricity from your subscription. Xcel buys energy at a premium from developers, and that premium is transferred to consumers in the form of a few percentage points of savings. If you use more energy than is provided by your share, you pay the difference at the retail electricity rate. Xcel buys energy at a premium from developers, and that premium is transferred to consumers in the form of a few percentage points of savings.
Contract options
As a CSG subscriber, you are required to follow a subscription model for your solar purchase. There are two types of subscription agreements you can enter with, and different solar developers may offer one or both options. In general, subscription contracts last between 20 and 25 years.
- Pay-as-you-go: In this subscription option, you pay monthly for the energy produced by a certain fixed portion of a solar garden that you sign up for.
- Upfront subscription: In this model, you pay upfront for your subscription and get energy for the length of your subscription agreement without monthly payments.
You can use EnergySage’s Community Solar Marketplace to find community solar projects from solar developers and determine which projects are available in your area.
Minnesota community solar: other options
While Xcel’s CSG program is the only community solar program in Minnesota created through legislation, there are other options for customers who don’t use Xcel Energy as their electric provider.
Electric cooperatives
If you don’t live within Xcel Energy’s service area, you may be able to join a community solar project through an electric cooperative. These types of agreements can involve both ownership and subscription models, and offer consumers the chance to save money while supporting clean energy development.
National community solar
One unique option for community solar is to work with a national provider like Arcadia Power. With a national provider like Arcadia, you can purchase panels in a project at any location and get credit on your electricity bill.
Community solar vs. rooftop solar in Minnesota
Choosing to power your home through a community solar subscription in Minnesota is a solid option, even when compared to rooftop solar. However, there are still a few differences between rooftop and community solar to consider when comparing the two.
Minnesota solar incentives
Minnesota has several incentives for installing solar on your property that make rooftop solar an enticing alternative to community solar. In addition to the federal Investment Tax Credit (ITC) that reduces your solar energy system installation costs by 30 percent, Minnesota has exempted solar equipment from sales tax. Residents with solar installations also benefit from net metering, which offers bill credits for energy produced and sent back to the grid.
There are even more programs for specific utilities in the state. One example is Xcel Energy’s Solar Rewards incentive program. This program reopens for applications in early 2018, and offers $0.08 per kWh produced by the system to help offset the cost of installation.
Maintenance costs
Depending on what type of solar warranties are available for your rooftop solar installation, subscribing to a community solar project generally eliminates panel maintenance and repair costs. In most community solar projects, the project developer is responsible for upkeep on their array. In some situations, damage to your rooftop solar system may lead to extra costs, especially if you are over your warranty time period. Most solar warranties will cover all the damage your system might see, but in some rare cases you might save money on maintenance by choosing to subscribe to a community solar project.
Home value
One benefit of installing rooftop solar that you cannot get through a community solar project is the added home value incurred from having your own solar array. Installing panels on your roof ensures that any future owner of your property can produce clean, free electricity, which makes your home a desirable option for prospective buyers and boosts your home’s value.
Use EnergySage to find the right solar option for your home
Both community solar and rooftop solar are clean, sustainable energy options. Deciding which solar option is best for you depends on many factors, including location, pricing, and personal preference.
If you want to explore community solar options near you, the EnergySage Community Solar Marketplace is a great way to explore what options you might have in your state. If you decide that you want to have your own solar array, the EnergySage Solar Marketplace is the best way to solicit quotes for rooftop solar from pre-vetted, qualified solar installers.
