When the window went up for Xcel Energy's Solar*Rewards Community program on Dec. 12, 2014, it didn't take long for the applications to come flooding in. Less than a month later, the utility had received over 400 applications representing over 430 MW from developers seeking to build solar gardens under the program.
According to a document filed with the Minnesota Public Utilities Commission (PUC), most projects propose a series of adjacently sited gardens clustered into 75 separate sites. The largest project proposes 40 MW of adjacently sited gardens.
The community solar gardens program is an outgrowth of the so-called Solar Energy Jobs Act signed into law by Gov. Mark Dayton in 2013. The act was intended to enable customers who could not or did not care to host photovoltaic energy systems to still benefit from solar-generated electricity.
The program is attracting interest from developers and engineering, procurement and construction (EPC) firms throughout North America, in addition to sparking a new business in the region.
Colorado-based SunShare and Minnesota-based construction firm Mortenson have formed a partnership to develop and build solar gardens in Minnesota. The deal comes in the wake of Xcel Energy's announcement to more than double its renewable energy by 2030, including adding 2.4 GW of new solar capacity.
‘More and more of our customers are looking for affordable solar solutions, and the partnership with SunShare to build community solar gardens fits this growing need exceptionally well,’ says Trent Mostaert vice president and general manager for Mortenson's solar and emerging renewables groups.
Mortenson will serve as the EPC contractor, while SunShare will develop, finance and own the solar gardens. The latter will also sign up energy users for the program. Such customers may purchase a community solar garden subscription from SunShare and will then receive credits on their Xcel Energy bills during the contract term.
Dana Hallstrom, subscription manager for MN Community Solar LLC, says her company's business model was developed to take advantage of the opportunities the law offered.
‘Our staff and ownership played a role in getting the legislation written for the act that allows for community solar in Minnesota,’ Hallstrom says. ‘We also put many of our resources into submitting written comments and providing testimony during the PUC's hearings throughout 2014. We also have projects fully reserved and ready to be constructed this spring, as soon as the weather permits.’
Jon Miller, utility program manager for San Luis Obispo, Calif.-based REC Solar, says that although commercial solar is his company's core competency and will remain so, community solar programs dovetail nicely with that competency because of their scale and economics.
‘I keep an eye on all of the utility-type programs that are looking at smaller projects like these community solar programs,’ Miller says. ‘It was natural for me to go up and check out Minnesota's program to see what is going on up there. And it's a good program.’
According to Miller, community solar programs are attractive to REC Solar because they are almost always bite-sized systems that are easier to develop. In terms of the permitting progress, the sites are generally 20 to 30 acres rather than the 150 to 500 acres of large-scale utility PV plants. Moreover, community solar projects tend to fit into the distribution system rather than the transmission lines.
‘You are fitting these projects into the communities they serve so they are more meaningful to the communities,’ Miller says. ‘Customers know that when they are buying a piece of one of these arrays that they can drive by and see if they want to.’
Ultimately, Miller expects the community solar approach to form an ever-expanding market between the venerable residential and utility-scale segments. Importantly, the economics of such projects fit with utilities' business models and experience base, meaning that community solar should evolve rapidly, particularly if Xcel Energy is successful with its program.
‘This is something that a utility can look at and they understand how to deal with subscribers – long-term subscribers,’ Miller says. ‘They deal with that every day. That's their business.’
Like all new businesses, Xcel Energy's Solar*Rewards Community still has some hurdles to overcome. Sara Bergan, an energy law attorney in the Minneapolis office of Stoel Rives LLP, says concerns have been raised over the process the utility uses to process the applications it receives. In particular, certain existing programs that had been filed with Xcel Energy under a Section 10 interconnection tariff have been recast as proposed community solar garden projects, giving them a leg up over the competition in the interconnection study queue.
The PUC is meeting later this week to consider the application process.