Xcel seeks to put a brake on large community solar gardens

Minnesota’s largest utility wants to prohibit large large-scale projects comprised of smaller community solar gardens from being built in the state.

Xcel Energy made the formal request in a letter to the Minnesota Public Utilities Commission in a letter Wednesday after raising several concerns last month over the Solar Rewards Community program, which has drawn 431 megawatts (MW) in proposals so far.

The state’s community solar law restricts gardens from being larger than 1 MW but allows multiple projects to be co-located to optimize electric distribution from sites. Several developers proposed multiple 1 MW gardens at one site — Xcel cites one proposal for 50 MW of 1 MW gardens in Monticello, a suburb northwest of Minneapolis.

The PUC does not have to act on Xcel’s suggested course of action. The utility predicts that if the PUC made the changes it suggests that 80 MW of community solar would still be installed in the state. The community solar program would remain among the largest in the country, Xcel contends.

The call to limit co-located applications is unlikely to sway the PUC, said Dustin Denison, president of Minnesota Community Solar and chair of the Minnesota Solar Energy Industries Association.

“I don’t see Xcel having any success with this argument,” he said. “Developers are following the law. We’re not doing anything we’re not supposed to be doing.”

More than 60 of the utility’s largest customers have been contacted by community solar garden developers, the letter said. St. Paul’s housing agency and Ecolab, Inc. are among the first announced large customers of community solar.

“That’s just a drop in the bucket,” said Denison. “I can’t tell you how many [community solar] RFPs (request for proposals) are out there.”

Xcel also complains it is paying developers too much for community solar, which it says will add 1.5 to 1.8 percent to ratepayers’ bills.

“We believe there is a way to strike the right balance between moving forward with community solar garden projects while recognizing that approving utility scale projects at CSG rates is not in the best interest of all of our customers or sustainable over the long-term,” the letter said.

Denison said Xel’s arguments over how much it should pay for solar energy from the gardens has been vetted by the Department of Commerce and others. The program’s costs, as suggested by the utility, have not been validated by other sources, he said.

The utility’s suggested approach includes:

• Processing only applications of 1 MW or less.
• Allowing gardens of more than 1 MW only if they meet certain statutory requirements.
• Allow for co-located applications from a single developer as long as they do not exceed 1 MW in total.
• Allow applications from multiple developers at a co-located site as long no single application exceeds 1 MW.
• Applications would not be processed from a single developer proposing 1 MW gardens connected together at a site to create a utility scale project.
• Applications in the queue would be preserved if any program changes are made.

Much of the remainder the letter argues the legislative intent of community solar gardens was not utility-scale projects. Denison said the arguments are not new and the program should proceed.

“We need to allow these projects to roll out in the fashion they were created and allow developers to move forward,” he said.

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