Solar garden support: Devil in the details

Minnesota Power's plan to build two new "community solar garden" projects in Duluth later this year will go in front of the Minnesota Public Utilities Commission for approval Thursday.

You might think a plan to allow utility customers to buy into solar electricity would be popular among environmental and social groups.

But not so much.

Announced in September, the two solar gardens along Arrowhead Road are the first big moves by the Duluth-based utility to allow its customers to buy into locally produced solar power - for people who want to see the environmental and social benefits of solar energy but who may not have the space or money to erect their own solar panels.

Customers can choose to subscribe to buy the solar electricity, now at a higher cost, instead of electricity from the utility's combined grid of wind, coal and natural gas. The cost can be locked-in, however, as a hedge against rising prices in the future.

But critics say Minnesota Power is bending state guidelines for community solar gardens to benefit the utility's bottom line and not necessarily benefit community groups as lawmakers intended when the Minnesota Legislature pushed community solar in a 2013 law.

"We love the fact there is going to be more solar, and that more people can participate in more solar,'' said James Hietala, a Duluth Sierra Club member. "But there are parts of this that really go against the intent of solar gardens; that take away from the community benefits you could get if Minnesota Power was proposing a more open, inclusive process."

Dozens of people and several Minnesota environmental groups have filed comments with the PUC, many critical of Minnesota Power's rules for the solar gardens.

Most of the criticism has come over control: Minnesota Power is keeping tight reins on the solar gardens' ownership and enrollment. Environmental and community groups are asking to have control diffused among many local groups.

In Minneapolis, for example, church congregations have proposed building their own solar gardens. The groups set the rules on who can join and for how much. Xcel Energy's primary role is to buy the electricity and connect it to the grid.

Under Minnesota Power's plan, only one pre-selected company will build, own and operate the solar arrays. And Minnesota Power sets the rates and rules.

Critics say the cost subscribers must pay for solar is too high. Minnesota Power's estimated cost of about 11.6 cents per kilowatt hour is "considerably higher than individuals and groups can now build via their own solar arrays," opponents said in a statement. "Minnesota Power's proposal seems more intent on preserving its business model than preserving the environment and building jobs in depressed parts of our city."

"True community solar is of, by and for the people with economic benefits such as less-expensive electricity and jobs staying in the community," they added.

Environmental groups pushed for the community solar gardens to be included as a mandate for utilities in landmark 2013 legislation at the state Capitol. They won that provision for Xcel Energy, but Minnesota Power isn't required to build the gardens.

So far, more than 10 companies are selling community solar to Xcel customers.

Margaret Hodnik, vice president of regulatory and legislative affairs for Minnesota Power, defended the utility's solar garden plans as a good first step.

"It's our first toe in the water. ... If this works out well, we are going to do more,'' Hodnik told the News Tribune.

Hodnik reiterated that Minnesota Power, unlike Xcel, isn't required to do solar gardens but wanted to offer a pilot project in a limited fashion to accompany expanded homeowner, rooftop solar and expanded utility-sized solar arrays.

"There's no one right way to do a solar garden. We wanted to keep the cost down, and keep the cost with the subscriber and not our other customers. ... We're trying to be smart about our customers rates,'' Hodnik added.

Nearly 250 people already have expressed interest in the program. Up to 1,040 would subscribe, depending on what level is picked.

Two projects planned

Under the Minnesota Power proposal, a smaller 40-kilowatt project will be built on land near the utility's Herbert Service Center at Arrowhead and Rice Lake roads. The Duluth-based utility will own and operate that project, called a solar array, that will house 450 thin-film solar panels manufactured by First Solar. The 1.5-acre site also will be restored to a pollinator-friendly habitat of native plants and flowers.

The larger 1-megawatt project will be made up of about 4,375 solar panels and cover up to 8 acres on county-owned land near Arrowhead and Haines roads.

Minneapolis-based solar developer United States Solar Corp. was selected through a competitive bidding process to own and operate the facility and has a contract to sell the electricity to the utility.

According to the Solar Energy Industries Association, 1 megawatt of solar electricity can power about 164 homes.

Both locations will supply electricity for Minnesota Power "solar garden subscribers" and are expected to be generating power by the end of the year.

The solar garden program helps Minnesota Power meet its state-mandated requirement to produce 25 percent of its electricity from renewable sources by 2025 and 1.5 percent from solar energy resources by 2020. It's also part of the company's EnergyForward strategy to achieve a mix of one-third coal, one-third natural gas and one-third renewable energy in coming years.

If the PUC agrees with Minnesota Power's plan, residential and business customers will be able to choose from three options to buy into solar energy: an upfront, one-time payment; a fixed monthly subscription fee; or a fixed charge per kilowatt-hour. All of the options are based on 25-year agreements, but customers have the flexibility to leave the program at any time without penalty.

The cost for residential customers who want to replace their current energy with solar energy, and who typically use about 750 kilowatt-hours a month, will range from about $81 to about $95 a month. That compares to a monthly bill of about $80 under the traditional system.

For more information go to mnpower.com/Environment/CommunitySolar , call (218) 355-3720 or email solarprogram@mnpower.com .