Xcel asks for changes in solar garden rules

Worried about the potential size and cost of large community solar gardens, Xcel Energy Inc. is asking state regulators to change rules even before the first project is built.

Solar industry officials are pushing back, arguing that it's too early to revise the program, which was authorized under a 2013 state energy law with the aim of offering solar power to people and businesses without the need for rooftop panels.

"The industry depends on clear expectations as to what the rules are going to be," said Chris O'Brien, a Minneapolis-based solar industry consultant who estimated that the solar gardens now proposed in Minnesota represent $1 billion in potential investment.

Energy developers have proposed large, centrally located solar arrays whose electricity would be shared by Xcel's Minnesota customers who sign up as solar subscribers. More than 400 solar garden projects, each with the output of 1 million watts, have been proposed since Xcel opened applications in December. None have been approved yet.

Many of the solar gardens, which need seven to eight acres each to install ground-mounted panels, are being proposed adjacent to each other, making them more like solar plantations. In Monticello, for example, Sunrise Energy Ventures has proposed fifty 1-million-watt solar gardens on the 600-acre former Silver Spring golf course.

Xcel says such vast projects are utility-scale ventures that should be competitively bid, as the utility did recently for its first big solar investments in Minnesota. Competitive bidding, the utility asserts, would reduce the cost to Xcel customers, who subsidize the community solar program through higher rates overall. Xcel estimates Minnesota customers' bills could increase up to 1.8 percent to pay for the solar gardens, whose energy is sold at above retail prices.

In a regulatory filing this week, Xcel asked the Minnesota Public Utilities Commission, which oversees the state-mandated program, to revise the rules so that an energy developer can't build multiple solar gardens adjacent to each other. Aakash Chandarana, Xcel regional vice president of rates and regulatory affairs, said this change would improve the "value proposition" for customers.

"It is really important to get the size and the cost right," Chandarana said in an interview.

Under such a change, about 80 megawatts of solar gardens would be eligible for approval from the more than 400 megawatts proposed, Xcel has estimated. One megawatt is 1 million watts.

The state Commerce Department, which plays a key role in solar development, recommended that regulators allow a single developer to build 10 megawatts per site, or 10 adjacent 1-megawatt solar gardens in one location. The PUC has not said when it will act on the issue and could decide to take no action.

Xcel, the state's largest utility with 1.2 million electric customers, is the only power company mandated by state law to offer solar gardens. The company, which has endorsed the program, has a similar effort in its Colorado service region. Some Minnesota power cooperatives have built smaller solar gardens.

O'Brien, president of Clean World Strategies and a member of the board of the St. Paul nonprofit advocacy group Fresh Energy, said Xcel's proposed change "sends an unsettling signal to the investment community." He said it isn't fair to compare utility-scale solar to consumer-driven projects, and that any changes to the state program should only affect future projects, not those already in the pipeline.

Dean Leischow, managing director of Sunrise Energy Ventures, which proposed the Monticello project, said it makes economic sense to co-locate solar gardens. The capacity of the power grid will be a determining factor in how much solar can be installed at any single location, he said. Xcel reviews each application for such engineering issues.

Leischow said his Minnetonka-based company is focused on signing up local businesses, governments and institutions as solar subscribers. He said the company is willing to work with the city of Monticello, which also raised concerns about the project's size.

"At the end of the day, after everyone has said their piece, this is going to be a very successful program for the state of Minnesota," he said.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib