Xcel Energy flips switch on new plant, more than doubling solar energy generation in Minnesota

After years of talking and planning, solar energy in Minnesota is finally starting to shine.

Xcel Energy last week flipped the switch on the North Star project in Chisago County, one of the largest solar plants in the Midwest. It by itself more than doubles the state's total solar energy generation.

Also this month, Xcel's promising but much-delayed Community Solar Garden program is rolling out in a significant way. Around 20 megawatts of solar garden power are online, and up to 35 more megawatts are expected to be running by Jan. 1.

Another large project that will feed power to Xcel — called Aurora — has been largely energized since mid-November.

"Solar is taking off in Minnesota, and it's a sign of a lot more to come," said Allen Gleckner, director of energy markets at Fresh Energy, a renewable energy research and advocacy group in St. Paul. "We expect to see hundreds of megawatts built in 2017."

A megawatt is a million watts, and Minnesota had only 43 megawatts of solar energy capacity at the end of third quarter, according to the Solar Energy Industries Association (SEIA), a trade group. SEIA ranked Minnesota a mediocre 31st among states.

By contrast, Massachusetts and New Jersey — two northern states that like Minnesota aren't exactly bathed in sun — had, respectively, 1,328 and 1,878 megawatts online at third quarter's end, according to SEIA data.

"Minnesota has been characterized by a lot of hope for solar in the last couple of years," said Sean Gallagher, SEIA's vice president for state affairs. Over the next five years, SEIA expects Minnesota to add 1,242 megawatts of solar capacity, bringing its ranking up to 17th.

To put those megawatts in perspective, each of Xcel's two big coal-fired power plants in Becker, Minn., has a 682-megawatt capacity, although they can run constantly, while solar power is limited to when the sun is out.

Solar energy still makes up a sliver of overall U.S. electricity production — 1.3 percent — and it's more expensive than energy generated from coal, natural gas or wind.

But solar power has been growing fast as equipment and installation costs keep dropping. A 30 percent federal tax credit on new solar projects — which has been extended through 2019 — also has been critical. The current solar boom in Minnesota is driven as well by a state law requiring investor-owned utilities to get 1.5 percent of their power from solar by 2020.

In Minnesota at the end of the third quarter, the majority of solar generation — 28 percent — came from commercial projects, everything from the solar plant at Minneapolis-St. Paul International Airport to solar arrays on the roofs of retail outlets like Ikea and Target. Another 10 megawatts in Minnesota is residential — rooftop solar, essentially.

The state's first large-scale "utility" solar undertaking — the 100-megawatt North Star Solar Project — began commercial operation on Wednesday.

"It's very exciting to see a field full of 440,000 solar panels," said Chris Clark, Xcel's president for Minnesota. Minneapolis-based Xcel is Minnesota's largest electric utility.

The North Star plant, a $180 million investment, is spread over 1,000 acres and will supply electricity to more than 20,000 homes. North Star is managed by D.E. Shaw Renewable Investments, which is selling power to Xcel under a 25-year contract.

North Star is one of three large "utility-scale" solar projects aimed at supplying electricity to Xcel under long-term deals. Another utility-scale project — owned by Florida-based NextEra Energy and located near Marshall — is slated to come online next month with 62 megawatts of power.

Then there is the $290 million Aurora solar project, which will generate 100 megawatts of power spread across 16 sites. Aurora, owned by Enel Green Power North America, began the process of coming online in November. Of the 16 sites, 14 have been energized: They are connected to the grid and are at least testing power production.

Utility-scale projects benefit from economies of scale, producing electricity that Xcel said costs 7.5 to 8.5 cents per kilowatt hour. Community solar gardens, which even in clusters aren't usually bigger than 5 megawatts, cost Xcel 11.7 to 15.5 cents per kilowatt hour.

The Community Solar Garden program was created by the state Legislature in 2013 and launched two years ago. It's aimed at bringing the sun's energy to residents and businesses who don't want the expense and complications of building their own solar arrays.

Instead, they subscribe to the solar gardens, which are built and run by independent solar companies that connect to Xcel's grid.

Minnesota's solar garden program has been hailed as one of the nation's most ambitious, but it has been mired in delays caused by everything from an unexpected torrent of applications to grid connection disputes between Xcel and project developers. Also, local governments have curtailed or slowed down some solar developments, as constituents voiced opposition over aesthetics and other land use issues.

"It's not like plugging in a toaster," said Lee Gabler, Xcel's senior director for customer strategy and solutions.

By July 2016, less than 1 megawatt of community solar power was online, while applications for over 800 megawatts were still being processed by Xcel. Still, Xcel was confident then that 200 megawatts of solar garden power would be running by year's end.

By Dec. 1, though, the tally remained less than 1 megawatt. Finally, some sizable community solar projects have gone online this month, with more to come in early 2017.

For instance, a cluster of solar gardens with 5 megawatts of capacity is slated to open in Carver County by Jan. 1. Developed by Denver-based SunShare, it will serve 700 residential customers and one business — Bongards' Creameries. It's located on 43 acres owned by Bongards.

"We had hoped to have more projects online [by now]," said David Amster-Olszewski, SunShare's CEO. "But what we have seen from Xcel in the last three months is that they have been making a hard push to get these projects up and running."

SunShare, which is developing several solar garden projects in Minnesota, expects to switch on a second one near Cold Spring in January. Another community solar developer, Edina-based Geronimo Energy, plans to bring online 25 to 30 megawatts of generation in the next few weeks.

And New Jersey-based NRG Energy, has eight projects under construction with 37 megawatts of capacity that will begin producing power in the first quarter. Those NRG projects in Minnesota count Ecolab, U.S. Bank, Land O'Lakes and Macy's as subscribers.

Xcel's Gabler said he expects that by the end of 2017, the Community Solar Garden program will be generating 400 megawatts of power. That's more than the combined generation of Xcel's three utility-scale projects.

Essentially, after Xcel's utility-scale solar projects are completed, the solar garden initiative is expected to account for Xcel's solar growth in the next few years. In filings with Minnesota utilities regulators, Xcel said it's shooting for 668 megawatts of community solar by 2020.

Despite myriad problems launching the solar garden program, David Shaffer of the Minnesota Solar Energy Industries Association said Xcel's target is realistic.

"I think we will get to around 600 megawatts, I really do."

Mike Hughlett • 612-673-7003