Minnesota solar developers fault Xcel for delays in their projects

Minnesota solar-energy developers said their proposed projects — from rooftop arrays to community solar gardens — are suffering long delays at the hands of Xcel Energy, hurting customers and investors alike.

One solar developer has filed more than 120 complaints with state public utility regulators against Xcel, which could lead to a $1 million fine against the state's largest electric utility. Xcel, while acknowledging some holdups, is contesting the fine.

The quarrel stems from a 2019 standard that Xcel, the solar industry and clean-energy groups all hoped would improve the state's "interconnection" process.

Developers said Xcel's management of the process has led to monthslong delays in getting projects connected to the electricity grid.

"It's been pretty abysmal," said David Shaffer, executive director of the Minnesota Solar Energy Industries Association. In some instances, "customers have dropped projects."

Xcel rejects criticism that it is continually slow in moving solar projects along.

"We are largely on time or close to on time," said Kerry Klemm, Xcel's manager of renewable choice programs. "Most projects go very well, but there are some exceptions."

The Minnesota Department of Commerce, which represents consumers in matters before utility regulators, in a regulatory filing agreed with developers that Xcel "botched" the rollout of the new interconnection process.

Minnesota has three main types of solar power: large projects contracted directly with big utilities; smaller "community solar gardens" created by independent developers; and even smaller individual residential and commercial arrays, often on rooftops.

Xcel administers the state-mandated Community Solar Garden program, which consists of over 300 projects that together generate the majority of the state's solar power.

"There is a lot of [solar power] that we have successfully brought on line," Klemm said.

The addition of each new solar project must be studied for its effects on the overall electric grid. "It's important that we ensure the safety and reliability of everyone who is using the system," Klemm said.

The solar developers' dissatisfaction is rooted in how Xcel is administering the Minnesota Distribution Interconnection Process, which was rolled out in mid-2019. Under the new agreement, the utility is now considering most solar projects one at a time, not simultaneously.

But developers said the amount of time Xcel has devoted to projects at the front of the line of has caused a backup — and thus longer waits — for community solar gardens and new residential and commercial solar arrays.

St. Paul-based Novel Energy Solutions is measuring its solar garden interconnection agreement delays "in years and months, not days or weeks," the developer said in a filing with the Minnesota Public Utilities Commission (PUC).

Novel said it has spent "tens of thousands" of dollars in development costs, along with paying workers' salaries and interest on refundable deposits to Xcel.

"We still have all of our costs, but none of our revenue," the company said.

Michael Allen, president of St. Paul-based All Energy Solar, said "hundreds of our projects" have been delayed by Xcel's management of the new interconnection process, costing the company "well into the six figures."

All Energy Solar is one of the state's largest residential solar installers. In December, it filed 128 PUC complaints on behalf of individual customers against Xcel over interconnection delays, accusing the utility of "systemic failure."

In a recent filing with the PUC, Xcel said that it has since resolved All Energy's complaints.

"They were largely due to glitches in the processing of applications through our online system," Klemm said.

But the delays go beyond All Energy, according to the Minnesota solar association. The industry group said in a PUC filing said that All Energy's complaints "underrepresent the industry's frustration" with Xcel's interconnection practices.

The association pointed to Xcel's most recent quarterly community solar update — filed in July — to illustrate the problem: 80 projects, or 60% of those waiting in Xcel's interconnection queue, are "on hold." That means they are "sitting idly" instead of being studied or developed, according to the group.

Xcel said it has improved the process since July and that the number of community solar-garden projects on hold was roughly 35% on Sept. 2.

Also, Xcel said in recent months it has significantly reduced the time needed to approve interconnection agreements for smaller residential and commercial projects.

The PUC continues to discuss the new interconnection process with Xcel, energy companies and clean-power groups. Meanwhile, All Energy's complaints to the PUC have become an issue in themselves.

The avalanche of complaints hurt Xcel's 2019 "quality of service plan," a report filed annually by Minnesota utilities that chronicles customer beefs with everything from outages to bills.

The grievances from All Energy put Xcel over its allowed threshold of 363 complaints for 2019, which could trigger the $1 million fine.

Xcel argues the complaints should not count toward its service-quality plan; the plan was never intended to include interconnection issues, which have their own review process.

In a PUC filing, the Minnesota Department of Commerce agreed with Xcel, and said there was no indication that Xcel's customers were harmed. The agency recommended against the $1 million fine, though it said Xcel "should be held accountable" for fumbling the rollout of the new interconnection process.

Solar developers disagree that customers weren't harmed and that Xcel shouldn't be fined. The PUC will ultimately decide the issue.

Developers said interconnection delays won't stop until there is some sort of financial penalty.

"There has to be some sort of stick involved to makes sure Xcel does what it is supposed to do," said Shaffer of the solar association.