State is set to make a big leap into solar

In a major expansion of its commitment to solar power, the Dayton administration is seeking bids for electric power from large shared-solar projects with the aim of reducing costs and the carbon footprint of the Capitol complex and other state government buildings.

Xcel Energy, the largest utility in the state, recently began allowing the projects, called community solar gardens, in Minnesota. Xcel customers now can subscribe to a share of the electricity from a centrally located solar garden, rather than install their own rooftop solar panels.

"Minnesota has been a national leader in the clean energy economy … and this is an important opportunity for the state to be pursuing in its own operations that same clean energy portfolio," said Commissioner Matt Massman of the state Department of Administration, which issued the bid request.

Solar companies are being asked to submit proposals by mid-November to supply more than 11 million watts of electric generating capacity — enough to offset about 30 percent of the power used by the state at 29 locations, including 23 buildings in the State Capitol complex, said Curtis Yoakum, an assistant commissioner of administration.

It is the first time the state has sought to participate in solar gardens.

Hundreds of solar gardens have been proposed by independent energy companies, but only one has been built. The slow rollout has frustrated the program's supporters.

No upfront investment will be required by the state because energy companies plan to finance, build and operate the solar projects, signing up customers for a share of their output for 25 years. The state buildings would still get all of their electricity from Xcel, but the state's share of solar output would be credited to the agencies' electric bills.

To supply the state's request, solar companies will need to offer subscriptions to multiple solar gardens because no single customer can take more than 40 percent of a single project. In its bid request, the state said developers can propose solar gardens on state land in Arden Hills and Rosemount. No rooftop solar bids are being sought.

All the projects are expected to be large, ground-mounted systems, in the same or adjacent county as the state facility.

The solar subscriptions would offset power used at four Corrections Department sites, 10 Military Affairs Department facilities, 12 Department of Natural Resources offices, the Perpich Center and the Capitol-area buildings, according to the bidding documents and state officials.

Whether solar power developers can supply all that electricity is in question. State regulators' decision in June to limit the number of solar gardens per site — a change sought by Xcel — has forced some solar companies to scale down projects and renegotiate deals with large institutional customers.

Among the large customers seeking to go solar under the program are Ecolab Inc., a Fortune 500 company based in St. Paul, Macalester College in St. Paul and St. Olaf College in Northfield. The Metropolitan Council sought bids for 31 communities that wanted shared solar.

In an interview, Massman said he remains hopeful that solar garden capacity is available for the state buildings. "But we are also realistic," he said. The prospect of not enough solar gardens to go around "just speaks to the overall demand," he added.

Solar developers are aiming to complete projects in 2016, because a 30 percent federal solar investment tax credit is scheduled to decline to 10 percent in 2017.

Solar gardens now in the pipeline are anticipating the higher tax credit, and the fate of projects that get delayed beyond 2016 is uncertain.

Under a 2013 state law, the Public Utilities Commission has set solar-friendly rates that virtually guarantee subscribers will save money on their electric bills. The state's savings won't be clear until the bids are received.

Electricity from solar gardens is sold at a state-regulated price that exceeds retail rates. All Xcel ratepayers share that higher cost, which Xcel has said could raise electricity rates by more than 1 percent.

So far only one small solar garden has been built in Xcel's Minnesota region. Some solar industry officials have complained that Xcel's engineering reviews of the projects are going too slowly — a charge Xcel denies.

Several electric cooperatives also offer solar gardens, and Duluth-based Minnesota Power has a solar garden proposal under regulatory review. But state government is seeking bids only under Xcel's program.

David Shaffer • 612-673-7090 @ShafferStrib