Minnesota's community solar program provides benefits to consumers and the climate that far outweigh its costs. But it's hard to see those benefits through the Xcel Energy perspective that dominates ("Rising solar garden costs spur debate," Nov. 30).
To understand the ongoing attacks on one of the nation's most successful community solar programs, reducing the energy bills of over 25,000 Minnesota participants, we need to first understand the utility's perspective. Xcel Energy produced the forecast of the program's costs. Xcel Energy also makes its money primarily from building and owning power plants and power lines. In an analysis shared by the Institute for Local Self-Reliance in 2019, they estimated that if the 500 megawatts of community solar then in operation had been owned by Xcel instead, its shareholders would have earned over $100 million.
It's logical for Xcel Energy to prefer shareholder rewards over widespread solar ownership, but it means we have to take the company's allegations about the program's cost with a grain of salt.
And we should be skeptical of utility estimates of the costs and benefits of community solar. Earlier this year, the Institute for Local Self-Reliance published a robust analysis of solar costs to Minnesota ratepayers and found that the costs of utility-scale solar and community solar are almost exactly the same. Big utilities like Xcel talk around this truth by comparing community solar electricity — produced and delivered close to consumers — to wholesale power that is delivered to the regional transmission grid. That wholesale energy is often not pollution-free, its price is not guaranteed, and it requires additional costs to deliver to consumers.
As a leader from the state's Department of Commerce said in a Legislative Energy Commission hearing two weeks ago, "it's like comparing apples to apple pie." Xcel knows that solar is a tasty and affordable treat at any scale, but it prefers you buy the pie from them.
By leading with a misleading discussion of costs, it seems Xcel doesn't want you to know that the community solar program delivers big benefits. Community solar alone provides approximately 3% of Xcel Energy's sales annually, 100% pollution-free. Over 25,000 residential subscribers are reducing their energy bills. Hundreds of cities, towns and school districts are freeing up more than $1 million annually for valuable public services. Thousands of workers have good-paying jobs in Minnesota's growing solar industry. Pollinator-friendly plants have been planted on hundreds of acres around the projects' solar panels.
In a 2019 analysis of the program, the Institute for Local Self-Reliance and co-authors found that, among these other benefits, Minnesota landowners playing host to community solar would earn $182 million in leases and royalties over the next 25 years.
Seeing this story about community solar costs feels particularly frustrating in light of the Legislature's passage of reforms just last session, ones designed to address these concerns. Changes include caps on the program, reductions in compensation for projects serving businesses, and much greater access for low-income and ordinary residential participants. The bill ensured community solar would play a reasonable and meaningful role in the state's efforts to reduce carbon emissions from the sale of electricity, with significant benefits. Investor-owned utilities like Xcel had their say. After all, they employ one registered lobbyist for every two legislators.
Xcel might prefer to own solar in Minnesota, but with 45% of the state's electricity still generated by polluting coal and gas, the truth is we need every clean electron we can get. Leaders in the Legislature already listened to the utility's complaints about community solar, and the 2023 reforms to the program struck a balance between the interests of solar companies, the utility and consumers.
Minnesota needs all the solar we can get — and community solar should play a key role in spreading the benefits of that effort, no matter how Xcel shareholders feel about it.
John Farrell directs the Energy Democracy Initiative at the Institute for Local Self-Reliance.