If you were to look at a map of U.S. solar potential, Minnesota might not leap out at you as the best place to install solar panels. Yet, Minnesota Gov. Mark Dayton recently unveiled an economic development bill that includes several powerful incentives for solar development.
The Minnesota legislation is a prime example of a widespread belief that solar is heading toward wider adoption, creating jobs and reducing emissions along the way. And contrary to popular belief, solar panels succeed in areas that aren’t known for being perpetually sunny.
Take Germany, for example, a country that doesn’t immediately come to mind as a sun-drenched destination. Still, data show that Germany has 1.3 million solar panel systems installed and recently hit a new peak output record of 22.68 gigawatts (GW).
There’s no doubt that one of the main drivers behind solar energy gaining traction in these unexpected areas is the 80% drop in the cost of solar photovoltaic (PV) arrays since 2008. In practice, though, it’s the political will to galvanize around smart, forward-thinking investments that has been more of a factor than the amount of sunshine in a region.
Consider three primary areas of Minnesota’s bill that serve as an ideal example for future solar legislation:
- The state has set a solar standard that requires 1.5% of electricity to come from solar energy by 2020. The law also stipulates that 10 percent of solar projects must be less than 20 kilowatts. This will encourage widespread development of distributed generation across the state, with utilities needing to add about 450 megawatts (MW) of solar power to their portfolio. A particularly interesting aspect of this program is the “Made in Minnesota” provision, which gives incentives for use of locally produced panels, allowing the solar standard to save consumers money while boosting local industry.
- The bill also has a provision for solar communities in which consumers can opt-in to owning a piece of a PV array that can be managed by the utility. These projects have to be under 1 MW and need at least five participants with no one person owning more than 40%. There’s no limit on how many projects can be built, and the ability to be flexible and have several people own a stake in a strategically placed solar garden seems to be a smart move.
- The bill attempts to move away from the traditional energy market, which is designed around coal and gas plants and which doesn’t necessarily treat solar consumers fairly. First, there’s a move away from “net metering,” which fails to pay consumers for excess energy, and instead encourages a system that compensates them fully. Additionally, the “value of solar tariff” tasks the Department of Energy Resources and the Public Utility Commission to determine a price for solar energy that takes into account its benefits, which might include reduced transmission over the grid, resulting in a potential reduction in costs and reduced emissions for coal plants.
Although Minnesota’s legislation paves the way for some exciting solar opportunities, Michael Noble, executive director of Fresh Energy, notes that the transition will be carefully watched.
“What we are doing here with the value of solar tariff is inventing a new pair of suspenders. But we don’t want to get rid of the old 30-year net-metering belt until we know it works. We have to make sure that consumers can finance projects with the revenue streams from their panels first.”
We’re interested to see how this bill changes the solar market in Minnesota — and whether or not it helps influence other solar legislation throughout the country.
In the meantime, we’d love to hear about the solar market in your area. Is it catching on? Why or why not?