New Minnesota law boosts solar industry

Minnesota’s private utilities will be required to include 1.5% of their power from solar energy by 2020 under a new law signed by Gov. Mark Dayton last week.

The energy law will boost solar generation thirtyfold by the end of the decade, resulting in more than 450 MW of solar power and provide an immense boost to the U.S. state’s photovoltaic industry. The law also sets a non-mandatory goal of reaching 10% by 2030.

The state’s legislature approved the Solar Energy Jobs Act as part of a larger, omnibus economic development bill last week before Dayton signed it into law.

Proponents of the law say it will not only make solar energy cheaper and more accessible for consumers but also create jobs.

"It’s important for people to understand that while 1.5% seems like a low number, it’s in a relatively short timeframe and it’s actually a fairly significant amount of solar deployment," Lynn Hinkle, policy director for the Minnesota Solar Energy Industries Association, told news site Midwest Energy News.

Private utilities had opposed the mandate, arguing that solar remains an expensive technology and cannot compete with low-cost wind and natural gas-fired generation.

"It doesn’t mean that we don’t support renewables, but at least today, solar is quite a bit more expensive than other alternatives," Ben Fowke, CEO of Minneapolis-based Xcel Energy, told Minneapolis newspaper Star Tribune.

Xcel, Minnesota’s largest company, is one of four private power companies in the state that are subject to the mandate.

Municipal utilities and rural electric power cooperatives, which provide nearly half of the state’s electricity, are exempt from law as are mining and paper industries.

The law also creates incentives for homeowners and businesses to install rooftop photovoltaic panels, increases subsidies for solar equipment made in Minnesota, encourages residents to invest in shared systems, or “solar gardens” and makes it easier to develop large photovoltaic projects and creates a reimbursement rate for rooftop systems.

The legislation is expected to pave the way for large-scale projects for local renewable power players such as Geronimo Energy, which is looking to build photovoltaic plants near Xcel substations.

"We firmly believe that the way solar prices have come down, solar is a competitive capacity resource," said Geronimo Vice President Betsy Engelking, speaking to the Star Tribune.

The legislation, which complements the state’s existing mandate for 25% renewable energy by 2025, is expected to lead to the creation of between 1,500 and 2,000 new jobs. There are currently more than 100 solar companies based in Minnesota, according to the Minnesota Solar Industries Association.