Community Owned Solar: The Empire (Xcel) Struck Back

The MN Public Utilities Commission (PUC) has gone forward with Xcel's proposal to alter the bill credit rate for subscribers to early community solar projects, with some modifications. The MN PUC also decided on a 3-cent adder for residential subscribers to solar gardens whose bill credits had been covered under the Applicable Retail Rate, which is to last for an indefinite period. The MN PUC also included a 1 cent adder for general service subscribers for one year. These changes are supposed to take effect 4/1/25. The 3-cent adder though, is not enough to make residential subscribers whole and it also no longer shadows the retail rate (what you pay the utility) which eliminates the guarantee of rate savings. The PUC order has not been posted yet but we will include the link when it does. 

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While that makes the outcome not as huge of a loss as it could have been, it still violates the principle of not retroactively modifying rates in the middle of contracts and may put some residential subscribers under water. Because of the uncertainly that creates, the PUC’s ruling will undermine confidence in the market for distributed, as whole, and community solar. Here is why that is shortsighted and not in the public interest. We could meet Minnesota’s 100% renewable electricity by 2040 goals at a quicker pace through community solar than relying upon utility-scale solar projects that take 8-10 years to build and typically run way over budget.


Xcel repeatedly mischaracterizes community solar as being inherently more expensive than utility scale solar, even though customers in fact would pay roughly equal for both. But the cost of utility- owned solar goes into Xcel’s rate base while the cost of community solar is added to the fuel clause portion of our bills. That makes the community solar program easier to cherry pick, single out and blame for broader regulatory and policy failures to keep electricity affordable. The commissioners on Thursday displayed no interest in calling upon anyone to question whether Xcel was inflating their program costs numbers.

In response to claims that community solar raises costs for customers, adding in any new source of energy generation will technically do so, including the 2 new gas peaker plants Xcel still proposes to build (despite their zero carbon pledges and Minnesota’s 2040 law!). If we deploy community solar in a wide variety of locations rather than concentrating solar in fewer locations, then that would undermine Xcel’s predictable claims that 2 new gas peaker plants are needed for reliability. Community Solar could save us from paying much greater costs later. But of course, Xcel receives guaranteed profits from adding new power generation and transmission infrastructure they can own, control and rate base while wanting to curtail competition from non-utility energy producers like community solar.


The Good News, Opportunities and Morale 

The PUC ruling will not effect bill credit rates for newer community solar projects but puts project developers in need of extra support. 

  1. Support Community Solar by signing up to join new projects with Cooperative Energy Futures:
  2. Announcing the People’s Solar Energy Fund ! We now have a loan fund that is structured as a cooperative of BIPOC and low income community organizations working together to build community-led, community-owned solar in their communities.
  3. Together New Orleans wins unanimous vote for Community Solar overhaul Rule changes called “game-changing”; will help thousands save 20% on electric bills each month. Reforms position New Orleans for big influx of federal funding tied to Community Solar

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