In a nationwide first that could be a model for other states, the Minnesota Public Utilities Commission (PUC) set aside divisive debates on subsidies and incentives, approving a statewide “Value of Solar” methodology that more accurately calculates the net value of solar power to the energy grid. This is the culmination of two years of work by the League and our allies to engage utilities and stakeholders in overcoming hurdles to greater adoption of solar energy in the state.

In 2013, the Minnesota legislature adopted a state standard for utilities to have 1.5 percent of their energy come from solar by 2020. Simultaneously, the Minnesota Department of Commerce’s energy division was charged with developing a rigorous methodology incorporating, at a minimum, the value of solar power’s energy and the related net benefits to the system, including avoided costs for future power plants and transmission wires, more efficient use of the grid, and reduced pollution and other environmental impacts. Building on our engagement since the introduction of the policy, the League attended all four public workshops in 2013, spoke on one of the workshop panels, and submitted comments each step of the way.

This all came to a conclusion March 12, 2014. The Public Utilities Commission reviewed the work done by the Department of Commerce’s energy division and heard oral arguments from the League, utilities, businesses, the solar industry, the public, and other stakeholders. The commission then adopted the nation’s first state-wide methodology for calculating the “Value of Solar.” This is an objective way to ensure customers (homeowners and business owners) who install solar panels on their property are fairly compensated for the energy their systems generate. It also ensures that utilities and other customers accurately pay for the benefits this solar energy provides.

The League will continue to be involved as Minnesota utilities begin to adopt the “Value of Solar” methodology and determine the exact value of solar power for their customers. Additionally, this “value” will be updated annually, ensuring it adjusts as costs and benefits increase or decrease over time. It may also be required by the PUC for use with community solar gardens (larger, centralized installations that utility customers can buy into and then receive a credit for the energy that solar garden produces). It’s a positive step that directly links the benefits and financial costs while fairly compensating those customers that invest and help add solar to the grid.