Wednesday, May 29, 2013

Minn. Solar Mandate Will Jolt Power Companies

by David Shaffer
Minnesota's solar industry is getting a jolt of energy.
It doesn't sound like much -- a requirement that major utilities generate 1.5 percent of their power from the sun by 2020. That's roughly the output of one power plant or wind farm.
Yet the state's new solar standard, signed into law Thursday by Gov. Mark Dayton, will force four investor-owned electric utilities to generate 30 times more solar power than they do today.
Power companies had opposed the mandate, and remain wary of solar's cost, which they say can't 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, said in an interview.
The law also adds fresh incentives for homeowners and businesses to install rooftop solar panels, expands a subsidy for solar equipment made in Minnesota, and allows people who can't put solar panels on their roof to invest in a shared system, or "solar garden." The law also encourages building of larger solar projects and creates a new solar-friendly reimbursement rate for rooftop systems.
Only the state's four investor-owned utilities are subject to the mandate, including Xcel Energy, the largest power company with 1.2 million Minnesota customers, and Duluth-based Minnesota Power, serving the Iron Range. Municipal utilities and co-operative power companies successfully lobbied for an exemption. Mining and paper industries also are exempt.
Large solar arrays
To meet the mandate, the largest power companies must consider building large, utility-scale solar generators that are common in California, the Southwest and other states, like New Jersey, that have solar standards. A 2-megawatt array -- large by solar standards, but equal to the output of just one wind turbine -- can cover nearly eight football fields, said Rick Evans, regional government affairs director for Xcel.
In a sign of what might be coming, Edina-based renewable power developer Geronimo Energy recently proposed 31 large solar arrays in 18 Minnesota counties on properties adjacent to Xcel substations.
Each solar array would be as big as or bigger than the state's largest solar power collector -- the system completed last year in Slayton, 180 miles southwest of Minneapolis.
"We firmly believe that the way solar prices have come down, solar is a competitive capacity resource," said Geronimo Vice President Betsy Engelking.
Like Geronimo, many of the companies that stand to gain from the solar standard are in the wind power industry. They include the two largest U.S. wind energy contractors -- Mortenson Construction of Golden Valley and Blatner Energy of Avon, Minn. -- and EDF Renewable Energy, the state's largest wind power developer whose Midwest office is in Minneapolis.
All three have built large solar arrays in other states, and Mortenson is constructing the world's largest solar-photovoltaic system in California, said Trent Mostaert, manager of the company's solar and emerging renewables group. He said Mortenson probably will add solar training programs for electricians and other workers who will build solar projects in Minnesota.
Blattner Energy, which rivals Mortenson in the number of renewable energy