Community Solar Access Bill: Legislative Updates

Note: this blog post describes the updates to the Community Solar Access bill that were passed in the 2023 legislative session, measures the Just Solar Coalition have been pushing for for years. To read the story of how the new Community Solar bill was passed, click here.

Minnesota’s community solar program began in 2013, allowing utility customers of Xcel Energy to save money on electric prices by subscribing to a remote solar array providing power to the grid in Xcel energy territory and receiving bill credits from Xcel for the electricity the array generated. While the program has significantly increased the deployment of solar energy in the state, accounting for over 60% of all solar capacity in 2023, and has saved utility customers money across the board, certain rate-design elements meant that the program generally was not directly benefiting those who stood to benefit the most from community solar—low-to-moderate-income residents who need to save money on their utility bills.

Just Solar Coalition member Cooperative Energy Futures has secured a number of progressive reforms to Minnesota’s community solar program in the 2023 legislative session through their legislative work on the Community Solar Access bill (HF 2310), making shared solar energy significantly more accessible for the Minnesotans who need it most. 

Here’s what changed:

Higher compensation for low- to moderate- income residents

Between 2018-2023, different groups of subscribers were compensated at the “value of solar” rate (the rate that theoretically represented the value that distributed solar energy provided to the grid and the environment). Subscribers in all different rate classes – such as residential, commercial, small commercial, and industrial – were all compensated at the same rate. This disincentivized community solar developers to seek out residential subscribers, let alone low- to moderate-income residential subscribers. It was much easier to seek out a few businesses and other well-resourced, “credit-worthy” commercial, industrial or institutional subscribers who could afford to subscribe to a larger chunk of a CSG rather than dozens of residential subscribers since each group received the same compensation. Up to 2023, only 15% of all of Minnesota’s community solar capacity was subscribed to residential subscribers.

The provisions within the new Ccmmunity Solar bill introduced a tiered rate of compensation for different subscriber groups, with LMI residents being compensated the highest. This change re-incentivizes CSG developers to seek out LMI residential subscribers and makes subscribing to a CSG much more appealing to LMI subscribers.

Low- to moderate- income carveout

The new Community Solar bill introduces a 30% low- to moderate-income “carveout,” mandating that at least 30% of each CSG be filled by low- to moderate-income residential subscribers. In this case LMI is defined as 150% of the Area Median Income. This cements the purpose of the program to ensure that the benefits of solar reach regular people.

Furthermore, the bill requires that all new CSGs subscribe 55% of the garden to either residential LMI customers or public benefit customers which are non-profits, state or tribal entities or low-income housing providers. This 55% requirement includes the 30% LMI requirement discussed above.

New program administration

The new Community Solar bill shifts administration of the program from Xcel to the Minnesota Department of Commerce, the state’s consumer protection department. Because Xcel’s financial interests conflict with the community solar program, having Xcel administering the program was severely problematic. Shifting administration to the Department of Commerce will address this misalignment of interest and improve service for community solar developers and subscribers.

No more credit checks

Checking credit scores was standard practice among many CSG developers before 2023. The credit thresholds used by most developers effectively excluded almost half of all Minnesotans whose credit scores weren’t high enough. The Community Solar Access bill now prevents developers from checking credit scores, removing another hurdle for low- to moderate-income utility customers from taking advantage of community solar.

Removal of “contiguous county” rule

The new Community Solar bill eliminated the program’s “contiguous county” rule, which had required that a CSG subscriber live in the same county or an adjacent county to where the CSG was built. Because many CSGs are sited on less expensive land in outlying areas away from the Twin Cities metro area, this caused the grid to become crowded with capacity in the counties that were contiguous to the Twin Cities metro area meaning residents of Hennepin and Ramsey counties were sometimes out of luck. Now, people can subscribe to a CSG anywhere in Xcel Energy’s territory in Minnesota—further opening up the options for residents.

This blog post was authored by Nicholai Jost-Epp, summer 2023 intern at the Just Solar Coalition.