MONTEVIDEO, Minn. - The latest frontier in the solar power industry's growth in Minnesota is found in Chippewa County, where workers are completing the third of three solar garden projects undertaken in the past year.
Berkshire Hathaway Energy, working with Geronimo Energy, is developing the solar gardens as part of Xcel Energy's Solar Rewards Community Program. Legislation approved in 2013 requires Xcel Energy to provide community solar gardens in its service territory.
Workers are completing the Taurus Community Solar Garden on the east side of Montevideo. It consists of three co-located gardens of 1 megawatt each for a total of 3 megawatts, according to Jessi Strawn, director, corporate communications, Berkshire Hathaway Energy.
Just outside of Granite Falls, the company has developed the Crater Community Solar Garden. It also consists of three co-located 1 megawatt solar plants for a total of 3 megawatts of capacity. The company has completed the Centaurus Community Solar Garden north of Maynard consisting of two co-located 1 megawatt solar plants for a total of 2 megawatts, according to information from Berkshire Hathaway Energy.
Each megawatt can power about 1,300 average Minnesota homes, said Randy Fordice, Xcel Energy. He reported that the company offers the country's largest solar garden program with 246 megawatts in service, and more than 400 megawatts of projects in the design or construction phase.
Xcel Energy makes the solar garden energy available to its customers in its service territory, but those customers subscribe to the gardens through contracts with the developers.
The 2013 legislation reflected pent up demand by both business and residential customers for solar energy, according to David Shaffer, policy director with Solar Energy Industries Association, which promotes the solar energy in the state.
The program allows customers to buy solar panels in the gardens, and receive a credit on their electric bills for the power produced by them. Originally, many community solar gardens required customers to pay the upfront costs of a panel, perhaps as much as $8,000, and recoup their investment over time with credits for the electricity produced.
Current programs are more popular, allowing consumers a pay as-you-go option of paying a set amount per month. They are credited for power produced above that amount, and the production is usually projected to pay off the costs in anywhere from 10 to 15 years, he said.
The fixed price for the power from the panels is another incentive for those subscribing to the gardens, said Shaffer. It helps businesses and residential customers hedge against future price spikes.
Not all solar garden programs are alike. Shaffer said many customers subscribing to gardens through Xcel's service network are able to pencil out the costs and benefit financially. But he noted that there are also municipal and rural electric cooperatives offering their own solar garden programs that are not part of the 2013 legislation. Some of these program require consumers to pay money to just be part of solar, and may not provide a financial advantage, he said.
Berkshire Hathaway Energy located the three Chippewa County projects to be part of Xcel Energy's service territory and due to the availability of existing electrical distribution infrastructure, according to the company.
Shaffer said much of the state's solar garden development is occurring in the outer fringe of Xcel's service territory. These are areas where existing electrical substations have the capacity for the added energy, and land costs are more affordable than near large, urban centers.
The economy of scale makes solar gardens less costly per megawatt of power than smaller, rooftop systems. Shaffer said large-scale, utility scale solar farms are the least costly on a per megawatt basis.
Xcel Energy aims to have 10 percent of its electricity generated from solar by 2030.
Two large scale projects- a 100 - acre site near Paynesville and a 37-acre site near Atwater - are among the utility-scale farms producing solar power towards the goal.
Shaffer said solar garden construction will occur in Minnesota through the first half of 2018 as projects launched as part of 2013 legislation come to fruition. Going forward, we may see more site specific projects. "I do believe we'll see a lot more commercial and industrial rooftop solar in Minnesota,'' said Shaffer. "That's kind of the next phase in Minnesota.''
He and others in the industry believe that sometime around 2021-22 we'll see a shift from wind to solar as the least costly energy source.
But there are also concerns about the solar industry's future growth. For one, the Investment Tax Credit of 30 percent could potentially find itself on the chopping block.
He said the industry is also watching how President Donald Trump responds to a recommendation from the International Trade Commission to impose tariffs on solar panels built overseas. If he accepts the recommendations as they are, it will represent a "mild knock on the chin of the solar industry,'' said Shaffer.
If Trump decides to modify the recommendations and ramp up tariffs on solar panels produced overseas, it could cripple the solar industry's growth in the US, warned Shaffer.
Either way, Chippewa County's place in the state's renewable energy field is already assured. Along with the solar gardens, it is also home to Granite Falls Energy, a 65-million gallon a year ethanol plant. Construction is also expected this year on the Palmer Creek Wind Farm. It will consist of 18 turbines with the capacity to produce 44.6 megawatts of electricity.