Minnesota now boasts the country’s first attempt to collectively source power from community solar gardens with municipal governments. The results were “modestly successful.”
The difference between this program and others of a similar vein in other parts of the country comes down to cost savings. None have set out to invest in community solar with the goal of saving money.
Minnesota is already home to one of the largest and developed solar markets in the United States – over 100 megawatts are expected to go live in 2017. This “collectively-sourced” project, the Governmental Solar Garden Subscriber Collaborative, is expected to contribute 33 of those megawatts.
The program allows those who do not understand community solar to participate in the market.
However, the amount of solar sold through the program was less than expectations, despite being twice the state’s 2016 solar capacity. Originally, 31 government-related entities had commented that they would purchase 180 megawatts in 2015. The program then received bids for 70 megawatts, until finally they entered a contract for about half of that.
Regardless, every community that did choose to participate, via a 25 year contract, will realize some type of cost savings, anywhere from hundreds of thousands of dollars to over $1 million.
One of the cities that participated in the collaborative was St. Paul, a suburb of Falcon Heights. The city saves approximately $1,000 per year in energy costs as a result. The city has a 40-kilowatt solar array on the roof of the city hall – now they also own 6% of 1 megawatt of solar energy sourced from the group.
Acknowledging the miniscule savings the project is giving his town, the mayor of St. Paul commented that his goal is to encourage solar development throughout the state.
Trevor Drake, a project manager, described the four goals of the collaborative: (1) quicker entry into the solar market; (2) attract better subscription prices via larger purchases; (3) reduce staff time; (4) reduce electricity bill costs.
However, the program had fewer subscriptions than expected, which can be attributed to a variety of reasons.
Firstly, regulators in the state capped how many co-located 1-megawatt solar gardens could be built by a single developer. When these developers began selling co-located land that they bought, fewer options were made available for potential subscribers.
Secondly, the expected phase-out of the federal Investment Tax Credit added confusion to the market, which dissuaded potential investors.
Thirdly, businesses in certain areas – seen as potential subscribers – received few offers from developers. Lack of competition made the market less attractive.
This is in part due to a state requirement, which mandates that community solar project subscribers must be purchasing from their county, or an adjacent one.
The final factor would be cost – many of the developers involved in the project had expected to drive costs down further than they actually did. This left no financial advantage to becoming a subscriber.
The governments that did subscribe will all receive substantial savings – up to $1.5 million. Those subscribers have commented that the developers are reaching out, inquiring whether they are interested in purchasing even more.
One of the biggest benefits from the program, however, was peer learning. The group would hold meetings, and also had a website built for members – both to grow a community, but also to expand knowledge of the community solar movement.
A goal of the project was to advance solar energy in the region and to help municipalities start innovative projects – these goals seem to have been met.
