The Political Economy of Community Solar: Lessons from Minnesota
*Names in bold indicate Presenter
Minnesota has long been on the forefront of community solar. In the early 2010s, several of Minnesota’s electric cooperatives and municipal utilities adopted community solar programs. In 2013, Minnesota mandated that the state’s largest electric utility, Xcel Energy, create a community solar program. This program drew initial applications for over 1.7 gigawatts of photovoltaic capacity, equivalent to more than 100-times the current annual solar installation in the state. Today, Xcel Energy’s community solar program in Minnesota is the largest in the country. To garner broad support, the Xcel Energy program was designed to achieve multiple goals: increase overall solar capacity, create jobs, increase access to renewable energy, and create a cost-effective incentive for renewable energy. Along with the ambiguity created by this multitude of goals, several reforms in the implementation of Xcel Energy’s community solar program have created uncertainty and greatly slowed development after an initial wave of enthusiasm.
In this paper, we quantify how shifting implementation rules have affected access to solar energy for residential and commerical Minnesota electricity customers. We study the effect on residential customers with a financial model of community solar uptake based on publicly available community solar contracts and apply this model to population and electricity consumption data in Minnesota. We also stratify our analysis of access to community solar by income bracket to understand the distributive impacts of the policy. Our results help illustrate how the implementation of community solar programs affects performance, offer lessons to better anticipate the potential downfalls in program design, and identify best practices to enhance equitable access to the market for solar energy.