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By: Michael Harvey
Date: 2/12/15

Xcel Energy has been inundated with applications for community solar systems, and what they didn't expect was that the majority of the arrays would be larger than 1 MW. In the first 2 months of the program Xcel Energy has seen over 430MW of applications. The legeslation has a cap of 1 MW and Xcel Energy has indicated that 96% of applications are 1MW and 58% exceed 10MW. Some of the developers are using the CS legeslation as a way to tie in “Utility Scale” solar PV systems under the new CS program. 

 

Recently a developer, from out of state, put in 200MW of applications for a single customer and Xcel Energy does not see this as good use of a program that was intended to let home owners, small businesses and non-profits to go solar that normally couldn’t due to challenges in installations, financial situations, and costs.

 Community-Solar-Business

If Xcel Energy and the Public Utility Commission where to have a larger kWh rate for interconnected PV systems rather than a $.03/kWh rate and a Demand kW rate. In the current scenario larger users that want to go solar with Net Metering get paid a whole $.03/kWh and typically the PV has very little impact on the “Billing” demand. Now I say “Billing” because solar PV has large impact on reducing the demand on the grid, but from a billing standpoint that is billed every month based on the largest usage during a 10 minute window in that month, does not provide fairness. A large PV generation system on a building could be offsetting a large amount of demand all month, but when one really cloudy day comes along, all of the “Billing” demand benefits disappear.

 

If Xcel Energy doesn’t want customers, that want larger installations, to use a mechanism like community solar to get paid fairly for every kWh they are supplying the grid, then they need to have another rate for grid tied PV systems for demand metered customers that pays a Applicable Retail Rate (ARR) that is the combination costs of Demand and kWh for these customers. The complaint today from Xcel Energy is that because of large community solar customers, they will need to do infrastructure increases and fuel clause increases to keep up with the large volumes of community solar, and this will increase other rate payers rates.

 

Xcel Energy said today in a comment to- COMMENTS COMMUNITY SOLAR GARDENS DOCKET NO. E002/M-13-867 

 

“If 431 MW come online at current rates, we estimate that the

Minnesota Fuel Clause will increase by over $50 million and Minnesota customers will

see their cost of fuel rise by more than six percent. Customers will see a bill increase

between one and a half and two percent.”

 

“In addition to the costs to customers, the cost to the system is also a concern for the

Company. For example, if a developer offers garden subscription pricing in the range

of 90-98 percent of the bill credit rate, this offer could result in an annual savings of

roughly $40,000 to $200,000 for a large commercial customer subscribing to the

equivalent solar garden production of 20,000 MWh per year. If this customer’s

average retail rate was 9.456 cents per kWh, the customer would see a net energy

savings ranging from 2 percent to nearly 12 percent. While this is a compelling offer

for potential subscribers, it is important to note that this arrangement for a large

commercial customer would add in excess of $1.4 million dollars of incremental cost

to the system. Since the bill credit payments will be recovered through the fuel clause,

all non-exempt Minnesota customers will, in essence, fund this customer’s savings.”

 

Based on the claim that “Since the bill credit payments will be recovered through the fuel clause, all non-exempt Minnesota customers will, in essence, fund this customer’s savings.” , this might be interpreted that: 

 

All those commercials and programs to conserve and save electricity is actually increasing all its customers rates.

Use more electricity to keep rates low.

 

I know that Xcel deals with many different facets of energy production and distribution, and I am not claiming I know all of them. With that said, If a customer where to leave their market, ECO Lab for instance, would that increase the rates of customers? Instead they want to produce their own electricity and do there part in being responsible stuarts of the environment…… and save money of course. 

 

We are at a cross roads in MN, that in many cases, solar is less expensive than traditional sources and when put on the customers meters actually can help decrease demand and stress on the distribution and transmission lines. 

 

If the power companies where to adopt storage on its distribution system and allowed for customers to produce their own power, it is likely we could see fixed costs and lower inflation. The utility just has to change its model that embraces other sources rather than trying to steer the market towards its traditional model. I will admit it is a loaded conversation, and if open dialog on both ends where presented with reality and not “wheel steering” we might just come up with great choices in going solar and offering choice.

 

For more information on MyCommunitySolar™ visit WeKnowSolar.com/MyCommuntySolar™