Minnesota bill could 'all but stop' rural small-scale solar installs

The change could encourage smaller Minnesota power companies to speed up deployment of larger solar facilities ahead of the 2040 deadline, the Rural Electric Association said earlier this month.

“Utilities can purchase the same energy at about half the cost by buying or building systems at utility scale. And that means we can get twice as much carbon reduction for the same price,” MREA CEO Darrick Moe said in an April 7 statement.

In an interview this week, Moe said the net metering change is MREA’s biggest legislative priority this session. From MREA’s perspective, the state needs to get out in front of a potential rapid rise in demand for smaller, less cost-effective solar systems, he said. In other words, without a change, MREA says, the good deal offered to those rooftop solar consumers would push costs up for everyone else.

Sunny California is the poster child for this ​“cost-shift,” according to Moe. He cited a University of California analysis that blamed residential rooftop solar — which produces about 20% of the electricity consumed by residential customers of its three major public utilities — for shifting $4 billion to other customers’ bills. That works out to between 9% and 22% of the retail electricity price, depending on the utility.

Retail-rate compensation ​“is a fair and straightforward policy since the power delivered to the grid is used by their neighbor and that neighbor is then charged retail for that power by the utility. The utility then credits the solar owner who provided the power that same amount. There is no cost shift,” they wrote.

The Senate bill wouldn’t deter electric co-op and municipal utility customers from installing solar to meet their own energy needs, but rather disincentivize ​“oversized systems” designed to benefit from the current net metering framework, Moe said. In other words, some customers set up systems that produce far more power than they need with the intent of selling electricity back to the utility.

“What we’re looking for here is really a modest change,” Moe said.

One rural net metering beneficiary had a different take at the Capitol press conference.

“There’s no way I would have even considered [solar] had I thought net metering was going to be history,” said Carmen Fernholz, who spent $160,000 to add solar last year on his 450-acre organic farm in western Minnesota.

If the net metering change passes, ​“solar in rural and small town Minnesota would all but stop,” said Bobby King, Solar United Neighbors Minnesota director, in an email.

With about a month left to go in this year’s legislative session, the energy omnibus bill likely isn’t yet in final form, so the fate of the net metering change, community solar sunset, and other individual items remains uncertain. And House Democrats, who share control of the lower chamber, may be less supportive of those provisions, Moe said.

But ​“being in the Senate omnibus means [the net metering provision] is a live bipartisan issue for end-of-session negotiation,” he said.