By Rep. Paul Anderson
Among the provisions contained in the Energy Bill passed this year by the Legislature were several that encourage the development of energy derived from the sun. A solar energy mandate was added to the already existing Renewable Energy Standard (RES) that requires 20 percent of electricity sales originates from renewable energy sources by the year 2020 and 25 percent by 2025. The new law requires an additional 1.5 percent of a public utility’s retail electric sales in the state must be produced by solar energy by the end of 2020. The numbers for Xcel Energy, Minnesota’s largest provider of electricity, are higher with their required numbers for the RES being 25 and 30 percent.
A feature of the new mandate is that another payment option will be available to the utilities for paying for the power generated by solar. In the past, most small generators of electricity were reimbursed for their power at the retail cost of electricity. The new option available to solar generators is called the “value of solar,” which will be determined by the Minnesota Public Utilities Commission. This new price is supposed to reflect the value that solar energy represents to the power companies, taking into account the savings from not having to construct new power plants and transmission lines. The “value of solar,” at least for the first three years, cannot be below the utility’s average retail rate.
The big winner in this new piece of legislation is the method of producing solar energy called ”photovoltaic,” which simply means the energy produced goes toward generating electricity. Beginning in 2015, $15 million annually will be earmarked as incentives for this type of power generation. The other type of solar production is called “solar thermal,” and instead of producing electricity, this method heats water for either heating or air conditioning systems. Beginning next year, $250,000 annually will be allocated by the Dept. of Commerce for rebates to the owners of residential and commercial buildings who install solar thermal systems manufactured in Minnesota. One solar thermal manufacturing plant is located here in central Minnesota, and that is Solar Skies in Alexandria.
The revenue to at least partially fund these new programs will be generated by a sales tax on the wholesale cost of electricity assessed to the public utilities that do business in the state. They include Xcel Energy, Minnesota Power, Otter Tail Power, Alliant Energy Interstate Power and Light and Northwestern Wisconsin Electric Company. Together, these companies account for about two-thirds of all retail electricity sales in Minnesota. Rural electric cooperatives and municipal power suppliers were exempted from this new tax.
This new mandate will increase the cost of electricity in Minnesota, especially for those served by the aforementioned utilities. I am concerned about keeping our state competitive with its neighbors, and this is another example of how costs here will become higher. For average Minnesota families, this will show up on their electric utility bills.
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This past year will certainly be remembered as one presenting many challenges to Minnesota farmers. Beginning with the cold, wet spring and continuing through summer storms and a wet period this fall during harvest, conditions were less than ideal most of the time. Even still, those who received more timely rains had strong yields again. But, for most farmers, yields were down this year. And coupled with the fact that corn prices, for example, are a far cry from last year’s lofty level of $7 per bushel or higher, farm income, at least for cash grain producers, will decline. And with forecasts calling for higher global production, prices are expected to remain around the cost of production into the foreseeable future.
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