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A surge in proposed projects and interconnection requests is expected to test Minnesota’s nation-leading community solar program.
Xcel Energy reported this month that it received about 400 applications in 2020 to build new community solar projects on its grid. It’s the most ever proposed in a single year and exceeds the total number of projects completed since 2015. The utility credits a more generous value-of-solar rate that was approved by state regulators in 2019.
The sharp uptick has intensified complaints by developers about costs, delays and inefficiencies with Xcel’s interconnection process, though very few have filed formal complaints with the utility or regulators. Some worry problems will worsen as the company processes the growing queue.
Minnesota lawmakers passed the state’s community garden solar law in 2013 and Xcel began formally accepting applications a year later. Projects must have a minimum of five customers and subscribers are limited to no more than 40% of power generation.
Today, Xcel’s community solar queue includes 515 projects that, if completed, will add 483 megawatts of capacity to its grid. The challenge is that many substations where the projects can connect to the grid are near capacity but still attracting multiple proposals, the utility said in its recent report to regulators.
The logjam is leading to growing complaints by solar developers about sluggish response times, delayed engineering studies, and unexpected costs for navigating Xcel’s multi-level approval process. The utility says most issues raised were resolved informally, without a formal dispute resolution process.
Most, but not all. Dean Leischow, CEO of Sunrise Energy Ventures and persistent critic of Xcel, has hired attorney Curtis Zaun to file complaints and represent them before regulators. As the former assistant commissioner of energy at the Commerce Department, Zaun did legal and policy analysis on the community solar program before starting a private practice last year.
Zaun, who also represents SunShare LLC, said he sees patterns emerging. Developers do not receive Xcel’s interconnection studies promptly even though they pay for them. The community solar program lays out deadlines for each part of an approval process, Zaun said, and his clients say they have often been missed. “Clients have told me Xcel is the most difficult utility to work with regarding the interconnection process,” he said.
David Amster-Olszewski, CEO and founder of SunShare LLC, said he has 10 to 12 projects that have slowed as they reach different phases of the interconnection process. His company sometimes finds errors in studies, receives work beyond established timeframes and experiences other delays.
“Xcel always has an issue,” Amster-Olszewski said. “There’s always a reason [for a delay]. I think the problem is that there’s always a reason.”
David Shaffer, executive director of the Minnesota Solar Energy Industries Association, acknowledged “the additional complexity” that the growth and interconnection issues have placed on Xcel. “But at the end of the day, regardless of what the actual causes are, Xcel is not meeting the deadlines and these applications are just piling up,” he said.
Shaffer called out the interconnection process, unveiled in 2019 after years of stakeholder engagement, as a roadblock to faster approvals. The process gave Xcel up to 24 months instead of 12 months to approve clean energy projects under 10 MW.
But Xcel’s report said most community gardens that became operational in 2020 began their application in 2018, which is within the newer interconnection timeline. The report also said the utility collected $1 million in 2020 in late fees from developers who missed their completion deadlines.
The community solar program is a perennial topic at the Legislature. Xcel annually asks lawmakers to curtail the program, arguing it costs ratepayers too much money and benefits mainly commercial interests, not residential subscribers.
This session, solar advocates have proposed a handful of bills they say would benefit Xcel and developers. Eric Pasi, Impact Power Solutions chief development officer, said one legislative proposal raises the 1 MW limitation to 3 MW on the size of solar gardens, a move that could result in larger but fewer projects. Another bill would remove the geographic restriction on where subscribers live, potentially opening projects to more customers and prompting solar development in rural communities outside the Twin Cities region.
Developers would like to see Xcel conduct more “batch” studies, in which the company would examine grid impacts for clusters of projects instead of doing each individually. A stakeholder group composed of developers, solar experts and Xcel staffers continues to meet to review and suggest changes to the interconnection process, Pasi added.