In a preliminary ruling, the state's Department of Commerce says Xcel Energy should maintain its solar energy incentive program.
Xcel Energy says its Solar Rewards rebate has met its goals and it should be allowed to retire the program. But the Commerce Department recommends it continue through 2015 at a cost of $5 million per year.
Solar Rewards is an incentive program that gives up-front rebates to home and business owners who install solar panels.
The Department of Commerce's preliminary ruling was part of Xcel's larger conservation improvement program. Apart from phasing out Solar Rewards, the agency recommended the three-year plan be approved.
"At this time, Staff understand there is still significant demand for solar PV (photovoltaic) incentives and a $5,000,000 annual budget is necessary to meet customer demand," read a recommendation from the Department of Commerce to Deputy Commissioner William Grant.
In a statement, Xcel said they are still reviewing the proposal. The company will have the opportunity to respond to the Department of Commerce's recommendation.
"We are encouraged that the department recognizes the challenges of the current Solar Rewards program and we will work with the department to explore alternative programs," the statement read.
The preliminary ruling is a win for the state's solar energy businesses. Many are concerned losing the rebate could kill parts of the relatively new industry.
Lynn Hinkle, policy director for the Minnesota Solar Industry Association, said he is pleased with the Department of Commerce's recommendation.
"It represents a recognition of what solar means to the state in terms of economic development and jobs," Hinkle said.
The Department of Commerce will make a final ruling sometime in October.