Solar power developers will have to limit the size of their larger installations, Minnesota regulators said Thursday.
Xcel Energy reached a settlement agreement with a few community solar garden developers that caps a project's size at 5 megawatts, or 5 million watts, serving about 715 homes. The Minnesota Public Utilities Commission has signed off on the settlement.
Xcel has been pushing for the limit amid concerns that developers were proposing large, "power plant"-size gardens, regional vice president Laura McCarten said.
"There were proposals submitted to us that were for 10, 20 even larger, even as high as 50 megawatts," McCarten said. "It was ballooning the size of the solar garden program well beyond what was intended."
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Community solar gardens allow utility customers, and even renters who live in apartments, to choose how much solar power to buy or lease, and whatever that panel produces shows up as a credit on the customer's bill. When Xcel announced its Solar Rewards Community program late last year, the utility predicted the energy generated could serve 25,000 homes this year.
Some applications proposed as high as 1,000 megawatt solar gardens, McCarten added. Without the cap, Xcel energy customers would've had to bear the costs estimated at $100 million per year.
The PUC decision is retroactive and all developer plans already submitted must be scaled back to meet the new requirement.
A company can build up to five, one-megawatt, co-located solar gardens on one site under the settlement agreement.
The ruling adds uncertainty to developers who abided by a 2014 PUC decision that puts no limit on how much they can build. Others started their plans based on an older 2004 state standard that limits interconnections for all utilities to 10 megawatts.
"They just want certainty in this program as they're investing a lot of time and money and work," said Holly Lahd, director of electricity markets for the advocacy nonprofit Fresh Energy. "What does 5 megawatts co-located really mean?"
Denver-based developer SunShare submitted more than 100 project applications scattered over Xcel Energy territory in Minnesota.
CEO David Amster-Olszewski said the different regulations need to be clarified and he expects the ruling will be revisited in the next month.
"Over the next 30 days there will have to be a public process, with citizens going into the Public Utilities Commission and encouraging them to take another look at their rulings and push to allow for more economical and larger community solar farms," he said, "rather than having arbitrary, smaller size ones."
Despite the limit, McCarten argued Minnesota is poised to have one of the largest, if not the largest, community solar garden program in the country.
"So we've got an outcome that strikes a reasonable balance between the interest of our customers and the interest of developers," she said.