Community solar took off in Minnesota, but low-income residents have been left out
This story comes to you from Sahan Journal, a nonprofit newsroom dedicated to providing authentic news reporting about Minnesota's new immigrants and refugees. MPR News is a partner with Sahan Journal and will be sharing stories between SahanJournal.com and MPRNews.org.
By Andrew Hazzard | Sahan Journal
The newly installed solar panels on the Emerge Second Chance Recycling Facility are ready for the sun. It’s still a rarity in Minnesota’s successful solar garden program, but advocates are trying to ensure that more solar energy finds its way to those who live in polluted areas and struggle to pay their utility bills.
Tucked into the industrial sector of east Minneapolis, Emerge employs formerly incarcerated people to recycle mattresses, which are often discarded into landfills without being stripped of reusable materials.
Now, after five years of planning by the nonprofit Minneapolis Climate Action, its roof hosts a 180-megawatt community garden that will power the plant and about 30 Minneapolis homes.
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The Second Chance Community Solar Garden is not the norm in Minnesota. While community gardens have fueled rapid growth in the state’s solar production, experts believe the program has failed to account for residents who pay the most for power and live in more polluted neighborhoods.
“Minnesota’s program doesn’t really account for low-income access in a meaningful way,” said Maria McCoy, an analyst at the Institute for Local Self Reliance, a Minnesota-based nonprofit that advocates for energy democracy.
New projects are changing that by targeting households with high energy burdens, those who pay more than 5 percent of their income for power and are disproportionately people of color, and by reducing barriers for low-income residents. But advocates say more needs to be done to help the program expand the state’s renewable energy capacity without leaving out the most vulnerable.
“When we don’t design these programs up front for people with the highest energy burden or face the most environmental harms, you can basically guarantee they’ll be the last ones to benefit,” said Dan Thiede of Clean Energy Resource Teams, an organization supporting local renewable power projects across the state.
Community solar gardens were approved by the Minnesota Legislature in 2013, and the program launched in earnest two years later. It’s grown fast. In March, the program hit a record 789 megawatts of operational capacity, accounting for about half of Minnesota’s roughly 1,560 megawatts of solar installed.
Today the state produces enough solar power to supply about 195,000 homes, according to the Department of Employment and Economic Development, and several new projects are on the way.
Community solar is a middle ground between large-scale, utility-owned solar farms and personal rooftop power systems. Arrays typically range from one to five megawatts. One megawatt takes up about the size of a football field. Subscribers sign a 25-year contract that essentially leases individual solar panels in the array. The power from those panels shows up on subscribers’ utility bills as a credit.
People typically subscribe to cover 100 percent of their energy use, Thiede said. Most people will save a small amount of money each year. Credits stored up in the sunny summer can help cover bills in the winter.
Most Minnesotans subscribed to community solar have two monthly energy bills: one to the solar provider and one to their utility.
Community solar is available to organizations and households, but as the program evolved it became clear that residents had fewer opportunities to register.
“The vast majority of those megawatts are going toward institutions,” Thiede said.
Companies and government entities make for ideal customers, experts say. Those organizations have in-house legal counsel to review contracts. One or two entities can lease an entire array, which simplifies business for solar providers.
“I think there’s more work to be done to make it more accessible to residents,” said Ben Passer, director of energy access and equity at Minnesota nonprofit Fresh Energy.
There are groups pushing for more residential access to community solar and directing the benefits toward energy burdened households.
Cooperative Energy Futures is a member-owned cooperative that operates eight community solar gardens in Minnesota with plans to add seven more. The co-op’s 700 owner-members vote on organizational decisions and receive a proportional share of revenues each year. About 85 percent of members are residential, and the organization has made concerted efforts to target those with the highest bills and fewest resources.
Most solar gardens require a credit check and a minimum score of 680 for subscribers. The co-op doesn’t require a credit check, money up front, or a 25-year contract for members.
“For us it’s just a basic fairness issue. Low-income households and communities of color tend to pay a higher share of their income on power,” general manager Timothy DenHerder-Thomas said.
Households generally save about 10 percent on their energy bills in the first year, and those savings increase over time. As more projects come online, the co-op is earning more money, which DenHerder-Thomas said will mean larger dividends for members.
Cooperative Energy Futures is the team behind the Shiloh Temple community solar garden in north Minneapolis, which powers two religious centers and about 30 local homes. It also operates the Ramp A community solar garden in downtown Minneapolis, which splits power between the city and around 80 mostly low-income households.
The co-op recently added a 1.3 megawatt garden outside of Faribault that can power about 150 homes. To reach customers, it targeted outreach toward the Somali community in Faribault and Latino residents in nearby Northfield.
Zam Zam Musse, a Somali-American renewable energy consultant who was formerly a co-op board member, assisted with the outreach in Faribault. She helped with cultural and some language translations for older community members.
Letting people know they can save a bit of money and source their power locally was great, Musse said, but the real excitement came from sparking a larger conversation about climate change.
“Everyone was so invested,” she said.
When the co-op recruits members, it is willing to keep going back, keep answering questions and to make accommodations for any language barriers.
“It’s good to have a commitment and follow through with that commitment,” Musse said.
That outreach has been replicated at Cooperative Energy Futures projects in St. Cloud, Mankato and Waseca.
Alice Madden, who works for energy democracy advocacy group Community Power MN, helped with outreach to Spanish-speaking residents near the St. Cloud project in 2016. Often the group would spend more than 10 hours over several meetings with interested people explaining community solar and its benefits.
“Really what’s necessary is people spending the time to show they care about the community,” Madden said.
Back in the Twin Cities, Minneapolis Climate Action is on the verge of opening its first two community solar gardens. The Emerge Recycling project should be operational in the next month, as soon as its internal connection to the energy grid is completed. A second, larger project at North High School will be operational by fall.
The 365-kilowatt North High project will power the school and local homes, according to Minneapolis Climate Action executive director Kyle Samejima. The project is still accepting applications. Like the co-op, Minneapolis Climate Actions’ projects do not use credit checks or require payment up front. Residents who sign up will see benefits right away.
“To me this is really the conversation about democratizing renewable energy,” Samejima said.
Room for improvement
Changes could be made to help Minnesota’s community solar program work better for residents, experts say.
The Institute for Local Self-Reliance has studied community solar programs nationwide, and ranks Minnesota’s No. 1, McCoy said. It has the most megawatts online by a large margin, has no program size limit, and uses a “value of solar” compensation method that most prefer to a standard net metering rate.
Minnesota has excelled in growing capacity, but didn’t carve out provisions to help those with high energy burdens, McCoy said. The community solar program in Illinois, for example, dedicates 25 percent of projects to “environmental justice communities.”
“Value of solar” is a metric that aims to measure the benefits that sourcing power from the sun delivers to the state and its electric grid. It is set every year before the Minnesota Public Utilities Commission, which regulates for-profit energy providers. Advocates push for a higher value in solar, but utilities lobby for a lower value, McCoy said.
Minnesota adopted the value of solar rate in 2017. It uses an eight metric formula to determine the rate per kilowatt hour solar customers should be credited. For the first two years, the rate fell to 11 cents per kilowatt hour. In 2020 when the formula spiked to 25 cents per kilowatt hour, Xcel Energy pushed back.
“Utilities have been one of the main limiting factors in creating a true community solar program,” McCoy said.
In January, the Public Utilities Commission fined Xcel Energy $1 million for delays in connecting community solar gardens to the electricity grid. Two months later, Samejima says Xcel remains difficult to work with and that getting their Minneapolis solar gardens connected is taking too long.
“They’re not going to profit from these localized community solar gardens,” she said.
In Xcel Energy’s Integrated Resource Plan, which will map out how the utility provides power for the next 15 years, the company projects a 90 percent increase in demand for community solar due to market conditions. But advocates argue that large monopolies like Xcel effectively set market conditions in their areas.
A bill introduced in the Minnesota Legislature would add community access projects to the solar garden program to encourage projects marketed toward residential customers. Those projects would not be able to require customer credit scores and would be encouraged to seek low and middle income customers.
DenHerder-Thomas says more pricing tweaks are needed to maximize the potential for community solar. He believes the “value of solar” rate works well for commercial projects, but needs to be adjusted to give more benefits to residential customers. The Public Utilities Commission boosted compensation rates to residential subscribers in 2018, but that has not closed the gap.
Demand for community solar “is huge,” DenHerder-Thomas said. But he believes more work could be done with better policies aimed at helping residents in need.