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Construction pipeline would significantly expand community solar in Minnesota

An Xcel Energy Inc. solar program in Minnesota is poised to nearly quadruple in size based on construction figures from the end of 2016.

The community solar program, which allows ratepayers to subscribe to solar projects in exchange for credits on their electricity bills, reported 142 MW of projects under construction at the close of that year, with another 286 MW in the design phase. If all of that capacity reaches commercial operation, it would represent a significant increase from the 36.4 MW that was operational heading into 2017.

The solar industry views such programs as a way to vastly expand its potential market by giving homeowners and businesses a means of participating without having to install rooftop systems of their own. Xcel Energy, which does business in the state as Northern States Power Co. - Minnesota, said the program is helping it advance toward a goal of generating nearly 10% of its power from solar and more than doubling its renewable energy portfolio by 2030.

Since the program launched in December 2014, project size limits were imposed and the Minnesota Public Utilities Commission ordered Xcel Energy to compensate subscribers according to a formula that is used to calculate the value of distributed generation.

Xcel Energy said it spent an estimated $2.2 million — "significantly more" than it expected — administering the program through 2016. The utility said it continues to face costs associated with speculative projects, including "applications ... that lack site control, land acquisitions, building permits, development resources or secured financing." Of the more than 2,000 applications developers submitted since the program's inception, more than 60% subsequently were canceled due to size restrictions and funding problems, among other reasons, according to Xcel Energy.

Currently, 779 Xcel Energy retail customers are subscribed to operational community solar projects in Minnesota. Most of the existing capacity is allocated to commercial subscribers, with just 13% going to residential customers.