STATUS OF MINNESOTA REBATE PROGRAMS

7/11/2013

We've come to a new phase in Minnesota's solar rebate approach. A couple months ago the Minnesota legislature passed a bill* that changes how solar incentives for PV (photovoltaic) installations are paid and calculated starting in 2014. It's not really an energy bill but I'll refer to it as such throughout this discussion.

For Xcel Energy customers, rebates previously were paid to the system owner immediately ("Solar Rewards") with an option for a bonus rebate paid over five years if the panels were manufactured in Minnesota ("Minnesota Bonus"). The amount of these rebates was based on the system size (number of panel watts installed).

Although there aren't many details yet on how the new incentive amounts will be calculated, the payments will now be spread out over ten years. The amount will be based on how much energy the system produces each month - referred to as a "production-based incentive” or PBI. This means the amount of the incentive earned by a system may vary year to year depending on weather, snow cover, etc.

The bill states that applications for the "Minnesota Bonus" incentive (for panels manufactured in the state) will be accepted only between January 1 and February 28 and projects will be randomly selected if there are more applications than incentive funds available. It does not specify that same schedule for the "Solar Rewards" incentive but it may be run similarly. There is likely to be no queue of waiting projects from 2013, but that is still under discussion.  The legislation states that a random process must be followed;  all projects will need to re-apply during the January/February timeframe. This means it will not matter if yours is the first project to apply or the last as long as the application is completed during the application period. This also means that even if your project happens to be the very first into the incentive program, it may not win funding that year and would have to go back into the lottery pool for another shot at funding the following year.

The dilemma for us at Aladdin Solar (and all Minnesota's solar contractors) is that there is only a general approach and spending targets outlined in the energy bill. There is no instruction as to how the incentives will be calculated, requirements for qualification, or payment schedules. These are details that will be worked out between the utility companies, the Department of Energy Resources (Minnesota DER), and other "stakeholders. All parties are working on getting details out this Fall 2013.

Unfortunately, about all we can tell you is that there will be a new incentive program available next year. No one can tell you what that incentive will amount to or how it will be paid. We believe the best approach is to commit to your project with a contract and hang in there through this period of uncertainty. We’ will be actively following Minnesota’s incentive program as it unfolds and will have your project documents ready for whatever they throw at us! If for some reason the final incentive program is not satisfactory to you, you can cancel the installation contract without penalty.
 

Charlie and Donna Pickard
Aladdin Solar

P.S. Positive news for solar thermal installations - the energy bill also brings back incentive programs for solar thermal (solar hot water, solar air heat, and solar pool heat) systems. Incentives for thermal have been missing for several years and will give a boost to this efficient technology!

*H.F. No. 729, Conference Committee Report -- Articles 9 through 12