Xcel Energy Promotes Utility-Scale Solar in the Midwest

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Xcel Energy submits a plan to add up to 150 MW of large-scale solar resources in its Upper Midwest service territory by the end of 2016. Minnesota legislation requires investor-owned utilities to acquire 1.5% of retail electricity sales from solar energy by 2020. Xcel is proposing that a significant portion of Minnesota’s solar standard be met through large-scale projects, which it says are more efficient and less expensive than rooftop solar and smaller distributed systems.

 

Xcel Energy (NYSE: XEL), a major U.S. electricity and natural gas company, seems to be joining Duke Energy in promoting large-scale solar.

 

Citing the advantage of adding more solar energy at a lower cost to customers, Xcel submitted a plan to state regulators to add up to 150 MW of large-scale solar resources in its Upper Midwest service territory by the end of 2016.

 

“We are excited to develop solar resources that provide customer value and offer new customer choices,” said Dave Sparby, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company. “We plan to leverage the economies of large-scale systems to keep the cost as low as possible for customers.”

 

In other words, the energy company prefers large solar installations under its control to smaller rooftop arrays with the potential to be controlled by its customers. That level of customer choice is not usually as appealing to big energy companies.

 

Like Duke, Xcel is going solar because of state requirements. Its push for large-scale developments is likely about meeting those requirements under its own terms and control.

 

The omnibus energy bill passed last spring by the Minnesota Legislature and signed into law by Governor Mark Dayton requires investor-owned utilities to acquire 1.5% of retail electricity sales from solar energy by 2020. Xcel Energy estimates that it will need approximately 300 MW of solar capacity to meet the standard.

 

Xcel Energy is proposing that a significant portion of Minnesota’s solar standard be met through large-scale projects, which it says are more efficient and less expensive than rooftop solar and smaller distributed systems.

 

On Friday, the company notified the Minnesota Public Utilities Commission of its intent to issue a request for proposals by April 15, 2014, for large-scale solar projects totaling up to 150 MW to be installed by Dec. 31, 2016, prior to a reduction in the federal Investment Tax Credit for solar.

 

Xcel Energy officials are not expecting to meet the entire requirement with these large projects. They estimate that about a third of Minnesota’s 2020 solar requirement will be met through new customer offerings and solar projects receiving funding through the company’s Renewable Development Fund. Those program offerings include a community solar gardens program, a new Solar Rewards program, and the Made in Minnesota program administered by the Department of Commerce.

 

Xcel Energy plans to propose a second round of large-scale solar acquisition in 2017 or 2018 to acquire the necessary solar resources to ensure compliance with the standard by 2020.

 

“We look forward to working with large-scale solar project developers and our rooftop customers to grow solar energy in Minnesota in a safe, cost-efficient manner,” Sparby added.