In 2013, MnSEIA played an instrumental role in passing the “Value of Solar” program. This is a first-of-its-kind rate created to fairly compensate owners of solar facilities for the energy they produce for utilities. Since the utility can use the energy from the solar garden instead of purchasing it from a coal plant, for example, the solar garden owner is providing a benefit to the utilities, ratepayers, and society generally and should be compensated as such.
While the Value of Solar Rate (VOS) is generally optional for Minnesota's utilities to adopt, both Xcel Energy and Minnesota Power have. Both utilities published rates that are similar or higher than their general electric retail rates. The VOS is currently only used in the context of Community Solar Gardens in Xcel Energy's service territory.
The VOS strives to be value neutral, as it compensates solar providers only for the value added to the grid—no more, no less. The Minnesota Public Utilities Commission (MPUC) oversees the VOS calculation based on eight different components. Each year’s calculation is referred to as the “vintage.” Every year, MnSEIA represents the industry at the MPUC to ensure that the VOS is accurately calculated.
There are discussions around shifting towards a new location-specific valuation. This proposal would divide the state into different geographical sectors, and calculate the value of distributed energy resources in each sector— producing many, slightly different VOS rates. MnSEIA found that the first attempt produced inconsistent results that devalued the VOS. Our testimony steered the Commission back toward the system as it is today, but the conversation around location-specific valuation continues.
MnSEIA’s continuing oversight of the complex calculations that goes into the VOS has resulted in better rate outcomes for the industry.
