Latest Posts





Xcel Reveals Solar Garden Power Costs Double Other Sources

The Minneapolis City Council’s recent approval of two more community solar gardens led to glowing coverage in The Journal, a community newspaper. But the report also appears to contain a bombshell from an Xcel Energy executive about the true cost of solar power, a disclosure that solar costs Minnesota ratepayers tens of millions of dollars more than conventional electricity.

At face value, the new community solar deal “saves” Minneapolis $28,000 a year on electric bills, while helping Xcel Energy meet the state mandate to produce 1.5 percent of Minnesota’s electricity through solar.

Community solar gardens allow utility customers in Minnesota to support solar energy and save money on their electricity bills. Customers typically “subscribe” to a portion of a solar garden and pay the garden’s operator for electricity their portion of the garden generates. Utilities hook up the gardens to their electric grids and credit the customers for the electricity generated by their portions of the gardens.

“There’s a spread between the credit and what you have to pay the garden operator,” said Brian Millberg, energy manager for the City of Minneapolis. “That’s how the subscribers make money.”

Meantime, up to 800 low-income households will also be eligible to cash in on solar savings of $300 to $400 annually.

Millberg said the city is trying to prove to the marketplace that low-income people can be trusted when it comes to these subscriptions. “We’re willing to take that risk, because we think the market is unfairly keeping these people out of saving some money,” he said.

Up to this point, it looks like a win-win for the city and the small percentage of low-income households involved. But then Xcel Energy senior director of customer solutions Lee Gabler opens up, acknowledging that solar power is anything but a winner for the vast majority of ratepayers at all income levels.

Community solar gardens aren’t cheap for Xcel, Gabler said. Solar energy from the gardens costs the company 12.5 cents per kilowatt-hour, almost twice as expensive as utility-scale electricity.

Give Xcel Energy credit. Utilities often avoid discussing the true costs of green energy. But Xcel provides long overdue transparency in revealing that solar power costs the utility virtually twice as much to provide as conventional power. And Gabler acknowledges the higher costs are borne by the vast majority of Minnesotans who’ve never heard of a community solar garden, much less signed up for one.

Xcel passes those additional costs onto all of its consumers by charging them more for fuel. For every 100 MW of community solar that comes online, it costs customers an additional $17 million, Gabler said.

Xcel Energy already has 140 MW of solar generating capacity on line as of October 1. At $17 million more per 100 MW, ratepayers across Xcel’s system already face an additional $24 million on their utility bills for community solar systems. The utility has another 475 MW of community solar power in the works, adding approximately $80 million more to ratepayers’ bills.

American Experiment recently reported that Minnesota has lost its longtime advantage of low retail electric prices. (See Energy Policy in Minnesota: The High Cost of Failure.)

Between 1990 and 2009, the state’s average retail price of electricity was 18.2 percent lower than the national average. But in the last seven years, the price advantage has disappeared with the average retail price of electricity in Minnesota rising above the U.S. price for the first time in February 2017.




Upcoming Events

  • Morning in Minnesota Breakfast Series: Winona

    Location: Signatures Restaurant, 22852 County Road 17, Winona, MN 55987

    Please join Center of the American Experiment Friday, March 6 at Signatures for a FREE breakfast with economist John Phelan.

    Register Now
  • Lunch Forum with Amity Shlaes

    Location: Hyatt Regency Minneapolis 1300 Nicollet Mall Minneapolis, MN 55403

    Buy tickets for March 2nd HERE. About This Event: Enjoy our Early Bird Ticket Special through February 23rd! After this date, ticket price will increase to $30. Doors open at 11:30 AM, program and lunch begin at Noon. In Great Society, the New York Times bestselling author of The Forgotten Man and Coolidgeoffers a stunning revision of our last great period of idealism, the 1960s, with burning relevance for our contemporary challenges. Today, a battle rages in our country. Many Americans are attracted to socialism and economic redistribution while opponents of those ideas argue for purer capitalism. In the 1960s, Americans…

    Register Now
  • 2020 Annual Dinner Featuring Sarah Huckabee Sanders

    Location: Minneapolis Convention Center Ballroom 1301 2nd Ave S Minneapolis, MN 55403

    American President: The Unorthodox Approach to Politics that Changed the World. Sarah Huckabee Sanders served as White House Press Secretary for President Donald J. Trump from 2017 to 2019. A trusted confidant of the President, Sanders advised him on everything from press and communications strategy to personnel and policy. For two and a half years, Sanders was at the President’s side, battling with the media, working with lawmakers and CEOs, and staffing the President on every foreign trip, including dozens of meetings with foreign leaders. Sanders is only the third woman and the first mother to hold the job of…

    Register Now