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Government Mandates, Not Free Markets, Responsible for Minnesota’s Solar Growth

I recently wrote about how the solar irradiance, the energy potential for solar, in Minnesota and Wisconsin were among the lowest in the country. Despite the poor solar resources in Minnesota, our state had installed 882 MW of solar. This is an awful lot of solar panels given the fact that solar irradiance is low here, especially compared to states like Arizona and California, and it strongly suggests the growth in solar in Minnesota is a product of government mandates and rate structures, not free markets.

In 2013, the Minnesota legislature passed legislation requiring 1.5 percent of Minnesota’s electricity come from solar by 2020, and it also established Minnesota’s Community Solar Garden program, which requires Xcel Energy to purchase electricity from the facilities at a rate of $110-125 per megawatt hour. This is four times the cost of electricity generated at the Sherburne County coal plant, which generates some of the lowest-cost electricity in the state.

Given this sweetheart deal, it’s no surprise that 57 percent of the solar installed in Minnesota is Community Solar.

Unfortunately, the DFL-led House of Representatives voted to expand the Community Solar program, refusing every amendment proposed by Republican lawmakers to reduce the costs borne by Xcel Energy customers, which will cause electricity bills to rise by $39 per customer next year, according to Rick Evans of Xcel Energy.

If solar growth were driven by free markets and not government mandates, then investors would naturally seek to invest in areas where they could get the highest return on investment. Due to its low solar irradiance, this would not be Minnesota.

Lastly, if there was any doubt that solar is driven by mandates and not markets, let’s not forget that Ralph Jacobson, founder of IPS Solar, said snow “does fill up on solar collectors” during the winter. Paying people to clean off panels is simply too expensive, he said, especially at farms such as Waterville, where thousands are spread over acres of land, according to Midwest Energy News, which is run by Fresh Energy.

How can any product be viable in a free market in Minnesota if it doesn’t work when it snows, and it is “too expensive” to clear the snow off of it?

 

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