Xcel Energy is proposing a new approach to powering the grid in Minnesota.

The utility recently told state regulators it wants to build a network of solar-powered energy storage hubs, located strategically on its grid and linked with technology so they can be operated in concert with each other.

The result would be what’s known as a “virtual power plant.” By simultaneously discharging the batteries, for example, the collection of distributed resources can function similar to a conventional power plant.

It’s a solution some clean energy advocates have long pushed for as an alternative to larger, centrally located projects that are more reliant on long-distance transmission and create fewer local economic benefits. Xcel’s new embrace of the concept likely reflects the evolving economics of clean energy and the urgency to replace generation from retiring coal-fired power plants.

“I welcome our now-agreement about the importance of distributed energy resources in their future procurement plans,” said John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance.

Virtual power plants 101

Virtual power plants use sophisticated software and technology to aggregate energy from batteries, smart thermostats, electric vehicles, storage and other connected devices. The clean energy nonprofit RMI predicts virtual power plants nationally could reduce peak loads by 60 gigawatts and cut annual energy expenditures by $17 billion by 2030.   

Several utilities, as well as solar and storage companies, have developed virtual power plant programs around the country. Perhaps the best-known is National Grid’s ConnectedSolutions program in New England, which includes residential batteries, electric vehicle batteries, and thermostats.  

In May, Colorado Gov. Jared Polis signed legislation requiring Xcel Energy to create a virtual power plant plan in that state by next February. 

Xcel is pitching the Minnesota project on its own as part of its latest long-range resource plan. In a recent Public Utilities Commission filing, Xcel proposes combining 440 megawatts of solar power with 400 megawatts of battery storage at dispersed locations. Designed to be flexible, the program might add backup generation and energy efficiency measures in the future. 

A virtual power plant, Xcel said, would save ratepayers money, improve reliability, accelerate clean energy development, and reduce energy disparities by playing assets in underserved communities. The “new approach equips us to confidently meet incoming load growth, deliver unique customer and community value, and support economic development,” the company said in its filing.

Kevin Coss, a spokesperson for the company, said the proposal “is part of a larger plan to better serve the grid and our customers while meeting anticipated growth in energy demand. The program would grow our distributed energy resources as a complement to our existing plans for additional utility-scale renewable and firm dispatchable generation to advance the clean energy transition.”

Advocates reaction

Clean energy advocates say the approach could reduce Xcel’s need to build more infrastructure at a time when electricity demand continues to grow and its fleet of aging fossil fuel plants reach closure dates.

A recent study in Illinois suggested that pairing solar with storage could be the most economical and environmentally beneficial way to maintain grid reliability as the state transitions to 100% clean energy.

“Utilities always treated distributed energy resources as something that happened to them and that they had to figure out how to accommodate because they were being told to,” said Will Kenworthy, Vote Solar’s Midwest regulatory director. 

The company’s interest in more distributed resources could lead to a more flexible grid, one that helps mitigate substations congestion and allows it to store energy from wind farms for use during high-demand periods, Kenworthy said.

One area of disagreement between the utility and some clean energy advocates is who should own the facilities. Unlike in Colorado, Xcel is proposing to own the Minnesota solar and storage hubs itself, collecting money to build them — plus a rate of return — from ratepayers. 

That’s not the best deal for customers, and it prevents local communities and developers from being able to share the financial benefits of distributed energy, said Farrell, of the Energy Democracy Initiative. If Xcel owns the virtual power plant, the cost could be higher than they would be with an open, competitive process.

Farrell pointed to the recent opposition to an Xcel electric vehicle charging plan in which it sought to own all of the chargers. Convenience stores and gas stations argued Xcel had an unfair market advantage as the incumbent utility and would own too much of the state’s charging network. Xcel withdrew the proposal in 2023 after regulators reduced the charging network’s size.

As Xcel’s plan evolves, Farrell wants Xcel to allow businesses, homeowners, and aggregators to also participate by selling their battery capacity or demand response into the program.

The Minnesota Solar Energy Industries Association, which promotes battery storage, also takes a dim view of Xcel owning a virtual power plant.

“This is an area where competition would likely provide better service, lower cost and more choice to ratepayers,” said regulatory and policy affairs director Curtis Zaun. “Monopolies are not particularly good at providing the best service at a reasonable rate because that is inconsistent with their investors’ interests.”

Getting the details right

Virtual power plants are different than demand response, such as thermostat savings programs, in that they add value to the grid “without any change needed to the homeowner’s behavior,” said Amy Heart, senior vice president for policy at Sunrun, a home solar and storage company that participates in virtual power plants in the Northeast and in Texas, California, and Puerto Rico. 

Heart said the “devil is in the details” when creating a robust demand response program. A program in Arizona failed, she said, because of the underperformance of the single company it selected to aggregate resources.

Sunrun developed a virtual power plant in four New England states, enrolling more than 5,000 solar and storage customers to share their capacity on the grid. In the summer of 2022, Sunrun’s virtual power plant shared more than 1.8 gigawatt hours of electricity.

Typically, Sunrun customers agree under contract to share a portion of their battery backup 30 to 60 times annually for three hours or less for each event. The process is automated, with Sunrun’s software connecting to customer batteries and sending utilities power during high-demand times or predictable peak loads. Customers receive payment for the electricity provided.  

Heart said the best systems are open to individual customers and aggregators using different battery storage brands. Giving a virtual power plant “room to grow, breathe, and adapt will be important,” she added.

The Xcel virtual power plant proposal is part of the multi-year Upper Midwest Integrated Resource Plan, which regulators have been reviewing and will likely approve, with many changes, later this year.

In Minnesota, Xcel Energy looks to mimic power plant with solar and storage networks is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Construction is underway in St. Paul, Minnesota, on a major affordable housing development that will combine solar, geothermal and all-electric appliances to create one of the region’s largest net-zero communities.

Twin Cities Habitat for Humanity broke ground in June on a four-block, 147-unit project on the site of a former golf course that’s being redeveloped by the city and its port authority, which made the decision to forgo gas hookups. 

Affordable housing and Habitat for Humanity builds in particular have become a front line in the fight over the future of gas. The organization has faced criticism in other communities for accepting fossil fuel industry money and partnering with utilities on “net-zero” homes that include gas appliances. It’s also built several all-electric projects using advanced sustainable construction methods and materials.

The scale of the Twin Cities project is what makes it exciting, according to St. Paul’s chief resilience officer Russ Stark. 

“We’ve had plenty of motivated folks build their own all-electric homes, but they’re one-offs,” he said. “There haven’t been many, if any, at scale.”

Stark added that the project, known as The Heights, was made possible by the federal Inflation Reduction Act. 

“I think it’s fair to say that those pieces couldn’t have all come together without either a much bigger public investment or the Inflation Reduction Act, which ended up being that big public investment,” he said.

A vision emerges

Port Authority President and CEO Todd Hurley said his organization bought the property in 2019 from the Steamfitters Pipefitters Local 455, which maintained it as a golf course until 2017. When no private buyers expressed interest in the property, the Port Authority bought it for $10 million.

Hurley said the Port Authority saw potential for light industrial development and had the experience necessary to deal with mercury pollution from a fungicide the golf course staff sprayed to kill weeds.

“We are a land developer, a brownfield land developer, and one of our missions is to add jobs and tax base around the creation of light industrial jobs,” Hurley said.

The Port Authority worked with the city’s planning department on a master plan that included housing, and it solicited developers to build a mix of market-rate, affordable and low-income units. The housing parcels were eventually sold for $20 million to a private developer, Sherman Associates, which partnered with Habitat and JO Companies, a Black-owned affordable and multi-family housing developer.

“Early on, we identified a very high goal of (becoming) a net zero community,” Hurley said. “Everything we have been working on has been steering towards getting to net zero.”

Twin Cities Habitat President and former St. Paul mayor Chris Coleman said the project met his organization’s strategic plan, which calls for building bigger developments instead of its traditional practice of infilling smaller lots with single-family homes and duplexes. The project will be the largest the organization has ever built in the Twin Cities.

Coleman said the Heights offered an opportunity to fill a need in one of St. Paul’s most diverse and economically challenged neighborhoods and “be part of the biggest investment in the East Side in over 100 years.”

The requirement for all-electric homes merged with Habitat’s goal of constructing more efficient and sustainable homes to drive down utility costs for homeowners, he said. Habitat built solar-ready homes and sees the solar shingles on its homes in The Heights as a potential avenue to producing onsite clean energy.

Zeroing in on net zero

Mike Robertson, a Habitat program manager working on the project, said the organization worked with teams from the Minneapolis-based Center for Energy and Environment on energy modeling.

“The Heights is the first time that we’ve dived into doing an all-electric at scale,” Roberston said. “We have confidence that these houses will perform how they were modeled.”

Habitat plans to build the development to meet the Zero Energy Ready Home Program standards developed by the U.S. Department of Energy. Habitat will use Xcel Energy’s utility rebate and efficiency programs to achieve the highest efficiency and go above and beyond Habitat’s typical home standards.

The improved construction only adds a few thousand dollars to the overall costs and unlocks federal government incentives to help pay for upgrades, he said.

The nonprofit will receive free or reduced-cost products from Andersen Windows & Doors and other manufacturers. GAF Energy LLC, a solar roofing company, will donate solar shingles for over 40 homes and roofing materials. On-site solar will help bring down energy bills for homeowners, he said.

Chad Dipman, Habitat land development director, said the solar shingles should cover between half and 60% of the electricity the homes need. Habitat plans to use Xcel Energy incentive programs to help pay for additional solar shingles needed beyond those donated. 

Habitat will install electric resistance heating technology into air handlers to serve as backup heat for extremely cold days. Dipman said that the air source heat pumps will also provide air conditioning, a feature not available in most Habitat properties in Minnesota.  

Phil Anderson, new homes manager at the Center for Energy and Environment, has worked with Habitat on the project. He said the key to reducing the cost of heating and cooling electric homes is a well-insulated, tight envelope and high-performance windows. Habitat will build on its experience with constructing tight homes over the past decade, he said.

“Overall, the houses that we’ve been part of over the last almost ten years have been very tight homes,” Anderson said. “There’s just not a lot of air escaping.”

Habitat’s national office selected The Heights as this year’s Jimmy & Rosalynn Carter Work Project, named after the former president and his wife, two of Habitat’s most famous supporters. The work project begins September 29^th and will receive as visitors Garth Brooks and Trisha Yearwood, who now host the Carters’ program.

Robertson said thousands of volunteers from around the country and the world will help put up the homes. The Heights project “raises a lot of awareness for Habitat and specifically for this development and the decarbonization efforts that we’re putting into it,” he said.

The Heights’s two other housing developers continue raising capital for their projects and hope to break ground by next summer. Habitat believes the project will meet its 2030 completion deadline.

A St. Paul, Minnesota Habitat for Humanity project will offer affordable housing without fossil fuels is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The small southeastern Minnesota city of La Crescent receives just a handful of permit applications each year to install solar panels on homes.

Despite the small volume, it’s still important to city sustainability coordinator Jason Ludwigson that it’s a smooth process for homeowners and installers.

That’s why the city of 5,000 recently became one of the first in the state to start using a software program designed to streamline local solar permitting.

Solar Automated Permitting Plus, or SolarAPP+, was developed by the National Renewable Energy Laboratory (NREL) in collaboration with the solar industry, code organizations, local governments, and the building safety community. Since its release in 2018, SolarAPP+ has been used by more than 160 cities and counties to automate much of the permitting process for smaller solar installations.

In La Crescent, an application that might have taken a few days for a city employee to review can now be approved online in minutes for projects that meet criteria. That “will save (time) for both the contractor and the city,” Ludwigson said. “It makes it faster for our building and zoning department.”  

Minnesota lawmakers want to encourage more communities to join La Crescent in adopting the software. This year, the Legislature budgeted $2 million for the Commerce Department to deliver programs and training to local agencies, contractors, inspectors and others involved in solar permitting.

The state’s solar industry association supports use of the software, in part for its potential to standardize a process that can right now vary significantly from city to city. Making it easier to permit installations could save companies time, potentially lowering costs and helping to expand rooftop solar in the state, which will need many megawatts more clean energy to reach its climate goals.

Getting permits for solar projects in Minnesota can take days or weeks and cost as much as $1,000. Typically, solar installers in the state apply electronically or in person for separate building, local electrical and utility interconnection permits. After receiving approvals for all three applications — and any other that are required — they start building projects that, once completed, are reviewed onsite by building and electrical inspectors.

Installers using the software receive automated approvals if they accurately complete forms for their building and electrical permits and, if required, fire and structural permits. Any errors are flagged and sent back to the installer for corrections. The app integrates with existing permitting software programs used by government agencies, according to NREL.

California cities have been the biggest adopters so far, but the app is beginning to catch on in Minnesota, Wisconsin and Iowa. By the end of 2023, the NREL reported that the free software had been used nationally on 32,800 projects, saving 33,000 hours of permitting staff time. Installers pay a $25 administrative fee and the community’s permitting fee.

State Rep. Patty Acomb, who chairs the Climate and Energy Finance and Policy committee, said she and other lawmakers want to provide state grants so cities can learn how to use the software and eventually create a consistent permitting process across the state. “The intention is to make (permitting) easy and predictable,” she said.

Lissa Pawlisch, director of the Energy Development Section at the state Department of Commerce, said the department is developing a program to reach out to communities interested in SolarAPP+ and assist them in incorporating it into existing permitting software. She also believes the app could play a role in helping move installations through the new federally funded Solar for All program that will serve low income households. 

Great Plains Institute’s Brian Ross said that Solar for All requires a consistent approach to permitting, and that one way to achieve that is with the SolarApp+ software. The app would give a “jurisdictional consistency” to applications from low income solar customers and “to make sure there are not barriers in the way.” 

Despite its promise the app will not work in every situation. It only incorporates local versions of electrical permits and not the state permit, which many communities use. “If the local government relies on the state permitting process (for instance, Minneapolis), then I don’t think there is any advantage to using SolarAPP because the state electric permitting process is already effectively an ‘automatic issue,'” he said.

Donna Pickard of TruNorth Solar has spent decades filing solar permits with dozens of municipalities. She said installers need building, electrical and interconnection permits and approvals before projects begin, often taking over a month.

Pickard wonders if SolarAPP+ will interest Minnesota communities because many already have established permitting systems to manage solar projects. However, having dealt with many different permitting structures, Pickard said she “likes the idea of standardization because it would make things easier.”

Another challenge is that the software can’t evaluate permits for projects on flat or metal roofs in the Midwest. Jeff Cook, solar analysis subprogram manager at the NREL Strategic Energy Analysis Center in Colorado, said the software covers about 80% of eligible solar installations but the number declines in the Midwest due to “high snow load and metal roof penetration.”

Pawlisch said outreach and grants for SolarApp+ would likely start next year. The start date is also unclear for Solar for All as she continues to meet with federal and state officials to work out the details.

Software aims to help local governments standardize, streamline solar permitting  is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The “solar-coaster” is about to get a little smoother for Minnesota solar installers.

State lawmakers this spring extended funding for a rooftop solar rebate program through 2035, bucking a trend of two-year renewals that caused uncertainty for installers every couple of years.

Solar industry leaders say the additional financial certainty will help companies invest in longer-term marketing and outreach, particularly for reaching lower-income customers.

Since 2014, Solar Rewards has helped more than 8,000 residential and small business customers pay for solar installations in Xcel Energy’s territory. The program is managed by the utility, but the legislature controls its budget, which has ranged between $5 million and $15 million annually. The money comes from yearly fees the state collects from Xcel in return for allowing it to store nuclear waste at two power plants.  

Logan O’Grady, executive director of the Minnesota Solar Energy Industries Association, said the extension represents a compromise — and a victory — after failed attempts to convince lawmakers to increase the program’s funding. Funding has rarely stayed the same two years in a row. Installers have struggled with planning because they did not know if the rebates would be renewed. 

“It creates the inability to plan for what you’ll be getting year to year,” O’Grady said. “You get through a two-year cycle, and then there might be nothing.”

Uncertainty about the rebate’s future has been challenging to communicate to customers. O’Grady said installers could not make promises in some years because they did not know if the program would continue. Now, even if funding runs out for the year, companies will be able to confidently tell customers that it will be available next year.

He said the extension also will help installers work with low- and moderate-income Solar Rewards customers. In 2023, the Legislature significantly modified Solar Rewards by allocating half the money for low-income participants while increasing subsidies for those projects.

Bobby King, Minnesota director of Solar United Neighbors, said connecting to organizations working with low-income households has taken a few years. The extension gives him the confidence to continue the work.

“You need the program to be consistent if you’re going to continue to grow a program to help folks get low-income solar,” he said. “We can be confident about bringing more resources to staff a (low-income) program.”

All Energy Solar CEO Michael Allen said the Solar Rewards extension “provides you a little bit more confidence” but “still doesn’t take away the real costs of having to market and to sell, design and build projects for this market segment.” He estimated that it can cost as much as 10 times more to recruit and sell to income-qualified customers because of the relationship building, education, financing and sometimes structural issues that need to be addressed.

The Solar Rewards budget over the 10-year extension will be a bit more than half of what the program received from 2014 to 2025. He worries the subsidies will slow rooftop solar, which needs to expand to meet the state’s climate goal of net zero emissions by 2050.

Martin Morud, CEO and owner of TruNorth Solar, said he prefers stable funding that allows his business time to develop relationships with community organizations that work with income-qualified customers. He said TruNorth Solar has worked on income-qualified projects involving food shelves and transitional and low-income housing through Solar Rewards and other programs. 

Cooperative Energy Futures had begun using Solar Rewards for residential projects over the past two years after primarily building community solar projects with many low- and moderate-income subscribers.

Pouya Najmaie, its policy and regulatory director, said the nonprofit recently hired an employee to focus on income-qualified projects. The Solar Rewards extension will help the nonprofit maintain that position and potentially add another if demand grows.

The Solar Rewards bill was part of a 1,430-page omnibus bill that Gov. Tim Walz signed into law in late May. Rep. Patty Acomb, House of Representatives Climate and Energy Finance and Policy Committee Chair, said lawmakers supporting Solar Rewards worried that the program could have ended in 2025 if the Democratic-dominated Legislature changed hands.

“Fifty million dollars, or $5 million a year, is better than zero,” she said. “I think that having programs like this is a signal to the industry that there is support from the state.”

Minnesota solar rebate extension gives installers longer runway to reach lower-income customers is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Minnesota solar developers frustrated with the process of connecting projects to the electric grid will soon have a new place to turn to answer questions and resolve disputes.

State lawmakers recently passed legislation calling on the state Public Utilities Commission to hire an interconnection ombudsperson to provide clean energy companies with information, guidance, and mediation on connecting projects of 10 megawatts and less to the grid.

The legislation follows years of complaints by solar companies about disputes with utilities, Xcel Energy in particular, that have contributed to years-long delays for some projects to connect.

“We hope that we can create a role dedicated to understanding the entire interconnection process and help manage those disagreements when they arise,” said Logan O’Grady, executive director of the Minnesota Solar Energy Industries Association.

The legislation says the ombudsperson will track disputes and serve as a mediator between customers and investor-owned utilities. They will be expected to review policies, convene stakeholder groups, and assess ways to reduce conflicts.

O’Grady said customers, installers, and developers could contact the ombudsperson for assistance on issues involving rooftop, commercial, or community solar projects. 

The ombudsperson would not eliminate the state’s existing dispute process for interconnection issues, which can take over a month and require mediation if unresolved issues remain.

O’Grady said he hopes having an interconnection ombudsperson will more efficiently resolve some disputes and provide a new option for developers that haven’t wanted to deal with the time and attention required to file a formal complaint.  

Solar developers’ complaints have varied, but some involve inaccurate information leading to “weeks of back and forth to get clarity on a simple misunderstanding,” O’Grady said. The hope is that an ombudsperson with experience in the industry could more efficiently answer those questions or know who to contact in utilities to provide guidance. 

State Rep. Patty Acomb, a suburban Democrat and chair of Climate and Energy Finance and Policy committee, said the ombudsperson’s work is less likely to draw skepticism because it comes from an independent source.

Solar company leaders support the new position. Bobby King, Minnesota program director for Solar United Neighbors, said the ombudsperson could “centralize” information, advocate for interconnection, create solutions to improve the process and avoid litigation. “I think it’s a positive step in the right direction,” King said.

Michael Allen, CEO of All Energy Solar, said the ombudsperson would provide “unbiased information” to the Commerce Department, the Public Utilities Commission, installers, and utilities. He also believes an ombudsperson could reduce the number of disputes that reach the Public Utilities Commission.

Marty Morud, CEO and owner of TruNorth Solar, said he’d had few issues with Xcel but sees an ombudsperson as a source for helping move utilities to respond if installer emails and phone calls go unanswered.

More than a dozen states already have positions similar to interconnection ombudspersons, including California, Massachusetts and New York. Sky Stanfield, a lawyer who works with the Interstate Renewable Energy Council, said states approach the ombudsperson differently, not all requiring them to have the technical skills Minnesota seeks.

She said that having someone see all the disputes and detect patterns could also help the Public Utilities Commission target rulemaking in problem areas. 

“I do think having a person whose job is to stay up to date on what is happening seems to me like a positive step,” Stanfield said.

To be effective, the ombudsperson must be “empowered” by the Public Utilities Commission and accepted as an objective mediator by utilities and clean energy developers, she said.    

The Legislature created an initial $150,000 budget. The ombudsperson position, which has not been posted, is expected to be filled later this year.

Minnesota lawmakers hope ombudsperson can help defuse solar interconnection disputes is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.