Illinois has $30 million in incentives available for solar installations on multi-family buildings. 

So far, though, the state program has not received any applications for such projects, according to Jan Gudell, Illinois Solar for All associate director at Elevate, the organization tasked with running the state program. 

In urban areas like Chicago, residents of environmental justice and lower-income neighborhoods are highly likely to live in multi-family residential buildings where it is extremely difficult to install rooftop solar. 

There is little incentive for a landlord to invest in solar that will provide cost savings to the tenants, and rooftops may need significant upgrades to handle solar. In condo buildings, homeowners association bureaucracy and other concerns must be navigated.

There’s also a lesser-known logistical and structural barrier — if solar is to be channeled to individual residential units behind the meter, a separate solar system is essentially needed for each unit — with separate inverters and wiring.

“That’s a lot of hardware, space and cost,” said Aliya Bagewadi, US director of strategic partnerships for Allume Energy, an Australian startup company that says it can address at least this part of the puzzle, by sending energy to individual units with only one inverter and system. 

The company has served thousands of customers in Australia, New Zealand and Europe with its SolShare technology. Now it is rolling out in the U.S., in sunny southern states as well as Illinois, because of the state’s robust solar incentives. 

“It’s inherently an energy equity issue,” said Bagewadi, who is based in Chicago. “We know [multi-family building residents] are much more likely to be lower-income, longer-term renters. We want to make sure those savings flow to people who can really benefit the most.”

Direct benefits 

Illinois isn’t alone in the lack of multi-family solar arrays. Solar developers and advocates have long noted the challenge nationwide, especially for affordable multi-family rental buildings. A 2022 study by Berkeley lab noted that in 2021, about 3% of solar installed in the U.S. was on multi-family buildings, mostly owner-occupied condos. 

“Solar may be a non-starter in a rental multi-family property because the owner may be looking at a complex, expensive and time-consuming process, where they would have to consider the design, permitting, installation, interconnection, and cost for multiple systems,” said Gudell. “For many property owners, this may be unaffordable and unimaginable.” 

A 2018 study by the National Renewable Energy Laboratory found that the majority of potential capacity for new solar serving low- and moderate-income customers is on renter-occupied multi-family rooftops. California passed a law in 2015 specifically to address the dearth of solar on multi-family buildings, promising to invest up to $1 billion by 2031.

There are typically several ways to handle rooftop solar on multi-family buildings. 

In rental properties, the building owner can own the array, and use the energy to power common areas, like hallways, a pool or gym. Owners can also allocate a portion of the energy savings to tenants, by charging an amenity fee or otherwise collecting some revenue themselves. 

Alternately, the energy can all be sent back to the grid, in areas with viable net metering policies, and the compensation can be shared with tenants or among condo owners, often referred to as virtual net metering. Community solar offers a similar situation — where the solar isn’t onsite at all, but residents can subscribe to partake in savings. 

Solar advocates, developers, lenders, and policymakers have all been working at state and federal levels to improve opportunities for virtual net metering and community solar. 

These arrangements, however, can still be unattractive or impossible depending on state and utility policy. Community solar isn’t even legal in some states, and virtual net metering depends on utility participation. 

The California law requiring solar on new multi-family construction up to three stories high exempts areas served by utilities that don’t offer virtual net metering.

SolShare avoids these challenges by sending electricity directly from the solar array to individual users, without involving utilities or the grid.

“You can do behind-the-meter with direct benefit to tenants,” said Bagewadi. “We’re physically pushing the electrons to multiple meters.”

Possibilities 

Allume partners with solar installers and developers to help deploy rooftop solar on multi-family buildings, including by working with landlords to design financial structures that benefit both the building owner and tenants. In some cases, Allume acts as the solar developer itself. 

With SolShare, a building owner or manager can allocate energy from a shared solar system, based on unit square footage, in equal amounts, or however they choose. 

Where the technology is deployed in Australia and the UK, energy can be sent to different units on demand, Bagewadi explained. In the U.S., the rollout in Florida and Mississippi is being done with preset amounts that can be changed with 24 hours notice. 

An Allume case study from a 64-unit Orlando apartment building with SolShare notes that a 392-kilowatt rooftop system resulted in savings of almost $100 per month for each unit, with electricity purchased from the grid reduced by almost 60%. While the idea is for residents to use solar behind the meter, excess solar can be sent to the grid. Adding an on-site battery to the mix lets residents use all the power on-site behind the meter, and makes solar power available when the grid is down.

Solar advocates hope the EPA’s $7 billion commitment to the federal equity-focused Solar for All program — separate from Illinois’s state program — will “further unlock multi-family solar,” in Bagewadi’s words.

Gudell said Elevate and other experts know there are many Illinoisans living in multi-family rental buildings that would qualify to have solar installed through Illinois Solar for All. They hope policy and technology evolve to match the available funding. 

“We’ll need a solution that addresses the split incentive problem for rental situations, where the building owner cannot or will not subsidize solar for tenants; and the complexity of bringing solar to multiple electrical accounts at one building,” Gudell said. 

“Adoption of a technology that allows for a single system to be split into shares, for use by multiple electrical account holders, could help in that it would simplify the design, permitting and installation process.”

Startup pitches new model to unlock solar for multi-family buildings, in Illinois and beyond 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.

A pending youth climate lawsuit in Maine represents the latest iteration of legal strategies aimed at holding states accountable for emissions-cutting targets. 

The case is one of a growing number responding to lagging progress on state climate laws that, in many cases, have now been on the books for years. What makes the Maine case unique is its targeted approach – focused on electric vehicle policy as a way to push the state forward on climate action. 

The case, filed earlier this year by the nonprofits Conservation Law Foundation (CLF), Sierra Club and Maine Youth Action, argues that the Maine Department and Board of Environmental Protection have fallen short on their legal duty to pass rules that will help achieve Maine’s required emissions reductions.

“There are countless solutions for tackling these various sources of climate-warming pollution,” said CLF senior attorney Emily Green, who is based in Portland, Maine. “But you need something more to make sure that it’s all enough, that it all adds up, and that’s where enforceable standards come in.” 

The Maine Attorney General’s office declined to comment, but has moved to dismiss the case. A ruling on next steps is now pending. 

Advocates focus on EV rulemaking

The case focuses on a 2019 state law that requires Maine to lower its greenhouse gas emissions 45% from 1990 levels by 2030 and 80% by 2050. 

Statutes like this are “where the rubber meets the road,” said Columbia Law School professor Michael Gerrard, faculty director of the Sabin Center for Climate Change Law. “The regulations are the teeth, the specifics on who needs to do what.” 

Such rules translate emissions goals into practical requirements for state executive agencies, processing legislative directive “into what polluters are required to do on a day-to-day basis,” said Jennifer Rushlow, an environmental law professor at Vermont Law and Graduate School.

Maine’s climate law said the state “shall adopt rules to ensure compliance” with the emissions targets, requiring those rules to prioritize reductions “by sectors that are the most significant sources.” 

Transportation contributes more than half of Maine’s emissions, and Maine’s climate plan prioritized electric vehicle adoption as a result. But the state is a long way off from its EV targets. It has about 12,300 EVs on the road now, with climate plan goals of 41,000 by next year and 219,000 by 2030. 

The CLF suit takes regulators to task for repeatedly failing to adopt California’s latest electric car and truck standards, which some states use as a more stringent alternative to federal rules. 

Maine has used California’s Advanced Clean Cars I rule for years, but voted earlier this year against adopting Advanced Clean Cars II, which would have required increasing EV sales in the state over the next several years. It’s also chosen twice not to consider adopting the Advanced Clean Trucks rule.

CLF notes that the state’s climate law requires the adoption of rules that are “consistent with the climate action plan,” first released in 2020. A roadmap for meeting the plan’s transportation goals strongly recommended adopting Clean Cars II, calling it “the most important regulatory driver in the electrification of Maine’s light-duty vehicles in the next two decades.”

State says harms are uncertain

In its motion to dismiss the CLF case, the state argues that Maine’s climate law does not require regulators to adopt all climate plan recommendations, or particular ones, as rules. 

The state has approved a handful of other rules under the climate law. Two focus on tracking emissions, and two others look at what Green called “narrow slices of the building sector,” the state’s second-largest emissions sector. These rules target hydrofluorocarbons and energy efficiency in appliances. 

In their motion, attorneys for the state quote a Maine Supreme Court decision from a separate environmental case earlier this year to argue that it is “simply ‘too uncertain’ … whether future harms will occur that will ‘directly and continuously impact’ any of Plaintiffs’ members.” 

CLF’s response lists a range of climate-linked harms that specific members of the plaintiff groups say they’ve already experienced, from increasing tick-borne illness and other health impacts to crop and flood damage.

“Climate change is here. Mainers are feeling the effects from a warming Gulf, from climate-driven storms,” Green said, adding that state lawmakers have repeatedly made similar statements in recent years. “Each day that passes with further inaction is a day wasted.” 

The state also argues that the “shifting sands” of state and federal climate policies that could affect Maine’s targets create too much uncertainty around harms from a current lack of transportation rules. 

In general, Gerrard said, such factors don’t negate the need for rulemaking. “We are way behind in reducing emissions, and so the fact that other things are happening isn’t going to solve the problem.” 

Green said that while Maine has made strides on expanding EV charging infrastructure, for example, “the actual standards are necessary to give that transition the push it needs.” 

“Binding rules can basically act as a backstop,” she said. “They can ensure the accountability that the investment and the rebates and the education and outreach, on their own, can’t do.” 

Narrower lawsuits get results 

The suit’s transportation focus is notable, experts said. “I would say the energy sector is targeted more frequently, and especially the fossil fuel sector,” Gerrard said. Other climate-adjacent transportation cases have focused on vehicle emissions standards, biofuel mandates or highway projects, he said. 

Rushlow sees the Maine case as a blend of a 2016 suit, also from CLF, which found that Massachusetts wasn’t fulfilling its 2008 emissions-cutting law, and a suit against the Hawaii Department of Transportation, where a recent settlement will require the decarbonization of Hawaii’s transportation sector by 2045. 

Rushlow worked with CLF on the Massachusetts case, but is not involved in the Maine suit and reviewed it after being asked to comment for this story. She said the Maine case lays out why having regulations on transportation emissions is “not just a wish” of the state climate council, but a legal requirement.

“The lawsuits that get really broad can get kind of lost to politics,” said Rushlow. “These lawsuits that are more narrow and focused on the language of particular state laws, I think, can stand a good chance.” 

She said there are also more “hooks” to do this at the state level than federally. Gerrard agreed that it’s easier to bring cases under specific statutes than “a constitutional provision or a common law doctrine.” 

Both the Hawaii case and the landmark Held v. Montana, which is now on appeal before that state’s Supreme Court, successfully took a state constitutional approach, using their legally given rights to a clean and healthful environment to push for climate progress. 

Victories of public opinion

Practical legal results aren’t the only positive impact these cases can have, Rushlow said: “There’s also outcomes in the zeitgeist and public opinion.” Though Juliana v. United States failed in court, she said, it “really drew a lot of attention to the future harm we’re causing our youth — and the current harm.”  

But she sees increasing potential for success among a greater share of climate lawsuits just in the past few years, as plaintiffs learn more about how courts are likely to receive different approaches. 

“It feels to me like progress is being made,” she said. “But the courts are never the first place you want to go when you’re looking for rapid, systemic change. They’re slow, they’re backward-looking, they’re conservative. And so it’s a challenging forum for the kind of change we need, and yet necessary.” 

In Maine, climate groups initially tried a regulatory petition to push for the passage of Clean Cars II. 

“When it became entirely evident that that was not going to happen, our hand was sort of forced,” Green said.

Maine faces lawsuit for failing to adopt EV mandates, the latest state-level climate court case 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 leader of a local anti-solar energy group admitted to Ohio regulators last week that a well-connected natural gas executive is among the group’s largest donors.

The testimony by Jared Yost, founder of Knox Smart Development, offered the fullest view yet of the group’s ties to fossil fuel interests, undercutting its claims to be a “grassroots” advocate for local farmers and other residents.

“It changes the story quite a bit,” said David Pomerantz, executive director of the Energy and Policy Institute, a watchdog group that recently published a report on the fossil fuel industry’s long history of using money and misinformation to stoke local opposition to renewable energy projects.

Knox Smart Development emerged late last year as a high-profile local opponent of the proposed 120 megawatt Frasier Solar project, located near Mount Vernon, Ohio. Questions emerged about its funding source after it hosted a town hall meeting at a local theater with complimentary food and drinks for approximately 500 attendees.

Yost disclosed during an Ohio Power Siting Board hearing last week that one of its largest donors is Tom Rastin, the former vice president of Ariel Corporation, which makes compressors for the oil and gas industry. The Washington Post reported last year that Rastin is also a leader of The Empowerment Alliance, a dark money nonprofit that advocates for the natural gas industry.

Yost said he did not have knowledge about Rastin’s work with The Empowerment Alliance, but said the fossil fuel group provided “non-financial” resources to Knox Smart Development to help oppose the Frasier Solar project.

Yost denied being swayed by corporate interests and said his group has not received corporate funding. “The Empowerment Alliance has nothing to do with me or [Knox Smart Development],” he told the Energy News Network via email. “I have reached out to them and asked questions on a couple of occasions, as can anyone, and as I have done of others.”

Multiple links

When asked in his hearing testimony if Knox Smart Development was “funded by any individuals or entities having any interest or providing any goods or services to the fossil fuel industry,” Yost answered, “No, not directly to the best of my knowledge.”

On cross-examination, however, Yost admitted Rastin was one of the group’s largest funders. Yost is a former IT specialist at Ariel Corporation, and his work supported Rastin’s department. Rastin’s wife, Karen Buchwald Wright, is a former president and CEO of Ariel and continues as board chair. Her son Alex Wright succeeded her in 2021 as CEO.

A July 2024 report from the Energy and Policy Institute includes links to recently produced public records. A September 2023 email shows Rastin was slated to speak to the Ohio General Assembly’s Business First caucus in October. The email attached a copy of Rastin’s biography with The Empowerment Alliance logo on top.

Mitch Given, who was identified in a meeting with Ohio lawmakers last year as The Empowerment Alliance’s Ohio director, spoke at a Knox Smart Development town hall meeting last November. There he was introduced as someone who travels across the state to help farmers and others “find their voice” and push back against solar projects.

The emcee for that town hall event, Tom Whatman, is a chief strategist for Majority Strategies. The Empowerment Alliance’s Form 990 filing for 2023 shows it paid the political consulting firm more than $620,000 that year, making it the group’s highest paid contractor for five years in a row.

Yost last week also discussed a dinner meeting last summer about the Frasier Solar project where the attendees included Rastin, Given, Whatman, Ariel employee Trina Trainor, and Lanny Spaulding. Spaulding is listed as a contact person for The Empowerment Alliance on an Ohio lobbyist registration form. Yost’s dad and others also attended. Yost had earlier said he did not organize the meeting.

Yost denied being influenced by The Empowerment Alliance or other corporate interests.

“No one has ever tried to direct me in any way with my opposition to this project. I am nobody’s ‘puppet’,” Yost told the Energy News Network. “I am doing this for me, my family, my township, and my neighbors.” He also said it was “insulting that people try to question my intentions, integrity, and intelligence. Frankly, it hurts.”

Misinformation at work

Nolan Rutschilling, managing director of energy policy for the Ohio Environmental Council, said arguments presented by behind-the-scenes special interests can be more believable if they seem to come from a grassroots effort. 

“People trust their neighbors because they are often believed to not have any outside agenda other than the best interest of their community,” Rutschilling said. “Unfortunately, this allows misinformation to spread quickly, and communities have stopped renewable energy projects from moving forward.”

The stakes are significant, he said, because local public sentiment is among the factors the Ohio Power Siting Board considers in judging whether a project is in the public interest, along with statewide interests.

“If the fossil fuel industry wants to oppose solar projects, they should intervene in the open — not by amplifying misinformation in communities,” Rutschilling said.

“The Empowerment Alliance prefers to stoke fear in hopes of snuffing out perceived competition from clean, cheap, local renewable energy,” said Craig Adair, a vice president for Frasier Solar’s developer, Open Road Renewables. “As always, Frasier Solar stands ready and willing to address local residents’ legitimate concerns about potential impacts of solar development.”  

Statements at Knox Smart Development meetings and in ads have included multiple examples of misinformation. For example, Yost admitted during cross-examination he was unaware that a photo showing damaged solar panels was taken in St. Croix after a strong hurricane — a highly unlikely event in central Ohio. 

“This was intended to show what I believe could happen,” Yost said. 

Other examples include unsupported claims about solar panels and other components releasing toxic chemicals. Steve Goreham, a speaker at the group’s November 2023 town hall, made unsupported claims about climate change. Goreham also drew spurious correlations between electricity price rises and high levels of renewable energy in California and Texas. In fact, wildfires, extreme heat and transmission upgrades were the driving factors.

Misinformation was rife in opposition testimony people gave at three local public hearings held by the Ohio Power Siting Board in Knox County.

Half of more than 100 unique arguments made by project opponents at those hearings were not supported by the facts, said Heidi Gorovitz Robertson, a professor at Cleveland State University College of Law, in her August 22 expert testimony for the Ohio Environmental Council.

“In the aggregate, the arguments do not present credible or compelling opposition to the proposed project,” Robertson said.

Connections confirmed between ‘grassroots’ Ohio solar opposition and dark-money natural gas group 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.

An array of critics came out swinging in January when Duke Energy first filed its plans in North Carolina for one of the largest fossil fuel investments in the country.  

But as the months have dragged on in the development of the company’s biennial carbon-reduction plan, some notable detractors have relented. 

Just before expert witness testimony was set to begin in Raleigh late last month, the state-sanctioned ratepayer advocate, Public Staff, and Walmart endorsed a settlement with Duke on its blueprint, which includes building 9 gigawatts of new natural gas plants that the utility says could be converted to run on hydrogen in the future.

A few days later, the Carolinas Clean Energy Business Association, a consortium of solar and wind developers, announced it had signed on too.  

The agreement, which contains some small concessions from the utility, led to low-key hearings that ended in less than two weeks. It makes it more likely that Duke will get what it wants from regulators by year’s end, including a greenlight, if not final approval, for three large new natural gas plants in the near term.

Chris Carmody, executive director of the Carolinas Clean Energy Business Association, says the proposed compromise also helps lock in forward progress on solar energy and batteries, however incremental. 

“It’s a more aggressive solar spend. It’s a more aggressive storage spend,” he said. “Certainly, we would like to see more. But first of all, we like to see it going in the right direction.” 

Clean energy advocates believe Duke’s push for new gas plants will harm the climate, since the plants’ associated releases of planet-warming methane will cancel out any benefits of reduced carbon pollution from smokestacks. At the same time, they say the investments could become useless by midcentury or sooner, before their book life is over, saddling ratepayers with costs that bring no benefits.

“There’s not much in it for their customers except unnecessary risk, cost, and more pollution,” Will Scott, southeast climate and clean energy director for the Environmental Defense Fund, wrote in a blog last month. 

But Duke’s gas bubble has proved hard to burst. For one, the company’s predictions of massive future demand from new data centers are based in part on confidential business dealings that are challenging to rebut from the outside. 

Unlike two years ago, when Duke proposed its first carbon reduction plan, no groups produced an independent model showing how Duke could meet demand without building new gas. 

“We can talk about costs, or market conditions,” said Carmody. But, he said, “we did not do any modeling.”

Public Staff ran its own numbers and has urged more caution on new gas plants than Duke proposes. But the agency is unwavering that at least some are needed.

New Biden administration rules haven’t yet proved the death knell for gas that some expected. Duke is suing to overturn the rule, but it insists that building new plants that will run at half capacity is the most economical plan for compliance.

And even as Duke is proffering more gas, it’s also undeniably proposing more solar.

Clean energy backers still object to annual constraints on solar development the utility says are necessary. But the limits have increased from less than 1,000 megawatts per year in 2022 to over 1,300 megawatts. And the settlement would result in another 240 megawatts of solar than Duke had first proposed.

“It’s an iterative improvement,” said Carmody. 

What’s more, the settlement opens a discussion with Duke about the scores of 5-megawatt solar projects across the state whose initial contracts will soon expire. A proposal for how to refit them could come in April of next year. 

“This is a really important issue to our members,” said Carmody.  “These are projects that could be repowered. They could be upgraded with storage. They could have significantly more efficient solar technology than was on them 15 or 20 years ago.” 

Still, Carmody said his group tried to word the settlement in a way that left room for clean energy advocates to continue to advocate for less gas and steeper emissions cuts sooner — and that’s certainly their plan. 

“Three power plants that will be really expensive to build and then operate for only a few years is just a ridiculous proposal,” the settlement notwithstanding, said Maggie Shober, research director for the Southern Alliance for Clean Energy. 

“We remain hopeful that there’s a lot that the [commission] can do in this carbon plan proceeding and in their final order, to move us forward on a clean energy trajectory.”

Nick Jimenez, senior attorney for the Southern Environmental Law Center, acknowledges the settlement stacks the deck somewhat against his clients. 

“Historically, the commission approves a lot of settlements,” he said. “It likes to see parties settle, especially when Duke and the Public Staff are involved.”

Former critics start to coalesce around Duke Energy’s plans for more gas, solar in N.C. 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.

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.