Minnesota first to develop Value of Solar tariff methodology for use statewide

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The Minnesota Department of Commerce Division of Energy Resources (Commerce) has kicked off a stakeholder engagement process that will lead to the development of the methodology of an optional Value of Solar™ tariff for the Minnesota Investor Owned Utilities (IOUs). This project is the first of its kind; never before has a state established guidelines for a Value of Solar tariff.

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Commerce has undertaken this project as a result of state legislation passed earlier in 2013 that requires development of a Value of Solar methodology. The resulting tariff would compensate customers through a credit equal to the value of the electricity produced. The Value of Solar tariff can be offered by IOUs as an alternative to net energy metering (NEM).

What’s most notable about this project is the focus and attention on the stakeholder process. The Commerce open engagement process is playing a vital role in the development of the methodology, and is bridging the communication gap between industry, utilities and ratepayers. Often, Value of Solar studies are undertaken by individual parties without input from the various stakeholders that are involved and affected by the outcome.

This is evidenced by numerous studies conducted in the past few years, each with varying involvement from stakeholders, varying methodologies, and with varying input assumptions. This often leads to significant disagreement in the results, typically stemming from disagreements about which methodologies and cost components were used in the analysis. Commerce is avoiding this pitfall by involving stakeholders throughout the methodology development.

Commerce kicked off the process on September 17, 2013, with a stakeholder workshop led by Rocky Mountain Institute. Stakeholders from various groups were invited to attend, including ratepayers, solar owners, utilities and the solar industry. The objective of the first workshop was to provide an introduction to Value of Solar concepts exercised around the country, and to develop a general understanding of the methodologies. Initial comments from stakeholders have been received and posted for public review.

At the second workshop, scheduled for October 1, 2013, Clean Power Research will join Commerce in a discussion that dives deeper into the framework of the methodologies used in a typical Value of Solar study. The process won’t end there: two additional workshops will be held in October and November, and the public is invited to provide comments and feedback to Commerce. All this information will be used to develop a recommended Value of Solar methodology that will be submitted to the Minnesota Public Utility Commission for review by January 31.

The open stakeholder process that Minnesota has embarked on holds the promise of developing a fair and unbiased Value of Solar methodology that can be applied equitably by the utilities in Minnesota.

For the complete schedule of events, see the Commerce announcement.