A bill introduced in Minnesota threatens to reshape the community solar program and financial incentives for residents who generate their own solar energy.
Community solar advocates note that the program was just updated in 2023 to prioritize low-income communities. And the net metering system that essentially pays household producers of solar power has been operating, in some form, for more than 40 years, according to Canary Media.
What's happening?
The Minnesota Senate advanced a bipartisan energy omnibus bill this spring. By definition, it aims to make a number of changes. One would be to end the state's community solar program in 2028.
Another big change would be to net metering, which enables residents who generate their own power with at-home solar panels to sell excess energy back to the grid in exchange for credits. According to Canary, "The Senate bill would eliminate that option for systems in electric cooperative and municipal utility territories that apply for grid connections after Dec. 31, 2026, and instead set compensation using a less generous 'avoided cost' standard."
Critics of the bill note that customers living outside of major cities could be hardest hit by this change — people like farmers and rural families. Proponents of the bill say small, rooftop systems are not efficient and large-scale projects should be prioritized, while others note that could put companies first.
Why are financial incentives important for solar?
In 2023, then-Governor Tim Walz signed a bill setting 2040 as the year by which all of the state's energy would come from clean, carbon-free sources. Climate-positive initiatives like net metering and community solar have been seen by many as a part of the plan to meet that fast-approaching deadline.
The local CLEAR Energy Coalition wrote to Senate committee members in April, opposing the changes the bill would make to net metering, saying that they "would unfairly reduce compensation for rooftop solar owners in rural areas and small towns ... . This would take away options from farmers, households, and small businesses who want to lower their energy costs."
Of community solar programs, Pouya Najmaie, policy and regulatory director at Cooperative Energy Futures, said in a statement that they "power 30,000 Minnesotans, create local jobs, and save people money, especially renters, low-income households and public interest institutions."
"All of this makes it the largest and most equitable form of solar in the state," Najmaie continued. "Killing this program is a gift to monopoly utilities—and a slap in the face to workers and families."
Proponents of the bill say these programs have been successful, but their time is over. In an editorial for the Star Tribune, Minnesota Rural Electric Association CEO Darrick Moe and Minnesota Municipal Utilities Association CEO Karleen Kos called them "outdated" and unfair to low-income families who can't afford solar panels themselves.
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Heck yes! 💯 What's being done to promote solar energy adoption?
News about proposed changes like this can be discouraging for homeowners who want to save money on their utility bills while contributing less pollution to the environment. It's worth noting that the Minnesota bill has not yet passed and could be altered as it moves through the legislative process. Constituents who voice their preferences for its final form could end up influencing the path it takes.
Meanwhile, community solar programs thrive in many other places. They can often provide a lower barrier to entry for those who desire access to clean energy and cost savings.
And since 2022, the Inflation Reduction Act has offered tax credits and rebates to U.S. residents switching to solar and similar upgrades. The Trump administration has voiced an intention to end its incentives, so those looking to take advantage of potential savings on solar systems might consider acting sooner rather than later. Legally, however, it would take an act of Congress to make major changes to the IRA.
While local policies continue to be worked out, the technology has been advancing. Developers have created high-efficiency tandem solar panels that produce more energy than standard versions while taking up the same amount of space. Thin, flexible panels are also in the works, as is wearable solar tech.
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