Big power users face potentially smaller harvest from community solar gardens in Minnesota

Large customers of Xcel Energy Inc. that signed up for shared solar energy projects are getting squeezed by a new size restriction and may not get all the solar power or cost savings they expected.

This problem affects Ecolab Inc. and Macalester College in St. Paul, St. Olaf College in Northfield and many government units and schools, including the city of Minneapolis and the St. Paul Public Housing Agency.

They want to offset electricity use by subscribing to community solar gardens — acres of solar panels planned by independent energy companies on the metro-area fringe and plugged into Xcel’s distribution grid. Large power users are seen as “anchors” for such projects, whose remaining output could go to residential and business customers that want solar.

State regulators’ recent decision to limit the number of solar gardens per site — a change sought by Xcel and supported by some solar developers — has clouded the prospects for corporate and institutional deals. At least some are being renegotiated, and others face uncertainty about whether energy companies can deliver all of the promised solar power, customers say.

“It looks like everything is going to be scaled back, but I don’t know how much that’s going to be,” said Louise Toscano Seeba, general counsel for the St. Paul Public Housing Agency, which intended to offset with solar all the power used in 17 buildings, saving $183,000 annually on electric bills.

At St. Olaf College, which aimed for an all-renewable campus, the solar size limit is an obstacle to that goal, at least for now. Its deal with solar developer Geronimo Energy of Edina called for a 15-megawatt solar garden to be built on college land, with St. Olaf subscribing to the maximum-allowed 40 percent of the electricity. Under new limits, the project must shrink by a third, to 5 megawatts, sharply reducing the college’s share. A megawatt is 1 million watts.

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