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PUC approves Value of Solar Methodology; state is first to set methodology

The Minnesota Public Utilities Commission (PUC) on March 12 approved the Minnesota Value of Solar Methodology submitted by the Minnesota Department of Commerce, making Minnesota the first state to adopt a statewide formula for calculating the value of customer-generated solar power. The value of solar methodology provides investor-owned utilities with a tariff they can offer customers as an alternative to net metering and as a rate for community solar gardens. A final written order from the PUC is expected by April 1.

The alternative value of solar tariff is meant to achieve for utilities a price that reflects the true value to the utility of solar electricity as a resource that includes offset environmental costs and fuel price volatility of conventional energy resources.

The process to develop a Value of Solar Methodology began in May 2013, when legislation was passed requiring the Department of Commerce to establish a methodology (Minn. Statute § 216B.164, Subd. 10). The statute allows for a solar tariff that “compensates customers through a credit for the value to the utility, its customers, and society for operating distributed PV systems interconnected to the utility and operated by the customer primarily for meeting their own energy needs.”  Commerce led four public workshops last fall to solicit stakeholder input. A methodology was submitted to the PUC on January 31, 2014. Ongoing developments in the PUC review process can be found at Docket No: E999/M-14-65.