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Incentives/Policies for Renewables & Efficiency

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Net Metering   

Last DSIRE Review: 01/07/2015
Program Overview:
State: Minnesota
Incentive Type: Net Metering
Eligible Renewable/Other Technologies: Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Municipal Solid Waste, CHP/Cogeneration, Anaerobic Digestion, Small Hydroelectric, Other Distributed Generation Technologies
Applicable Sectors: Commercial, Industrial, Residential
Applicable Utilities:All utilities
System Capacity Limit:Current rules: Less than 40 kW
Per H.F. 729: 1 MW
Aggregate Capacity Limit:No limit specified
Per H.F. 729: The PC may limit cumulative generation. IOUs may request a cumulative generation limit once generation has reached 4% of annual retail electricity sales.
Net Excess Generation:Systems under 40 kW: Reconciled monthly; customer may opt to receive payment or credit on next bill at the retail utility energy rate
Per H.F. 729: For systems 40 kW-1 MW, NEG is credited at the avoided cost rate, or customers may elect to be compensated in the form of a kWh credit. Excess credit will be reimbursed at the end of the calendar year at the avoided cost rate.
REC Ownership:Customer owns RECs
Meter Aggregation:Current rules: Not addressed
Per H.F. 729: Allowed for IOU customers
Authority 1:
Date Enacted:
Date Effective:
Minn. Stat. ยง 216B.164
Authority 2:
Date Effective:
Minn. R. 7835.3300
Authority 3:
Date Effective:
Minn. R. 7835.9910
Authority 4:
Date Enacted:
Date Effective:
Docket No. CG-12-146
Authority 5:
Date Enacted:
H.F. 729
Authority 6:
Date Enacted:
Date Effective:
Docket No. CI-13-720

Note: H.F. 729, enacted in May 2013, includes many changes to Minnesota's net metering law.  These changes are described above, but most will not take effect until rules are implemented at the PUC. The below summary reflects the current rules.

Eligibility and Availability

Minnesota's net-metering law, enacted in 1983, applies to all investor-owned utilities, municipal utilities and electric cooperatives. All "qualifying facilities" less than 40 kilowatts (kW) in capacity are eligible.* Capacity is measured based on a system's output averaged over a 15-minute interval. There is no limit on statewide capacity. In July 2012, the Public Utilities Commission opened Docket No. E-999/CI-12-785 in order to determine the minimum amount of electricity a customer must consume on site in order to qualify for net metering.

During the 2013 legislative session, the Legislature amended Minn. Stat. § 216B.164 governing cogeneration and small power production. The statute governs interconnections between qualifying facilities and utilities, and the statutory changes primarily affect interconnections with public utilities.The changes increase the net-metering capacity threshold capacity for facilities interconnecting to a public utility. Under the changes, the threshold increases to less than 1,000 kilowatts (kW) from less than 40 kW.

Net Excess Generation

Each utility must compensate customers for customer net excess generation (NEG) at the "average retail utility energy rate," defined as "the total annual class revenue from sales of electricity minus the annual revenue resulting from fixed charges, divided by the annual class kilowatt-hour sales." This rate is basically the same as a utility's retail rate. Compensation may take the form of an actual payment (i.e., check for purchase) for NEG or as a credit on the customer's bill. For systems 40 kW to 1 MW in size, NEG will be credited at the avoided cost rate. Alternatively, a customer may elect to be compensated in the form of a kWh credit. Excess credits will be reimbursed at the end of the calendar year at the avoided cost rate.

Aggregate Net Metering

H.F. 729 requires public utilities to offer meter aggregation for customers that request it. The meter must be owned or leased by the customer requesting aggregation, and must be located on contiguous property owned by the same customer. The total aggregate of all meters is subject to the same net metering size limitations described above. “Contiguous property” means that the property shares a common border without regard to any easements, transportation right of ways, public thoroughfares, or utility right-of-ways. Utilities must comply with aggregation requests within 90 days. The aggregation of meters only applies to charges that use kWhs as the billing determinant. NEG is credited to the next monthly bill in the form of kWh credits. Utilities may request permission from the PUC to charge administrative fees for meter aggregation.

Renewable Energy Credits

The Public Utility Commission ruled in July 2014 that the customer-generator retains ownership of RECs associated with the energy generated by the system.

Community Solar Gardens

On December 12, 2014, Xcel Energy launched it’s  Solar Rewards Community program. Subscribers can purchase subscriptions to a solar garden system developed by a Garden Operator who must have a state certificate of good standing.The Deposit amount for Garden Operators is $100/kW for all community solar gardens. A garden must always have at least 5 subscribers, of which no single subscriber may have more than a 40% interest, and each subscription must be no less than 200 watts of the system’s generating capacity. Subscribers must be retail customers of the utility and located in the same county or a county contiguous to where the facility is located. There is no limit to the number of solar gardens which can be placed on a property, but no single garden can exceed the 1 megawatt PV system cap. Subscribers will receive a credit on their electric bill for the energy produced by the garden. Subscribers are compensated at the applicable retail rate. Community projects may also be eligible for the solar performance based incentives offered by  Xcel Energy or the Department of Commerce.  The utility that offers the program may own the PV system, or another entity may own the project. Systems may be ground- or roof-mounted, must be located within the utility service territory, and may not exceed system capacity and generation limits that apply to all net-metered systems.

*The term "qualifying facility" is defined in the federal Public Utility Regulatory Policies Act of 1978 (PURPA). It generally includes most renewable-energy systems and combined-heat-and-power (CHP) systems.

  Energy Information Center
Minnesota Department of Commerce
Division of Energy Resources
85 7th Place East
Suite 500
St. Paul, MN 55101-2198
Phone: (800) 657-3710
Fax: (651) 539-0109
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2014 - 2015 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.