While power companies are pushing the argument that solar power generators should be forced to sell power back to the grid at a discount, Minnesota has created a formula that values solar power at its real value. The state’s PUC recently voted to value the power sold through MN’s new solar gardens program at its real value, using its “value of solar” tariff.
MN’s value of solar tariff is the first rate tariff that takes into account the damage that fossil fuels do to the American economy.
Utilities have complained that paying the retail rate, under a policy known as net metering, amounts to an unfair subsidy for customers that own solar panels at the expense of those who don’t. Meanwhile, solar advocates say the retail rate underestimates the value of solar panels to the grid and society.
Minnesota Gov. Mark Dayton signed a bill last year requiring the state’s energy office to develop a formula that utilities may use to determine how it should compensate customers who generate electricity from solar panels.
‘This isn’t an incentive’
Wednesday’s debate, which follows nearly two years of discussions among state officials, utility representatives and solar advocates, focused largely on the cost of carbon emissions, of which there were three main options.
One was referred to as the “established externality value” and was created by Minnesota utility regulators two decades ago as a tool to help the commission evaluate resource options.
The value has been updated for inflation but never fully reevaluated, and the commission recently agreed with environmental groups that the numbers are “outdated and no longer scientifically defensible.”
Another was referred to as the “planning value” and was created in recent years to help Minnesota utilities and regulators estimate the likely cost of complying with future carbon regulations. That number doesn’t reflect the cost to society in health or environmental damages from carbon, something the Minnesota law requires to be included in the formula.
Instead, the commission voted to adopt the federal government’s social cost of carbon figure, which environmental groups and the state’s Department of Commerce argued was the best fit for a value-of-solar formula.
“The social cost of carbon is specifically focused on measuring what is the economic and health damage of emitting one more ton of carbon,” said Erin Stojan Ruccolo, director of electricity markets for Fresh Energy.
In other words, MN is one of the few states in the US whose utility regulators operate in the real world where people die from fine particulate matter inhalation and mercury from coal-fired power plants poison water.
MN has also created one of the most extensive community solar programs in the US, where families and businesses can share the benefits of large, local solar panel arrays. The “community solar gardens” provide a real step forward in solar power generation. The community solar projects allow people who don’t own property with good solar exposure to get their electricity from locally generated solar arrays.
Could we do this here in WV? Of course we can, but the state’s coal industry has our energy system and business community in a death grip.