Click the links below to read parts 1-4 of Ralph Jacobson’s The Pathway to Larger-Scale Solar in Minnesota series.
Click the links below to read parts 1-4 of Ralph Jacobson’s The Pathway to Larger-Scale Solar in Minnesota series.
IPS Solar is now Impact Power Solutions.
We are proud to share that we have a new name and brand identity! It’s a different look, but rest assured, our core beliefs haven’t changed at all. Our unwavering commitment to our values, our customers and our mission remains the same.
All companies work to generate profits and create value, but the best run-companies do more. They have a broader, more complete view of corporate responsibility that is focused on creating value for all. That mindset has helped pilot our business for 30 years, emphasizing long-term success over short-term gains. Now, as our company enters this exciting new era, we feel that it’s time to update our name and mission to reflect those beliefs.
We believe our new name, Impact Power Solutions, better embodies who we are, what we believe in, and how we help our clients succeed. As we grow, so does the impact we have on our clients, the communities we serve, and the climate. We are dedicated to maximizing that impact on and off the balance sheet.
That means continuing current initiatives like our Sunrise Educational Program and our efforts promoting local workforce development, while starting new ones like our partnership with the American Forests Organization to plant one tree for every kilowatt of solar we install.
Company founder Ralph Jacobson is taking on a new role as Chief Equity & Inclusion Officer. This will allow him to expand his efforts with under-represented communities. Ralph is working on phase two of the Red Lake Solar project this year, bringing in tribal members to learn about solar technology and career pathways while installing panels on roofs.
Our core purpose – to build a better future by providing access to renewable energy – has always been the foundation of our success, and will remain the cornerstone of who we are as we take on a new name and look.
We’d like to extend a heartfelt ‘thank you’ to all of the clients and partners who have helped us make the last 30 years a success. We can’t wait for the next 30!
Author: Eric Pasi
Clean energy can and should be the focal point of a post-pandemic recovery. Wind, solar, electrification and energy efficiency projects create jobs, bolster rural and urban economies, and can transform the social inequities made transparent by this virus. Currently, about a quarter of electricity production in Minnesota is renewable, a number that has been steadily rising over the last decade.
A series of studies released this month by E2 and BW Research showed that clean energy jobs have grown 10.2% year over year since 2015; one of the fastest growing sectors in the U.S. But like the rest of the economy, clean energy needs a stimulus. According to the same research the sector lost more than 106,000 jobs in March – erasing all gains made in 2019.
Blueprint: 2009 federal grants
Policymakers should look to the American Recovery and Reinvestment Act of 2009 as a blueprint. The ARRA provided grants in lieu of tax credits so that businesses could invest even if their tax liabilities were low or nonexistent. In 2010 our company, IPS Solar, helped a local hardware store and a nursery in Lester Prairie install projects with the help of these grants, which lowered their bills and boosted our business. According to the White House Council of Economic Advisors, the ARRA helped support 900,000 clean energy jobs from 2009 to 2015. And the initial boost worked. As the solar industry ramped up, costs declined significantly; compared to 2010, solar panels today are about 89% more cost effective and efficiency has improved considerably.
Clean energy helps rural communities by providing new tax revenue for local governments. County in southern Minnesota has received $19 million in wind taxes since 2004, according to the Minnesota Department of Revenue. In 2019, wind lowered the county’s tax levy by nearly 3 percent. For the Red Wing School District, a 2016 community solar project developed and constructed by IPS is projected to save local taxpayers over $6 million.
State governments looking to address critical economic, environmental, and social issues should absolutely consider green power. In Minnesota, the Legislature controls funding in the Renewable Development Account – from fees on Xcel’s storage of nuclear waste, which has now accumulated a total of roughly $84 million since 2014. Now is the time to spend these unencumbered dollars as a clean energy stimulus.
Initiatives like Solar on Schools would provide important 21st-century learning opportunities for students and help districts save money. Energy savings from the program would return $2 to local property taxpayers for every dollar spent out of the account, when leveraged with private financing. Funding can also go toward continuing Xcel’s successful Solar Rewards program, which has specific solar incentives for small-scale solar and solar for affordable housing. These incentives in turn help businesses thrive, growing their workforces and strengthening local economies.
Finally, this disaster has highlighted abysmal disparities between wealthy and poor communities – especially for communities of color. Blacks and Hispanics are much more likely to live downstream from coal plants or near hazardous waste sites. In 2015 the death rate from asthma for black children was 10 times higher than the rate for white children. Exposure to more air pollution is one of the primary factors.
A study from Harvard University, updated on April 5, confirmed a direct correlation between long-term exposure to air pollution and a higher risk of death from coronavirus. Those suffering from respiratory illness are at a much higher risk of death. For areas in which we have information, blacks are 2.1 times as likely to die from this disease, according to data compiled by the Associated Press. Recovery dollars should go toward reducing the inequities that contribute to this overrepresentation. Strategies such as lowering vehicle emissions and replacing coal plants with clean energy must be examined.
Now is not the time to think small — all of these issues are intertwined. As tragic and disruptive as this virus is to so many across Minnesota and the country, the future complexities and price tag from the climate crisis will dwarf this pandemic. Our recovery strategy needs to be bold, and it needs to be green.
Author: Steve Oman
According to the Minnesota Sustainable Building 2030 program, projects starting design between 2010 and 2015 must reduce EUI (energy-use intensity) by 60 percent compared to an average building in 2003; projects starting design between 2015 and 2020 must reduce EUI by 70 percent; projects starting design between 2020 and 2025 must reduce by 80 percent; and projects starting design between 2025 and 2030 must reduce EUI by 90 percent.
Since the beginning of this year, IPS Solar is hearing from more Architectural and Construction firms interested to learn how to integrate solar into their sustainable building design. This seems to be driven by the decrease in EUI from 70% to 80% staring in 2020. ”We can’t get to 80% without integrating solar” is becoming a popular refrain.
While SB is mandated for State of Minnesota funded buildings only, the standard can be readily applied to other multi-family and commercial/industrial buildings as well.
Because SB2030 requires the use of onsite solar, and rooftops offer the most available unobstructed square footage, rooftop solar is often seen as the go-to solution. In many cases this is true. There are a number of issues that can make or break a rooftop solar system that should be taken into consideration early on in the design process, including:
As the building height gets taller, physical attachment of the solar array to the roof may be required instead of a ballasted system
Parapets around the building edge can increase the snow load, adding to the total dead load on the roof
Locations of rooftop penetrations, including RTU’s, power vents and drains should be positioned so as to minimize interference with the best solar array layouts.
A representative solar layout on a 5 story multi-family development might look something like this:
In the past, solar was often restricted to offsetting electrical usage in the “common areas” of the building, including heated parking, elevators, lounges, fitness areas, and meeting rooms. With the advent of distributed control systems enabling monitoring of individual unit usage instead of individual meters for every unit, it is now possible for solar to offset a much larger percentage of the total electrical load in the building. For a building with significant usable square footage, this can be the difference between whether a 40 kilowatt or 240-kilowatt solar array ends up on the roof.
One final thought – since the payback criteria for SB2030 is a relatively long 15 years, other onsite solar options that can help meet SB2030, such as solar carports and urban solar awnings, are now affordable too. Solar carports can be cost effective for a small number of parking spots or in an even more expansive configuration. And a smart solar management system can be integrated with EV charging stations to reduce demand charges.
A spin-off of the traditional solar carport structure, the urban solar awning has a power density approximately 2.5x – 3x that of a rooftop solar installations A 100kW solar awning takes less than 1/8 of an acre (20′ x 240′) and can be ideally located along the property line, in lieu of a berm/landscaping, or even alongside a parking structure as an aesthetic upgrade!
Pollinator-friendly plantings and native turf grass also provide a favorable environment for bees and help absorb water run-off.
Today there are more solar options than ever to help Architects and Developers meet SB2030. IPS Solar is committed to providing innovative, cost-effective solutions that help make integrating solar into SB2030 a reality.
Solar Carports provide another viable option to meet SB2030
Turning Solar Into Saplings!
We’re extremely excited to announce our partnership with American Forests to plant one tree for each kilowatt of solar we install in 2020 and beyond!
Climate change can’t be solved without fully using the power of forests to help capture and store carbon dioxide emissions generated by human activity. More than 14 percent of U.S. carbon emissions each year are absorbed by our forests, and there is potential to grow this natural carbon sink by restoring our forests and planting more trees.
American Forests is the oldest national conservation organization in the country. They have been working to restore threatened forest ecosystems and inspire people to value and protect urban and wildland forests for over 140 years.
Expanding the tree canopy of our nation’s forests will improve the quality of life for residents and make our communities more sustainable, beautiful and livable. We’re honored to be working with a great organization like American Forests to help make this happen!
How much can the CSG model be scaled up? (Part 3)
Author: Ralph Jacobson
What have we accomplished with the CSG model?
By the end of 2019, about 650 MW of CSGs had been installed and brought online, with another 200 MW under development. For comparison, Xcel is proposing to bring 4,000 MW of solar online by about 2035 and would prefer that most of it not be under the Community Solar Garden (CSG) model. Given that the CSG model appears as a place holder for larger scale solar in the Solar Potential Analysis report, as mentioned in Part 1, we need to consider the issues that exist now in that market segment.
Then we should ask whether it makes sense to stretch the CSG model into duty for a much bigger role than it was designed for, or do we set a course to develop other models for larger solar? One thing to keep in mind is how much uncertainty attaches to the CSG model, and how likely this is to hinder the flow of capital into vigorous deployment of larger solar in the crucial decade ahead.
Moving a half-step away from the net-metering paradigm
The CSG model was the first opportunity in Minnesota to develop larger-scale solar. There was no size cap per Garden site, and no overall planning target, until the regulators agreed to end the practice of collocating one-megawatt Gardens, which effectively limited the size to one-megawatt per site. Through this program, the local solar industry, Excel Energy, and the many affected communities have become familiar with the complex of land-use, engineering, financing, permitting, and other issues which pertain to larger-scale solar. We have all gone up a steep collective learning curve!
Although it was intended to be a step away from the “early market” net-metering framework, addressing the issue of cross-subsidization, some aspects of that paradigm have followed into the CSG model for Xcel Energy. First, it creates an open market where solar developers can originate and propose projects, instead of responding only to utility RFPs. As Gardens become more numerous and/or larger, Xcel will experience more uncertainty in its ability to plan for the timing, location, and financing of new generation.
Second, the regulators set subscriber rates close to retail-level, using the Value of Solar (VOS) tariff for the first time in the state, as set forth in the 2013 Minnesota Solar Jobs Act, to enable the financing of one megawatt CSG installations. The intent of the VOS had originally been to address the tendency of net-metering programs to “cross-subsidize” one class of ratepayers at the expense of other classes and non-participating customers – to democratize solar by spreading the benefits over all rate classes. But has the ability to finance Gardens under the VOS adequately addressed the democratization issue? Most CSG developers find it easier and more profitable to find subscribers among municipalities, schools, churches, and corporations than among the multitude of residential customers. Although the issue is still unresolved, Minnesota is now host, over Xcel’s protests, to the most vigorous CSG market in the nation. More about the VOS further on.
Uneven access to the CSG model
The language to enable the CSG model, under the 2013 legislation, was aimed only at Xcel Energy. While other utilities in the state have experimented with CSGs, such Gardens are only built as a service to those members who wish to participate. This will not support a market the way that the Xcel program does. Even in Xcel’s service territory, because of the requirement that subscribers reside in the same or an adjoining county as the CSG, farms which are located on slivers of Xcel territory in very rural counties of Minnesota do not qualify to host Gardens because there are not enough potential subscribers who qualify under that rule. Again, this seems to undermine the original intent of the program for broader access to solar.
Repeal of the contiguous county requirement would correct this uneven access with a “two-for” benefit: not only would those farmers be able to host gardens, but inner-city residents would have broader access to those solar gardens. This is because most of the CSG activity now is in a “doughnut” of counties which ring the metro area but are two counties away from residents of Hennepin and Ramsey Counties. Such a rural-urban connection could be constructed to help the program better meet the original intent.
Impact on utility business model
Unlike net-metering, where most of the power is utilized onsite, the CSG delivers all of its power to the utility as a “merchant system.” Being on the large end of the net-metering framework, the CSG has more impact on the utility electrically and on the “wholesale to retail” business model. Without a better coordination regime to address hosting capacity and congestion, the utility loses control of the ability to target new generation siting in its planning, because solar developers are free to originate projects wherever they can. Furthermore, gardens capped at 1 MW are difficult to finance beyond a short distance from substations; this limits the number of good sites for solar gardens, clusters them near substations, and keeps the cost to build relatively high.
Two very different market structures
The CSG is a policy-driven market structure which the utility has had to accept from its regulators because, through the subscriber arrangement, consumers (ie: unsophisticated investors) are involved in the transactions. This complicates the model because it is illegal to take money from unsophisticated investors, and so capital has to be provided by third parties who expect to get a much quicker return on the investment than the utility is allowed to get on its investments. Furthermore, the cost of that power to the utility is set by a stakeholder process which the utility does not control; it is currently starts at just over 9¢ per kwh.
By contrast, utility-scale solar transactions are almost entirely between the utility and its solar developer vendors. The wholesale market is more economics-driven, which aligns better with an updated utility business model where, unlike the richer context of the VOS approach, the goal is to generate electricity from solar arrays in the same cost range as from burning coal. This parity has already been achieved in some places, where the wholesale price of electric power from utility-scale solar arrays is under 3¢ per kwh (kilowatt-hour).
Potential improvements to the CSG model
If claims made by us, the solar developers, at the legislature in 2019 are to be believed, the best sites for development of CSGs have already been utilized, and further sites are more expensive to develop (that was part of our argument). Adjusting the one-megawatt collocated cap on CSGs to two or three megawatts would somewhat alleviate this constraint and expand the range of sites for financeable installations; it would also somewhat lower the cost to build new Gardens.
Allowing Xcel customers from non-contiguous counties to subscribe would fill out the CSG market in very rural areas and very urban areas of Xcel territory. Xcel representatives consistently maintain that they originally believed that subscribers would mainly be residential customers. The “residential adder” incentive, which increases the subscription rate as more residential participants are included, will align the program better with the original intent. It will attract some developers to expand into cities and towns with urban rooftop CSGs. Further, having more residential subscribers could be made a requirement for allowing larger Gardens or subscriptions from non-contiguous counties.
The CSG program needs a cap for planning purposes
The trade-off is that any deal will most certainly require a cap on how many megawatts of solar gardens which Xcel will be required to greenlight each year. There is no agreement about that yet, but a realistic cap would be a useful planning tool for everyone’s purposes. The tug-of-war of the CSG pricing and rule-making process is a tough environment for utility planning. Recognizing that the utility needs a cap for good planning, the cap should be high enough to allow the solar developers to continue to build the program out over the next 5 – 10 years to an agreed-upon overall goal of perhaps 1,500 total MW of CSGs.
How will the VOS perform at higher solar deployment?
The VOS tariff will need a different baseline as more solar comes online. The VOS is based on a thorough methodology for valuing solar in terms that are relevant to utility economics. However, the basis of the valuation is a comparison of the cost of the solar build-out, against the cost of distribution system upgrades which may be deferred or eliminated because of the solar. But at higher levels of penetration of solar into the electric power market, perhaps associated with grid modernization and microgrid development, there will be new costs for system upgrades needed in order to accommodate more solar and other DERs (distributed energy resources), and deferral-based valuation must give way to valuation based on new build-out.
Would the VOS then become obsolete?
Consider that the genesis of this approach was the desire to move past a frustrating debate about the catch-all of “externalities” which could be mitigated by solar energy. By creating an itemized list of market-oriented benefits of solar to the utility and its customers, the VOS is a rational method to price solar in an already complex electric power market. Far being discarded, the VOS could be a foundation for the even more complex challenge of valuing DERs in a more interactive and time-oriented power grid, requiring optimization between solar, energy storage, curtailment, gas peakers, and load management. Let’s celebrate what the VOS methodology given us that can be applied going forward !!
A limited growth forecast for the CSG model
Here is a recap of the issues I have with the Xcel CSG program:
– CSG market only functions in Xcel territory
– Priced too high to be a major power source
– Doesn’t address utility planning needs well
– Hasn’t effectively addressed ratepayer cross-subsidization
– VOS tariff will need update for valuation of DERs
Here are some of the suggested improvements to the program :
– Remove the contiguous county requirement under conditions minimizing cross-subsidization
– Set a yearly cap for the Xcel CSG program
– Raise the Garden collocated size to at least 2 megawatts
– Firm up incentives for more residential subscriptions
We have a strong Community Solar Garden program right now, viewed by many as the best in the country. Although Xcel chafes under some aspects of the program, and the solar developers chafe about others, the process has brought us all into a better understanding. We will need that going forward. Rather than watch the program fizzle out over the next couple of years, a better strategy would be to make all of the improvements to the program that we can, including agreement on the ultimate scope, and keep the industry healthy by letting the program make a strong finish at 1,500 megawatts of Gardens by 2030. That’s about 10% of the solar we will need by 2050, as mentioned back in Part 1 of this article. And then let’s get to work on the DG solar models for the other 20% to 50% of the solar that we will need.
– Ralph Jacobson, May 2020
Next: Public Benefits and Distributed Solar
The 4th market bucket of Dispersed Solar (Part 2)
Author: Ralph Jacobson
What Do We Mean By The 4th Market Bucket?
Let’s look at this through the lens of tariffs offered by the utility for distinct segments of the solar market, affectionately called “buckets.” A tariff is a standard contract, approved by the utility’s regulators, which defines the transaction between the utility and its customers who own solar. The net-metering tariff is offered to residential, commercial, and industrial customers for PV systems up to 1,000 kilowatts. This first bucket for solar has been the foundation for the solar industry for decades.
The second bucket is the community solar garden, which uses a tariff based on the “value of solar” concept to price the bill credit given to subscribers. Utility-scale solar, a third bucket, is just entering the market in Minnesota as the price of solar continues to come down. Being larger and relatively few in number, these transactions involve power purchase agreements (PPAs) and other purchase contracts where price and longevity are the key drivers.
Creating The 4th Market Bucket: Dispersed Solar
Dispersed solar arrays, DG for short and sized from one to ten megawatts, may be too large to be supported by policy-driven incentives, and too small to be competitive by a wholly economics-driven analysis. But recognizing that DG solar can utilize smaller parcels of land closer to loads, be quicker to deploy, AND be more compatible with utility business models, DG solar models will actually gain more traction in the solar marketplace than the CSG model.
To facilitate DG solar, we would do well to identify what need there is in the clean power market for solar arrays at mid-scale, how this market differs from what we already know, and what is needed to make it work for both utilities and solar developers. This will be a planning-driven market, and this should be seen as the goal of the distribution planning process initiated recently under the auspice of the Minnesota Public Utility Commission.
Why Consider Dispersed Solar?
A recent article, “Is Bigger Best in Renewable Energy,” by Maria McCoy of the Institute for Local Self-Reliance, makes the case that there are limits to the economics of ever-bigger power plants. Very large solar arrays will likely require investment in new transmission lines, adding significant cost and longer timelines to utility-scale arrays. Other factors such as the cost of other infrastructure, powerline losses over longer distances, uncertainty in the market, and public attitudes about the use of agricultural land will take a great deal of political capital to overcome. In comparison, DG solar can be quicker and easier to plan and implement, as will be discussed further along.
Another advantage of DG solar is that more widespread dispersal of solar arrays will tend to minimize the edge effects of clouds. The leading edge of a cloud bank can cause a sharp drop in power production, while a sharp increase in production can occur as the sun comes out from behind the trailing cloud edge. While electronics can minimize the edge effects of clouds by smoothing the ramping up or down of production, the fact remains that the more compact our solar is (i.e., fewer but larger arrays), there will be more impact from edge effects to be dealt with.
How Will Dispersed Solar Fit Into The Power Grid?
Utility-scale solar arrays are located on the transmission side of the power grid, more like central-station power plants. Dispersed solar arrays can be located on the distribution-side, much nearer to the farms, factories, and cities where the energy will be used. It may be more accurate to describe them by function or location in the electric system, such as feeder line support, than it is to describe by other categories.
A legitimate question to ask is, if community solar gardens are really taking off and very popular with electric customers of Xcel Energy, why can’t the model just be scaled up to take its place alongside utility-scale solar to realize the full potential for clean power? And furthermore, since it costs a little more per kilowatt-hour to build a dispersed solar array than it does to build a utility-scale solar array, what are the benefits which justify the extra cost and work of creating this 4th bucket for DG? So, let’s examine the market potential for community solar.
– Ralph Jacobson, March 2020
Next Time: How Much Can The CSG Model Be Scaled Up?
Join us at Amsterdam Hall & Bar to celebrate the 50th anniversary of Earth Day!
It’s the 50th anniversary of Earth Day and we’re celebrating!
After an advocacy-filled day at the State Capitol, we’re making the short trip over to Amsterdam Hall and Bar to celebrate 50 years of solar progress.
– This is a free event
– All ages are welcome!
– Appetizers will be provided
For more info on other Earth Day activities: https://mnearthday.org/
Amsterdam Hall is a quick Green Line trip from the Capitol. IPS will provide light rail passes for all attendees.
How We Can Steer The Market For DG Solar (Part 1)
Author: Ralph Jacobson
Moving Beyond the Net-Metering Framework
Don’t get me wrong: the lasting value of the net-metering policy is that it has supported the early decades of the solar power market, creating ample opportunities to work the technology and to continually improve it. Under a tacit agreement with the utilities which has lasted for forty years, most of the power produced by a solar array is used onsite, so it has little impact on the utility distribution system. When a net-metered PV system goes online, it looks very much like a daytime demand-side management measure has just been applied:
The net-metering framework has served us well to gradually de-risk PV technology at the grid edges, so that now utilities and other risk-averse players have the confidence to invest in it themselves. Net-metering has focused the market on the small-scale end, where strong incentives are needed to stimulate a sufficient volume of installations to make the market strong enough to develop reliable products and services. It has enabled the gradual scale-up of mass-produced PV modules, specialized mounting hardware, improved electronics, and national standards for interconnection of PV systems of all sizes to the electric power system.
These in turn have led to a dramatic decrease in the cost of PV equipment, and to a growing workforce that is trained to develop and install solar. So then, as the solar industry rides a wave of success, it is natural to assume that if we want a lot more of our electricity to come from solar, we should pursue the net-metering framework of the past 30 years more vigorously, right?
Well of course we will, but industry players know that small-scale solar by itself will get us nowhere near the amount that we must install to meet our clean energy goals. According to the Solar Potential Analysis report for Minnesota, released in November 2018 by Clean Power Research, roof-mounted residential and commercial systems could provide as much as 40% or as little as 10% of the total contribution which solar could make by 2050.
The contribution from utility-scale solar is heavily dependent on economic factors discussed later but note here that the expected range mirrors that of small-scale solar: more of one, less of the other.
Comparing the two scenarios, this leaves anywhere from 30% to 60% of the
market for the larger but less than utility-scale solar; in the analysis community solar appears as a placeholder with no consideration of other larger-scale solar. This is what is up for grabs in the discussion of the terms of a DG tariff– it represents a huge opportunity to shape the solar market that works best for everyone, including business development, modernizing the grid, and social equity, as well as meeting greenhouse gas reduction goals.
The Next Market for Solar in Minnesota
The solar industry here has always operated with a bit of a subversive mindset, of trying to get our foot in the door of the electric power system and get a little piece of the action. But that dynamic will be turned on its head, as our disruptive solar technology becomes a major part of the system! We must now grow our thinking, by understanding a few things about larger-scale solar, so that we can steer the market growth in the directions we would most like to see. This will help stakeholders participate more effectively in distribution planning.
– Ralph Jacobson, January 2020
Next Time: The 4th Market Bucket of Distributed Solar
We are counting down the top ten solar trends that you need to be aware of going into 2020! On day one, we are taking a look at bifacial solar panels.
Despite the technology existing for around a decade, bifacial panels have just recently begun to saturate the market. Increased performance and lower prices are making these panels a top choice for many projects heading into 2020.