The Pathway to Larger-Scale Solar in MN
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