January 24 , 2004
Effective January 1, 2004, the Minnesota Department of Commerce in cooperation with Xcel Energy (we are not part of their grid down here in the SE corner of MN) have extended the solar rebate program across the entire state.
The rebate program is funded by Xcel Energy's Renewable Development Fund, one of the requirements stemming from the 1994 Prairie Island Nuclear Power Plant legislation. For the first two years of the program, the rebate was only available to electricity customers of Xcel Energy, but now the rebate is available to any Minnesota electricity consumer providing funds still remain.
So far, only 20 percent of the funds have been used out of $1 million allotted for the program. The rebate is for $2,000 per kW of solar PV (photovoltaic) panels, up to a maximum of 4kW. This will typically reduce the cost of a system by 25 to 30 percent. Additionally, the state has also been nice enough not to charge sales tax.
After downloading the rebate packet and reading the instructions I decided it was time to contact our local electric cooperative to find out what it would take for me to connect a 4kW worth of solar power.
After a few phone calls I was put in touch with the manager of member services and marketing. I explained that I was interested in the solar rebate program and wanted to know the requirements for net-metering. By law, utilities must provide net-metering in the state of Minnesota. Net-metering is a fancy term for selling back power to the grid at the same rate that it is purchased. (Well, almost the same.)
He said that he would put a packet of information in the mail to me explaining in detail the requirements. A few days later, I had the packet in my hands.
The packet consisted of three documents: Their policy for Cogeneration and Small Power Production Facilities, a guide for interconnection requirements and parallel operation of customer-owned generation and a uniform statewide contract. (I didn't know I had to wear a uniform.)
I will spare you the details and focus in on the "gotchya's". Depending upon the size of the system, a feasibility study MAY be required at the QFs (Qualifying Facility -- that's me) expense. Secondly, two meters will be required, one to measure the power generated and the other to measure the power consumed by the QF. Thirdly, a meter reading fee of $30 per month would be assessed.
I had time over the weekend to stew about this, so I decided to call Corey Babcock. Corey, "The Wind Power Kid" is now "The Wind Power Man" and works installing and maintaining wind turbines. He was originally featured in Home Power Magazine a few years back. The reason why I was interested in talking to him was because his parent's farm where he cut his teeth on wind power happens to be tied to the same cooperative as myself.
I asked him if he was being charged $30 a month for a meter reading fee. Corey said that wasn't the case, but he was charged approximately $400 for an electronic meter. (A $400 meter was sounding cheap in comparison to $30 per month.)
I was feeling a bit better now that I had talked to Corey. On Monday I again spoke to our local cooperative about the fees, and I was rest assured that I wouldn't have to pay the $30 per month. (Phew!) Things were looking up. Then I was informed me that I could no longer be part of the Dual-Fuel program as long as the PV system was on the same electric feed. The Dual-Fuel program allows me to buy power at half the price during non-peak load periods. This really comes in handy when I am not at the house and the sun isn't available to keep things warm. Although I really don't like using electric to heat the house (environmental reasons), it is much cheaper for me to add supplemental heat to the house in this manner. (See the journal: October 4, 2002) Once we are fully moved in, the house will primarily be heated by the wood stove and passive/active solar heating.
The cooperative did state that there was a way to keep the Dual-Fuel program by adding a second service to the premises. This would cost an additional $18.70 per month for the connection and the cost of trenching in a new line and meter.
I was also told that the local cooperative might be willing to forgo these added expenses if I elected not to do net-metering. This of course would mean that any excess power that I produce would be given to the cooperative for free. The manager wasn't sure if this was technically possible so he suggested that I talk to their engineer.
I was informed by their engineer that this would work. Why was I not surprised? He said the electric meter was ratcheted so that it couldn't turn backwards. If it wasn't ratcheted, this means I would be selling the power back at the same rate that I was buying it. Speaking of which, if I elected to pay the exorbitant fees and do net metering, I would actually be selling the power back at the AVERAGE rate. The average rate is .068 based on the average cost to all of the cooperatives customers. Normally, I pay .075 per kW (unless it is off-peak, that's a bargain at .035), plus $18.70/month in connection and maintenance fees, plus $3.00/month for the off-peak meter.
Doing the Fast Math
I spent the day yesterday mulling through all of this. If I installed a 4kW solar electric system, how many kW could I generate per year and per month? How much would I consume and how much would I have in surplus? I will spare you my calculations, but here's my best guesstimate:
Annually, the solar electric system would generate 3,732 kW based on the amount of sunlight available for our area, less the inefficiencies of line loss, inverters, etc. My consumption per year including off-peak electric heating will be approximately 5,550 kW. If you look at it on an annual basis, it is clear that I will consume more than I generate.
So it's not a big deal if I forgo the net-metering, right? Not really. Since electricity is billed on a monthly basis, the calculations need to reflect that. But even that's not enough since the power being generated is not being stored. The calculations need to reflect daily usage of solar-production hours and non-solar-production hours.
As it turns out, most of the surplus solar energy will occur during the spring and fall. During the summer, I will probably be running the dehumidifier to keep the house somewhat dry while I'm working on the walls. During the winter, there's not enough sun to do a whole lot even though consumption is very low during daylight hours.
The Bottom Line
In a nutshell, here are the possible scenarios:
(1) If I were to forgo the savings of the off-peak rate service, do net-metering and continued to use electric for backup heat, my saving/additional costs would be close to a wash.
(2) If I decided to keep the off-peak service and do net-metering, it would cost me an additional $86 per year plus the cost of installing a second service from the transformer.
(3) If I decline net-metering, it would reduce my bill by $127.50/year but the cooperative would receive $125/year of free electricity. (Based on .068 per kW.)
(4) Skip the whole thing.
In closing, the policies in place today were written 20 years ago to facilitate wind generation in the area. There are no policies in effect that address the plight of the very small power producers that are only attempting to generate enough energy to break even or reduce their monthly bills.
If we are ever to get serious about renewable energy in this country, we need to stop putting in road blocks and showing the true cost of electrical generation. Our electric bills are subsidized to make it appear as if fossil and nuclear powered electric generation is economical when it's not even close. (Want to know how much coal it takes to run a 100-watt light bulb for a year?)
Okay, I'm getting off my soap box for now. Next week, we'll look at system design.