What Goes Into Calculating Minnesota’s Groundbreaking ‘Value of Solar’ Rate?

In 2017, Minnesota became the first state to apply a “value of solar” rate to community solar projects. Xcel Energy pays operators using a formula meant to better reflect solar’s costs and benefits to the grid than other rates.

The rate is recalculated annually by the utility and submitted to state regulators for approval. After debuting near 13 cents per kilowatt-hour in 2017, the levelized rate fell to around 11 cents for projects coming online in 2019.

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