Xcel Energy: Solar*Rewards Program and MN Made PV Rebate Program

Solar*Rewards Program

All 2011 funding for the Solar*Rewards program has been exhausted as of August 19, 2011. Any applications received after this point will be assigned to the 2012 budget.



Xcel Energy's Solar*Rewards Program provides an incentive for residential and commercial customers that install grid-connected photovoltaic (PV) systems of at least 0.5 kilowatts (kW) and less than 40 kW. Systems larger than 40 kW do not qualify for the program. The incentive takes the form of an up-front rebate of $2.25 per watt DC. In exchange for the up-front incentive, the customer is required to enter into a 20-year contract with Xcel Energy that transfers ownership of all renewable energy credits (RECs) produced by the system to the utility during the life of the contract. The annual budget for this program is $4.6 million.

In order to qualify for the program, the PV system must be installed on a property or a building located in Minnesota that is owned by the applicant and that receives electric service from Xcel Energy. New construction projects are eligible for incentives, but must have an Xcel Energy electric meter on-site and an electricity account set up with the utility. In addition, customers must have performed energy audit within the last three years that meets the standards of Xcel Energy's energy audit program and may be required to implement certain measures identified in the energy audit prior to participating in the Solar*Rewards program. In lieu of an energy audit, residential customers with homes that have been Energy Star certified through the utility's Energy Star project automatically qualify. Likewise, commercial customers that have participated in one of several commercial energy efficiency programs offered by the utility also automatically qualify.

To receive the incentive, participants must submit an application and receive approval from Xcel Energy prior to installing the system. The program has a $250 application fee. If, prior to the completion of an engineering review, the application is denied or the customer elects not participate in the program, the customer's application fee will be refunded. All PV systems must use new equipment, carry a five-year warranty, and meet several other equipment and installation requirements designed to assure the safe and effective operation of the system.

Net metering is available for Xcel Energy's customers, although customers may be eligible to enroll in one of several other customer-generation options if they wish instead of net metering. Under net metering net excess generation (NEG) at the end of a monthly billing period is generally credited to the next month’s bill. If a customer's NEG balance exceeds $25.00 at the end of a billing period, the customer will be issued a check for the balance by the utility. Net metering takes place using a bi-directional meter for which the customer pays a small monthly fee. The program also requires a generation meter installed at the utility's expense to measure energy (i.e., REC production) by the solar system. Applicants can view the Solar*Rewards Customer Contract at the link above.

>Minnesota Made Bonus PV Solar Rebate Program

In addition to the current $2.25/W DC Solar Rebate Program offered by Xcel Energy, consumers can also qualify for an additional rebate with the purchase of "Minnesota Made" solar energy systems, bringing the total potential rebate to $5.00/W DC. This additional rebate is made possible with the passage of the 2010 Minnesota Statute 116C.7791: Rebates for Solar Photovoltaic Modules. If the funds for the Solar*Rewards Program have been exhausted, Minnesota Made projects will still receive $5.00/W from the Minnesota Made Bonus budget. This may affect how the funds are distributed; contact the program administrator for more details.

The “Minnesota Made” PV Solar Rebate Program was designed to encourage the development and use of PV modules receiving a specified minimum of component assembly by a Minnesota-based manufacturer. Funding for the program is designated for five years, and the calculated "Minnesota Made" rebate is paid out with five equal annual payments accordingly.

Program Qualifications

To qualify for the Minnesota Made incentive program, an applicant must:

• Be an Xcel Energy customer and have applied for and received an Xcel Energy Solar*Rewards interconnection agreement (All current Solar*Rewards program requirements apply).
• Install qualified “Minnesota Made” PV modules as defined by state statute.
• Submit a valid purchase order through the Solar*Rewards online application process for qualified “Minnesota Made” PV equipment to ensure funds are placed in reserve for the project. The fund reservation will be confirmed in a Minnesota Made Incentive Acknowledgement letter.
• Install the PV system within the funding year that the incentive reservation was assigned.
• Sign a Minnesota Made Rebate contract confirming the payment calculation assumptions prior to payment.

Calculating the "Minnesota Made" Rebate

In June 2011, the Minnesota Public Utilities Commission approved changes (Docket No. E-002/M-10-1278) to the methodology for calculating the "Minnesota Made" Rebate. There are two separate calculation methods, depending on whether or not  the applicant is using federal depreciation tax benefits in excess of the federal taxes imposed on the payments. If the applicant agrees with the statement "that it will not use, or by contract or other agreement permit another entity to use, federal depreciation tax benefits that exceed the federal tax imposed on rebates awarded under this application," then the applicant should use the Example 1 calculation. If the applicant does not agree with the statement, the federal depreciation value is deducted from the pre-tax sum of all rebates. The highest applicable income tax rate is used to add back taxes that would be applied to the payment. Applicants that do not agree to the statement should use Example 2 in the above document in order to calculate the rebate.