Minnesota’s Clean Energy Future: Redefining Local Solar with Distributed Capacity Procurement
For the first time, a large electric utility, Xcel Energy, is embracing a transformative shift in how local and rooftop solar are integrated into energy supply planning. Historically, utilities have viewed distributed energy, such as local and rooftop solar, as something that simply “happens to” them – a byproduct of customer decisions that requires ongoing adjustments rather than proactive planning. But with the Distributed Capacity Procurement (DCP) proposal, Xcel is signaling a profound change: treating local and rooftop solar as core components in their energy supply toolkit.
Imagine tiny solar power plants spread across your neighborhood. That’s what Distributed Energy Resources, or DERs, are like. While it’s unclear from what Xcel has proposed thus far what they mean by DER, what we mean is small-scale units of local electricity generation, storage, or demand management located at or near the point of consumption, typically on the customer side of the meter. They include technologies like:
- solar photovoltaics (PV)
- small wind turbines,
- energy storage systems (such as batteries),
- electric vehicles (EVs) with bidirectional charging capabilities,
- combined heat and power (CHP) systems
- demand response programs that adjust consumer electricity use based on supply conditions
In many cases, DERs can be relied upon to export energy when needed to relieve grid congestion. DERs also encompass microgrids that can operate independently from the central grid by integrating multiple DER types. These resources enhance grid resilience, reduce transmission losses, improve reliability, and support sustainability by increasing the use of renewable energy sources.
Vote Solar, along with our partners in the Distributed Solar Parties (including various organizations, all represented by Earthjustice), introduced our distributed energy modeling as a resource model during Xcel’s last Integrated Resource Plan process, starting in February of 2021. Our vision was to ensure that local and rooftop solar could meet the growing energy needs of all customers, including low-wealth customers, delivering power that is affordable and reliable. We advocated for treating solar solutions as resources within utilities’ integrated resource planning. The Minnesota Public Utilities Commission heard us, and directed Xcel to do just that. The resulting proposal from Xcel is a direct result of this shift and opens the door to a reimagined energy system that decreases reliance on fossil fuels and increases local economic benefits.
The DCP proposed by Xcel on August 9 expands both the scope and the scale of what has been previously considered. This program will strategically and intentionally deploy distributed energy resources (solar + storage) where they can offer the greatest value to the energy system, turning individual on-site energy production and storage into a large-scale, powerful tool for energy system management and resilience.
Our work isn’t over. We are excited to collaborate with Xcel Energy on developing the Distributed Capacity Procurement program to achieve a clean, cost-effective, and equitable energy system. We anticipate important questions about ownership and control to arise. But we are confident that with thoughtful engagement, we can resolve potential issues that balance the interests of solar owners and the broader benefits of the Minnesota energy system.