By Tom Steward | Watchdog Minnesota
ST. PAUL, Minn. — There’s a new state lottery kicking off on Jan. 1 that might just offer better odds of a payoff than the scratch cards, Gopher 5 and Daily 3 games already out there.
The “Made in Minnesota Solar Incentive” lottery comes with a $150 million jackpot — $15 million a year for 10 years ponied up by utility ratepayers.
Instead of buying a ticket at a gas station or convenience store, however, players enter online at the Minnesota Department of Commerce website by the end of February. To be eligible, entrants must install photovoltaic panels made by companies that manufacture solar panels using more than 50 percent Minnesota materials and labor.
“The Legislature’s intent with the Made in Minnesota Program is to create incentives for solar manufacturing in Minnesota and to attract new solar companies, solar equipment suppliers, installers and other associated jobs,” said Anne O’Connor, communication director for the Minnesota Department of Commerce.
The lucky winners will be chosen at random by the commerce department for the incentive program designed to offset the cost of installing up to 40 kilowatt solar systems at homes or small businesses. It’s meant to jump start solar production to meet a new mandate requiring 1.5 percent of Minnesota’s electricity to be solar generated by 2020.
“We know that the potential for solar manufacturing in Minnesota is really good and we want as much home-grown energy as we possibly can get,” said John Kearney, executive director of the Minnesota Solar Energy Industries Association.
Before the solar sweepstakes has even gone online, some skeptics question whether Made in Minnesota version two will be any more effective than a previous version passed by legislators.
Solar Boom? Supporters say Made in MN Solar Incentives lottery will jump start the fledgling industry and meet new state solar mandate. City of Edina photo.
“This program was sold back in 2010 as having the potential to produce a bonanza of green and it hasn’t,” said Bill Glahn, Minnesota’s former director of energy security under the Pawlenty administration. “They had this idea that because it’s renewable power that somehow people would look beyond the profit motive because we’re saving the planet. No, even Solyndra is looking to make a buck and they’re going to go wherever the subsidies are the highest or the market opportunities are the best.”
Participants will receive credit on their utility bills in addition to an “incentive” check for the solar power generated on their rooftops. The check will be based on a per kilowatt hour rate that tops out at twice the retail price of electricity for residential, nonprofit and governmental customers that install some modules.
“The solar panel will thus reduce the energy that must be purchased by that customer from Xcel Energy,” said Rick Evans, Xcel Energy’s director of regional government affairs. “So in effect, the customer will receive a credit at the retail energy rate for the energy from the solar panel. The incentive payment will be made in addition to this credit.”
While utilities currently charge residential customers about 12 or 13 cents per kilowatt hour for electric power, the Made in Minnesota program will pay qualifying solar producers between 13 and 27 cents per kilowatt hour. The differential becomes even greater when compared to the current wholesale market price paid by utilities of 4 or 5 cents per kilowatt hour.
“Right now, I’m paying about 11, 12 or 13 cents a kilowatt hour. So why does it need to be 27?” Kearney asked. “It’s just an incentive, a way to increase sales and increase market. Incentives are temporary market boosters that are meant to be phased out as the market matures and that’s the way it works.”
State officials declined to release projections of how many residential and business customers are expected to enter the solar incentive lottery or estimates of how much participants could pocket on average. The $15 million in annual payments will be split with half going to residential systems and half going to commercial, nonprofit and government solar setups.
So far just two Minnesota companies manufacture PV panels that qualify for the incentive program: tenKsolar in Bloomington and Silicon Energy Cascade in Mountain Iron. Yet interest appears to be picking up due to the state’s generous subsidies.
“The department has received several inquiries from companies considering locating their businesses in Minnesota because of the new legislation,” O’Connor said.
Contact Tom Steward at tsteward@watchdog.org.
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