Minnesota Legislature Passes Bipartisan Energy Bill, preserving Community Solar Gardens and Net Metering

Strategic Insights -

A bipartisan energy bill has been passed by the Minnesota Legislature, preserving the state's community solar gardens program and net metering, measures that were initially threatened by a proposed sunset of the program and reduced payments to rural and small-town solar customers. The bill, which was signed into law during a special session, has been hailed as a victory for the solar industry, which says that the program and net metering are crucial for the development of clean energy sources in the state.

Key Takeaways:

  • The Minnesota Legislature passed a bipartisan energy bill that preserves the state's community solar gardens program and net metering, measures that were initially threatened by a proposed sunset of the program and reduced payments to rural and small-town solar customers.
  • The bill, which was signed into law during a special session, has been hailed as a victory for the solar industry, which says that the program and net metering are crucial for the development of clean energy sources in the state.
  • The community solar program has grown dramatically since its launch in 2014, with Xcel Energy paying subscribers hundreds of millions of dollars in credits annually.
  • Without the proposed changes, the average residential Xcel customer would have paid $7 per month in 2024 to support community solar subscribers, according to the Star Tribune.
  • The bill also shifts responsibility for the program from Xcel to the Minnesota Department of Commerce, sets declining annual caps on new statewide community solar capacity, and establishes carveouts for low- and moderate-income subscribers.
  • Solar proponents say that the cost shift for net metering is a "myth," and that community solar will deliver nearly $3 billion in net benefits over 30 years, according to a 2024 Minnesota Department of Commerce study.
  • The bill's passage was a hard-fought compromise between the solar industry and Minnesota utilities, ratepayer advocates and other groups.
  • Reducing net metering payments would lengthen the payback period for people who install solar on their properties, making those investments less appealing.
  • The bill's author, Sen. Nick Frentz, said that the changes were necessary to level the playing field for all clean electricity sources in all parts of the state.
  • The bill also addresses the concerns of rural electric cooperatives and municipal utilities, which had opposed the 2023 carbon-free power law.

Statistics:

  • The community solar program has grown dramatically since its launch in 2014, with Xcel Energy paying subscribers hundreds of millions of dollars in credits annually.
  • Without the proposed changes, the average residential Xcel customer would have paid $7 per month in 2024 to support community solar subscribers.
  • Community solar will deliver nearly $3 billion in net benefits over 30 years, according to a 2024 Minnesota Department of Commerce study.
  • The bill shifts responsibility for the program from Xcel to the Minnesota Department of Commerce, sets declining annual caps on new statewide community solar capacity, and establishes carveouts for low- and moderate-income subscribers.

Sources:

  • "MN Senate energy bill could dial back landmark climate wins" by the Minnesota Reformer, April 23, 2025
  • "2023 Minnesota Statutes, Chapter 5473" by the Minnesota State Legislature
  • "Net Metering Study, 2024" by the Minnesota Department of Commerce
  • "Solarizing MN: Community Solar 2023 Report" by the Minnesota Department of Commerce
  • "Trump Republicans Tax Bill Reconciliation Medicaid" by NPR, May 21, 2025
  • "Minnesota Can Meet Data Center Energy Demands And 2040 Carbon-Free Mandate" by the Minnesota Reformer, June 6, 2025