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Value of Solar Tariff

Investor-Owned Utility
Local Government
State Government
Savings Category 
Solar Photovoltaics
Program Info
Sector Name 
Program Type 

 Note: This program is only available to customers of one of the state's investor-owned utilities (Alliant, Minnesota Power, Otter Tail Power Company, Xcel Energy) in the Community Solar Gardens Program. Customers of a municipal utility or rural electric cooperative are ineligible for this program. No utility has yet adopted the Value of Solar Tariff rate, and are charging customers at the applicable retail rate.

As required by H.F. 729, the Minnesota Department of Commerce (DOC) developed a distributed solar value methodology and submitted it to the Public Utilities Commission (PUC) for approval on January 31, 2014. The DOC must consult with stakeholders in order to develop the methodology, which must take into account: the value of energy and its delivery; generation capacity; transmission capacity; transmission and distribution line losses; and environmental value. The DOC may also consider: the cost or benefit of solar operation to the utility; credit for locally manufactured or assembled energy systems; and systems installed at high-value locations on the grid.

Once the tariff methodology is approved by the PUC, affected utilities may offer either the Value of Solar Tariff (VOST) or Net Metering.* The utility must apply for PUC approval, and the PUC may only approve the tariff if it:

    Appropriately applies the DOC methodology;
    Includes a mechanism to allow recovery of the cost to serve customers receiving the alternative tariff rate;
    Charges the customer for all electricity consumed by the customer at the applicable rate schedule;
    Credits the customer for all electricity generated by the solar photovoltaic device at the VOST rate;
    Applies all charges and credits to a monthly bill, and excess credits carry forward and expire on the last day of February each year;
    Complies with net metering size limitations;
    Complies with interconnection requirements;
    Complies with standby charge requirements.

The tariff rate cannot be less than the retail rate used for net metering until three years after the PUC approves the utility tariff. A utility must enter into a contract with an owner of a photovoltaic system for a term of at least 20 years. The owner will be compensated at the same rate per kilowatt-hour for the duration of the contract.

* A utility that offers a Community Solar Garden program (see Minnesota's Net Metering law) must compensate systems at the VOST rate if a VOST rate is approved for that utility.