On Wednesday, the Minnesota Public Utilities Commission voted to become the first state in the nation to come up with a methodology for calculating the value of solar power generated by consumers — and not just how much that power is worth to the utility company and its customers, but to society and the environment as a whole.
As solar energy in particular skyrockets in the U.S., placing a dollar value on that power has been challenging and is often ignored, which makes Minnesota’s effort an even bigger step. “Minnesota has really set itself apart by determining a methodology to calculate the true value of solar to the electricity grid — a value that should include the full range of benefits as well as the costs,” said Mari Hernandez, energy research associate at the Center for American Progress. “This decision could influence other states as they evaluate how to move forward with their own solar-related policies.”
Why do we need to find the ‘value of solar?’
When customers install a solar system on their homes, it doesn’t just provide them with a good feeling that they’re boosting clean energy and cutting back on the electricity they get from fossil fuels. It also provides a clear value to utility companies. Solar generates during peak hours, when a utility has to provide electricity to more people than at other times during the day and energy costs are at their highest. Solar panels actually feed excess energy back to the grid, helping to alleviate the pressure during peak demand. In addition, because less electricity is being transmitted to customers through transmission lines, it saves utilities on the wear and tear to the lines and cost of replacing them with new ones.