HF 1167

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2013 02:00pm

A bill for an act
relating to energy; allocating certain funds from the renewable development
account; creating an account; providing for financial incentives for solar
photovoltaic modules manufactured in Minnesota; requiring studies;
appropriating money; amending Minnesota Statutes 2012, section 116C.779,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 216C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 116C.779, subdivision 2, is amended to
read:

Subd. 2.

Renewable energy production incentive.

(a) Until January 1, 2021,
$10,900,000 annually must be allocated from available funds in the account to fund
renewable energy production incentives. $9,400,000 of this annual amount is for
incentives for electricity generated by wind energy conversion systems that are eligible for
the incentives under section 216C.41 or Laws 2005, chapter 40.

(b) The balance of this amount, up to $1,500,000 annually, may be used for
production incentives for on-farm biogas recovery facilities and hydroelectric facilities
that are eligible for the incentive under section 216C.41 or for production incentives for
other renewables, to be provided in the same manner as under section 216C.41.

(c) Any portion of the $10,900,000 not expended in any calendar year for the
incentive is deleted text begin available for other spending purposes under subdivision 1 deleted text end new text begin transferred to
the commissioner for deposit in the "Made in Minnesota" solar energy production
incentive account established under section 216C.412 new text end . This subdivision does not create an
obligation to contribute funds to the account.

(d) The Department of Commerce shall determine eligibility of projects under
section 216C.41 for the purposes of this subdivision. At least quarterly, the Department of
Commerce shall notify the public utility of the name and address of each eligible project
owner and the amount due to each project under section 216C.41. The public utility shall
make payments within 15 working days after receipt of notification of payments due.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [216C.411] DEFINITIONS.
new text end

new text begin For the purposes of sections 216C.411 to 216C.414, the following terms have the
meanings given.
new text end

new text begin (a) "Made in Minnesota" means the manufacture in this state of solar photovoltaic
modules:
new text end

new text begin (1) at a manufacturing facility located in Minnesota that is registered and authorized
to manufacture and apply the UL 1703 certification mark to solar photovoltaic modules by
Underwriters Laboratory (UL), CSA International, Intertek, or an equivalent UL-approved
independent certification agency;
new text end

new text begin (2) that bear UL 1703 certification marks from UL, CSA International, Intertek, or
an equivalent UL-approved independent certification agency, which must be physically
applied to the modules at a manufacturing facility described in clause (1); and
new text end

new text begin (3) that are manufactured in Minnesota:
new text end

new text begin (i) via manufacturing processes that must include tabbing, stringing, and lamination;
or
new text end

new text begin (ii) by interconnecting low-voltage direct current photovoltaic elements that produce
the final useful photovoltaic output of the modules.
new text end

new text begin A solar photovoltaic module that is manufactured by attaching microinverters, direct
current optimizers, or other power electronics to a laminate or solar photovoltaic
module that has received UL 1703 certification marks outside Minnesota from UL, CSA
International, Intertek, or an equivalent UL-approved independent certification agency is
not "Made in Minnesota" under this paragraph.
new text end

new text begin (b) "Solar photovoltaic module" has the meaning given in section 116C.7791,
subdivision 1, paragraph (e).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [216C.412] "MADE IN MINNESOTA" SOLAR ENERGY PRODUCTION
INCENTIVE ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account established; account management. new text end

new text begin A "Made in
Minnesota" solar energy production incentive account is established as a separate account
in the special revenue fund in the state treasury. The commissioner of management
and budget shall credit to the account the amounts authorized under this section and
appropriations and transfers to the account. Earnings, such as interest, dividends, and
any other earnings arising from account assets, must be credited to the account. Funds
remaining in the account at the end of a fiscal year do not cancel to the general fund but
remain in the account. The commissioner shall manage the account.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The purpose of the account is to pay the "Made in Minnesota"
solar renewable energy production incentive to owners of solar photovoltaic modules that
have received a "Made in Minnesota" certificate from the commissioner under section
216C.413.
new text end

new text begin Subd. 3. new text end

new text begin Allocations; deposit. new text end

new text begin (a) Beginning January 1, 2014, and each January 1
thereafter through 2024, each public utility, rural electric association, and municipality
subject to section 216B.241 must annually transfer to the commissioner five percent of the
total amount spent by the utility the previous year on energy conservation improvements
under section 216B.241 for the purposes of this section. The commissioner shall, upon
receipt of the funds, deposit them in the account established in subdivision 1.
new text end

new text begin (b) Notwithstanding section 116C.779, subdivision 1, paragraph (g), beginning
January 1, 2014, and continuing each January 1 until 2024, the utility that manages
the account under section 116C.779 must annually transfer from that account to the
commissioner an amount that, when added to the amount transferred to the commissioner
under paragraph (a), totals $20,000,000 for the purposes of this section. The commissioner
shall, upon receipt of the funds, deposit them in the account established in subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

new text begin [216C.413] "MADE IN MINNESOTA" SOLAR ENERGY PRODUCTION
INCENTIVE; QUALIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin A manufacturer of solar photovoltaic modules seeking
to qualify those modules as eligible to receive the "Made in Minnesota" solar energy
production incentive must submit an application to the commissioner on a form prescribed
by the commissioner. The application must contain:
new text end

new text begin (1) a technical description of the solar photovoltaic module and the processes used
to manufacture it, excluding proprietary details;
new text end

new text begin (2) documentation that the solar photovoltaic module meets all the required
applicable parts of the "Made in Minnesota" definition in section 216C.411, including
evidence of the UL 1703 right to mark for all solar photovoltaic modules seeking to
qualify as "Made in Minnesota";
new text end

new text begin (3) documentation, including, but not limited to, purchase orders, invoices, and
shipping documents, establishing:
new text end

new text begin (i) the origin of components used to manufacture the solar photovoltaic modules;
new text end

new text begin (ii) the costs of raw materials, direct manufacturing labor in Minnesota, and
overhead to manufacture the solar photovoltaic module; and
new text end

new text begin (iii) the total costs of manufacturing the solar photovoltaic module, expressed in
dollars per watts-peak governed by Standard Test Conditions under UL 1703;
new text end

new text begin (4) any additional information requested by the commissioner of commerce; and
new text end

new text begin (5) certification signed by the chief executive officer of the manufacturing company
attesting to the truthfulness of the contents of the application and supporting materials
under penalty of perjury.
new text end

new text begin Subd. 2. new text end

new text begin Plant inspection. new text end

new text begin After reviewing the application materials submitted
under subdivision 1, the commissioner, or the commissioner's designee, shall physically
inspect the manufacturer's Minnesota plant to verify that the manufacturing processes
meet the requirements of subdivision 1. The Department of Commerce shall contract with
an independent technical advisor with expertise in the manufacture of solar photovoltaic
modules to accompany the commissioner, or the commissioner's designee, on the
inspection. The Department of Commerce may assess a fee on the manufacturer that is
equal to the costs billed by the contractor for the contractor's services with respect to the
inspection, including review of the application and the writing of a postinspection report.
new text end

new text begin Subd. 3. new text end

new text begin Certification. new text end

new text begin If the commissioner determines that a manufacturer's solar
photovoltaic module meets the definition of "Made in Minnesota" in section 216C.411, the
commissioner shall issue the manufacturer a "Made in Minnesota" certificate containing
the name and model numbers of the certified solar photovoltaic modules and the date of
certification. A copy of the certificate must be provided to each purchaser of the solar
photovoltaic module.
new text end

new text begin Subd. 4. new text end

new text begin Reinspection. new text end

new text begin The commissioner may reinspect the manufacturing facility
of a manufacturer who has received certification under subdivision 3 at any time, but
must do so at least every two years.
new text end

new text begin Subd. 5. new text end

new text begin Notice of change; certification review. new text end

new text begin A manufacturer that has received
a "Made in Minnesota" certificate under subdivision 3 must notify the commissioner
of commerce at least 60 days in advance of any changes in the components used
in production, manufacturing processes, or any other changes that could affect the
manufacturer's solar photovoltaic modules' certification as "Made in Minnesota," and
must submit to the commissioner detailed information describing and documenting the
changes. The commissioner shall, after reviewing the submitted material and, if necessary,
conducting a reinspection of the manufacturer's manufacturing facility, determine
whether the proposed changes warrant revoking the manufacturer's "Made in Minnesota"
certification. Within ten days of making a determination under this subdivision, the
commissioner shall inform the manufacturer of the determination in writing.
new text end

new text begin Subd. 6. new text end

new text begin Data. new text end

new text begin Any data submitted as part of an application under subdivision 1 or
collected as a result of an inspection under subdivision 2 or 4 is trade secret information
under section 13.37 and is classified as nonpublic data.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

new text begin [216C.414] "MADE IN MINNESOTA" SOLAR ENERGY PRODUCTION
INCENTIVE; CALCULATION.
new text end

new text begin Subdivision 1. new text end

new text begin Components. new text end

new text begin (a) By October 1, 2013, the Department of Commerce
shall calculate a "Made in Minnesota" solar energy production incentive for each solar
photovoltaic module that has received certification under section 216C.413 as being
manufactured in Minnesota. The "Made in Minnesota" solar energy production incentive
is a performance-based financial incentive expressed as a per kilowatt-hour amount that,
when added to the amount paid by a utility to the owner of a solar photovoltaic module
under section 216B.164 or other rate approved by the commission, reduces the payback of
the owner's investment in the solar photovoltaic modules to a period of ten years. The
Department of Commerce shall calculate the "Made in Minnesota" solar energy production
incentive by utilizing a financial model composed of the following components:
new text end

new text begin (1) an estimate of the installed cost per kilowatt-direct current, based on the cost data
supplied by manufacturers in the application submitted under section 216C.413, and an
estimate of the average installation cost based on a representative sample of Minnesota
solar photovoltaic projects installed by installers certified by the North American Board of
Certified Energy Practitioners and the Minnesota Joint Apprenticeship Training Committee;
new text end

new text begin (2) the average insolation rate in Minnesota;
new text end

new text begin (3) an estimate of the decline in the generation efficiency of the solar photovoltaic
modules over time;
new text end

new text begin (4) the rate paid by utilities to owners of solar photovoltaic modules under section
216B.164 or other law;
new text end

new text begin (5) applicable federal tax incentives for installing solar photovoltaic modules;
new text end

new text begin (6) the maximum amount of debt the project can support based on current
commercial borrowing rates and a ten-year term; and
new text end

new text begin (7) the estimated levelized cost per kilowatt-hour generated.
new text end

new text begin (b) In determining the amount of the incentive, the Department of Commerce shall
consider, after consulting with Minnesota solar photovoltaic manufacturers, the degree to
which solar photovoltaic modules contain components manufactured in Minnesota; the
solar photovoltaic modules' estimated length of life, taking into account design, quality of
materials used, and independent testing results; UL 1703 or equivalent fire safety ratings
and additional integrated safety features; and the ability to use the solar photovoltaic
modules in innovative applications, including for purposes other than solely electric
generation.
new text end

new text begin (c) "Made in Minnesota" solar photovoltaic modules shall receive:
new text end

new text begin (1) 100 percent of the incentive calculated in paragraph (a) if they are manufactured
under the process described in section 216C.411, paragraph (a), clause (3), item (i); or
new text end

new text begin (2) 65 percent of the incentive calculated in paragraph (a) if they are manufactured
under the process described in section 216C.411, paragraph (a), clause (3), item (ii).
new text end

new text begin Subd. 2. new text end

new text begin Notice; recalculation. new text end

new text begin A manufacturer that has received a "Made in
Minnesota" certificate under section 216C.413 must notify the commissioner of commerce
at least 60 days in advance of any changes in the parameters listed in subdivision 1
that may affect the department's calculation of the "Made in Minnesota" solar energy
production incentive, and must submit to the commissioner detailed information
describing and documenting the changes. The commissioner of commerce, after reviewing
the submitted material, shall determine whether the changes warrant recalculation of
the "Made in Minnesota" solar energy production incentive for the manufacturer's
solar photovoltaic modules and, if so, shall conduct the recalculation. Within ten days
of recalculating the incentive, the commissioner shall inform the manufacturer of the
recalculation in writing. A recalculated incentive is effective 90 days after the first day of
the first month following the date of notice of the recalculation.
new text end

new text begin Subd. 3. new text end

new text begin Annual review. new text end

new text begin Unless a review of the calculation of the "Made in
Minnesota" solar energy production incentive has been conducted under subdivision 2
in a calendar year, the commissioner of commerce shall annually review the calculation
of the "Made in Minnesota" solar energy production incentive for each manufacturer
receiving the incentive. As part of the review, the commissioner of commerce may
require the manufacturer to submit current information to support the calculation of the
"Made in Minnesota" solar energy production incentive. A manufacturer shall submit the
information requested by the commissioner of commerce in a timely fashion.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

new text begin [216C.415] "MADE IN MINNESOTA" SOLAR ENERGY PRODUCTION
INCENTIVE; PAYMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Incentive payment. new text end

new text begin Incentive payments may be made under this
section only to an owner of solar photovoltaic modules with a total nameplate capacity
below 100 kilowatts who:
new text end

new text begin (1) has submitted to the commissioner, on a form established by the commissioner,
an application to receive the incentive;
new text end

new text begin (2) has received from the commissioner a "Made in Minnesota" certificate under
section 216C.413; and
new text end

new text begin (3) has installed on or adjacent to residential or commercial property solar
photovoltaic modules that are generating electricity and has received a "Made in
Minnesota" certificate under section 216C.413.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility window; payment duration. new text end

new text begin (a) Payments may be made
under this section only for electricity generated from solar photovoltaic modules that are
operational and generating electricity from January 1, 2014, through December 31, 2034.
new text end

new text begin (b) Payment of the incentive begins and runs consecutively from the date the solar
photovoltaic modules begin generating electricity.
new text end

new text begin (c) An owner of solar photovoltaic modules shall receive payments under this
section for a period of ten years.
new text end

new text begin (d) No payment may be made under this section for electricity generated after
December 31, 2034.
new text end

new text begin (e) No owner of solar photovoltaic modules may first begin to receive payments
under this section after December 31, 2024.
new text end

new text begin Subd. 3. new text end

new text begin Amount of payment. new text end

new text begin (a) An incentive payment is based on the number
of kilowatt-hours of electricity generated by the solar photovoltaic modules installed at
a single property, except as provided in paragraph (b). The per-kilowatt amount of the
payment is the "Made in Minnesota" solar energy production incentive for those modules
determined by the commissioner of commerce under section 216C.414.
new text end

new text begin (b) The owner of solar photovoltaic modules eligible to receive incentives under this
section and whose total nameplate capacity exceeds 40 kilowatts DC but is less than 100
kilowatts DC shall be paid an incentive according to the formula:
new text end

new text begin I = (M) x [(P kWh AC) ÷ (C kW DC)] x (40 kW DC), where:
new text end

new text begin (1) I equals the incentive paid to an owner of solar photovoltaic modules whose
nameplate capacity exceeds 40 kilowatts DC, but is less than 100 kilowatts DC;
new text end

new text begin (2) M equals the "Made in Minnesota" solar energy production incentive calculated
under section 216C.414;
new text end

new text begin (3) P equals the number of kilowatt-hours AC generated by the solar photovoltaic
modules whose nameplate capacity exceeds 40 kilowatts DC, but is less than 100
kilowatts DC; and
new text end

new text begin (4) C equals the nameplate capacity of the solar photovoltaic modules whose
nameplate capacity exceeds 40 kilowatts DC, but is less than 100 kilowatts DC.
new text end

new text begin (c) For purposes of this subdivision, (i) "AC" means alternating current; (ii) "DC"
means direct current; (iii) "kWh" means kilowatt-hours; and (iv) "kW" means kilowatts.
new text end

new text begin Subd. 4. new text end

new text begin Allocation of payments. new text end

new text begin (a) Fifty percent of the funds deposited in the
account established in section 216C.412 available each year to pay incentives shall be for
owners of eligible solar photovoltaic modules installed on residential property, and 50
percent shall be for owners of eligible solar photovoltaic modules installed on commercial
property.
new text end

new text begin (b) The commissioner may not award more than 25 percent of the annual
contribution made by the public utility that owns a nuclear generating plant in this state
to the account established in section 216C.412 to owners of solar photovoltaic modules
that are installed in buildings located outside the area where that public utility provides
electric service in this state.
new text end

new text begin (c) The commissioner shall endeavor to geographically distribute incentives paid
under this section to owners of solar photovoltaic modules installed throughout the state.
new text end

new text begin (d) For purposes of this subdivision:
new text end

new text begin (1) "residential property" means residential real estate that is occupied and used as a
homestead by its owner or by a renter and includes "multifamily housing development" as
defined in section 462C.02, subdivision 5, except that residential property on which solar
photovoltaic modules (i) whose capacity exceed 10 kilowatts is installed; or (ii) connected
to a utility's distribution system and whose electricity is purchased by several residents,
each of whom own a share of the electricity generated, shall be deemed commercial
property; and
new text end

new text begin (2) "commercial property" means real property on which is located a business
establishment classified under the North American Industrial Classification System as
codes 42, 44, or 45.
new text end

new text begin Subd. 5. new text end

new text begin Limitation. new text end

new text begin An owner receiving an incentive payment under this section
may not receive a rebate under section 116C.7791 for the same solar photovoltaic modules.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin There is annually appropriated from the "Made in
Minnesota" solar energy production incentive account established under section 216C.412
an amount to the commissioner of commerce sufficient to make the payments required
under this section and to reimburse the Department of Commerce for actual and reasonable
costs of administering the incentive program under sections 216C.411 to 216C.415.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7. new text begin VALUE OF ON-SITE ENERGY STORAGE STUDY.
new text end

new text begin (a) The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
costs and benefits of installing utility-managed energy storage modules in residential and
commercial buildings in this state. The study must:
new text end

new text begin (1) estimate the potential value of on-site energy storage modules as a
load-management tool to reduce costs for individual customers and for the utility,
including, but not limited to, reductions in energy, particularly peaking, costs, and
capacity costs;
new text end

new text begin (2) examine the interaction of energy storage modules with on-site solar photovoltaic
modules; and
new text end

new text begin (3) analyze existing barriers to the installation of on-site energy storage modules
by utilities, and examine strategies and design potential economic incentives, including
using utility funds expended under Minnesota Statutes, section 216B.241, to overcome
those barriers.
new text end

new text begin By January 1, 2014, the commissioner of commerce shall submit the study to the chairs
and ranking minority members of the legislative committees with jurisdiction over energy
policy and finance.
new text end

new text begin (b) The commissioner of commerce shall assess an amount necessary under
Minnesota Statutes, section 216B.241, subdivision 1e, for the purpose of completing the
study described in this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8. new text begin VALUE OF SOLAR THERMAL STUDY.
new text end

new text begin (a) The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
costs and benefits of expanding the installation of solar thermal projects, as defined in
Minnesota Statutes, section 216B.2411, subdivision 2, in residential and commercial
buildings in this state. The study must examine the potential for solar thermal projects to
reduce heating and cooling costs for individual customers and to reduce utilities' costs.
The study must also analyze existing barriers to the installation of solar thermal projects
by utilities, and examine strategies and design potential economic incentives, including
using utility funds expended under Minnesota Statutes, section 216B.241, to overcome
those barriers. By January 1, 2014, the commissioner of commerce shall submit the study
to the chairs and ranking minority members of the legislative committees with jurisdiction
over energy policy and finance.
new text end

new text begin (b) The commissioner of commerce shall assess an amount necessary under
Minnesota Statutes, section 216B.241, subdivision 1e, for the purpose of completing the
study described in this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end