Renewable Energy-Related Legislation
and Loan programs in Minnesota
Austin Public Utility started its Solar Choice Program in Minnesota to help state people installing photovoltaic solar arrays since 1st October 2005. In order to get the incentive payment from Austin Public Utility, the solar arrays must be connected to its electrical distribution system. The incentive will be provided based on the system’s production. Systems using Renewable technologies like photovoltaic are accepted. Various sectors are eligible to apply including industrial, commercial, agricultural, residential, institutional etc. every person making a purchase of solar utility will be contributing to the solar utility producer and thus the total amount contributed to each utility will be calculated. Depending on the amount earned by its purchases each producer will be given an incentive up to $1 per kWh. This program is not available for the people who want to back-up their power generation at home or business using renewable energy sources.
According to Minn. Stat. § 216C.41, the Minnesota Renewable Development Fund started offering 1¢ to 1.5¢ per kWh against electricity produced through various renewable energy resources like biomass, hydroelectric, wind, anaerobic digestion etc. in order to receive the incentive, the hydro facilities must be located at the dam site. Since May 2007, farms using anaerobic digesters to produce gas are eligible to receive the incentive. This makes it very much clear that the farm was no longer required to produce electric from the gas to receive the incentive. But, the amount paid through this incentive has not been calculated for anaerobic digesters.
According to Minn. Stat. § 272.02 enacted on 18th May 2002, the value added by solar systems is exempted from the real property taxation. Wind energy systems are also exempted from the state’s property tax. But the property on which the system is installed is not exempted from states tax. Since 2002, all large wind-energy systems received a production tax. Systems generating energy greater than 12 MW were charged 0.12 cents per KWh and those generating between 12 MW and 2 MW received 0.036 cents per kWh. Various systems with a capacity less than 250 kWh are exempted from the tax. According to Minn. Stat. § 272.029 enacted in 2006, the revenue generated from the tax is distributed to local taxing districts. According to Minn. Stat. § 272.028 a local government can negotiate a lower tax to promote wind or solar development.
According to Minn. Stat. § 297A.67 all solar systems which were purchased after August 2005 were given 100% sales tax exemption. Eligible renewable technologies are solar space heat, solar water heat and photovoltaic. Customers from residential and commercial sectors are eligible to apply for this sales tax exemption. No expiration date was implemented for this incentive.
In 2007 Minnesota legislature started the Renewable Energy Equipment Grant Program to fund installation of various systems. Eligible renewable technologies are biodiesel and solar space heat. Only families having low income are eligible to apply for. A maximum amount of $4,700 can be offered under this program. The applying system must be standardized by the Energy Assistance Program. And each grant will associated with a weatherization project. This renewable and conservation energy program is mainly aimed at giving maximum benefit to the low income families.
According to Minn. Stat. § 41B.043 enacted in 1995, Minnesota Department of Agriculture started Agricultural Improvement Loan Program in collaboration with Minnesota Rural Finance Authority. Under this low interest loan program, farmers can avail loans for improvements to their agricultural facilities. Wind energy systems with a capacity of 1 MW are eligible under this loan program. The loan is made available by various financial institutions under RFA. RFA has more than 400 such financial institutions under a Master Participation Agreement. RFA has limited its share to 45% of the principle or $200, 00 whichever is less. Since September 2008, the interest is lowered to 5.5%. The person applying for the loan must also be the owner of the system and must not have a total net greater than $398,000.
The Minnesota Housing Finance Agency started its Home Energy Loan Program to offer low interest loans to all Minnesota homeowners. This program is administered by the Center for Energy and Environment Financial Resources. The loan must be applied in conjunction with various home improvements. Eligible renewable technologies include building insulation, water heaters, boilers, furnaces etc. But the program administer may allow some custom improvements under special circumstances. The applicant must be having a residential property for a single family and 49% of it can be used for business. The borrower must have purchased the property. A maximum amount of $10,000 can be availed through this program. The loan will be sanctioned with 6.25 APR and the repayment term is kept at 5 years.
Minnesota Housing and Finance Agency (MHFA) started Minnesota Energy Loan Program under which all single family homes, duplexes and quads are eligible to avail low interest loans. This program was implemented for the improvement of renewable energy initiatives. The borrower must have an annual income below $91,000. An amount in the range of $2,000 to $35.000 can be availed through this loan. A fixed interest of 6.25% is charged with a repayment period in between 1 to 20 years which is decided based on the amount of the loan. The applicant should apply to Neighborhood Energy Connection (NEC) to get an energy audit done.
All Minnesota rental property owners are eligible to avail the Rental Energy Loan. This energy loan is provided to increase the energy efficiency of the buildings. The loan borrower must have at least one third interest in the property. An amount in the range of $5,000 to $10,000 can be availed through this loan and interest rate charged will be 4% APR. The repayment period is 1 to 5 years, but there is no penalty for prepayment.
Under Residential Energy Conservation Loan Program started by Dakota Electric and Anchor Bank, customers are eligible to avail loan for any kind of energy efficient improvement in their home. An amount in the range of $1000 to $5000 can be availed with an interest of 7.99%. Repayment period is kept at 5 years. The rate can be adjusted for any further loan. Various eligible efficiency technologies under this utility loan program include lighting, doors, windows etc.
Minnesota Valley Electric Cooperative started Energy Conservation Loan Program through which low interest loans can be availed by residential customers. The funding can be used for energy efficient improvements in their homes like weather stripping, thermal windows, heat pumps, electric water heaters etc. This funding can only be used for replacement. A maximum amount of $3,000 with an interest of 5% can be availed through this program.
Customers of Stearns Electric Association are liable to get Energy Resource Conservation (ERC) loans. These loans are available at low interest of 5%. An amount up to $3,000 can be availed through these loans. The funding can be used for energy improvement in homes or businesses. The repayment period is set at 5 years. Various eligible technologies include water heaters, heat pumps, equipment insulation, air sealing etc.
Rebate programs
Solar Hot Water Rebate Program
All the residents of Minnesota all eligible to avail rebates for solar hot water heaters under Solar Hot Water Rebate Program run by the Minnesota Office of Energy Security (OES). These are available for new systems and also for repairing of faulty ones. The rebate level is fixed at $30 per square foot of net aperture. The rebated systems must pass various equipment, warranty and installation requirements. The OES will inspect and monitor the systems so that it meets the rebate requirements. Under solar rebate program an amount of $700,000 is allocated for various rebates. The owner must install the system within one year after getting the rebate confirmation.
Solar-Electric (PV) Rebate Program
Xcel Energy has funded Solar-Electric (PV) rebate program under the administration of the Minnesota Office of Energy Security. Under this program an incentive of $2 per watt is provided. The maximum amount is capped at $20,000 per system. Only 5 rebates per participation are allowed. And moreover rebate can not be provided with Xcel Renewable Development Fund Support. The program has set an aim of installing 500 kW or grid connected PV systems in the state of Minnesota. Since January 2004, all electric customers in Minnesota are eligible to apply for this program.
Great River Energy (28 Member Cooperatives) – Solar-Electric (PV) Rebate Program
Every customer of Great River Energy (GRE) is eligible to avail a rebate of $2,000 per kW for grid connected solar electric systems. The rebates maximum amount is capped at $4,000 per customer. This rebate offer can also be availed in conjunction with state’s Solar Electric Rebate through which an additional $2,000 per kW can be availed. In order to qualify, the installation completion deadline must be met and it will be set by the Minnesota Department of Commerce. The rebate is available on a first come first served basis. Systems with a capacity of lower than 1 kW are not eligible to apply for. Each system cannot avail a total rebate of more than $20,000.
Alexandria Light and Power – Residential Energy Efficiency Rebate Program
All customers of Alexandria Light and Power (ALP) are eligible to avail various rebates like Energy Star Appliance rebates, Energy Star Residential Water Heater rebate etc. eligible appliances include dishwashers, central AC, heat pump, clothe washers etc. also a rebate in the range of $200 to $350 can be availed for hot water heaters. A rebate of $1.5 per light bulb can also be availed in case of a purchase of 10 or more compact fluorescent light bulbs. Application for the rebate should contain a copy of the original dated sales receipt.
Hutchinson Utilities Commission – Residential Energy Efficiency Program
Customers of Huthinson Utilities Commission (HUC) can avail a rebate of $500 in case of energy conservation improvements to their homes. Various appliances are eligible for the rebate like boilers, heat pumps, clothe washer, water heaters etc. the incentive amount will be decided based on the appliance. Equipments must pass the requirement criteria set by the program. The application is processed by first come first served basis. And the applicant is required to submit an original dated sales receipt along with the application for the rebate.
