A bill traveling through the Minnesota Legislature could mean lights out for a state solar incentive program.
The legislation — which the House already passed — would end the Made in Minnesota solar incentive program, which helps homeowners and small businesses install state-built solar panels.
Supporters of the bill say the program has grown ineffective, while opponents say axing it could cost jobs.
The 10-year incentive program was started by the Legislature in 2013 to boost Minnesota’s solar industry. Residents who install panels manufactured in-state can qualify for subsidies based on the energy they generate.
Rep. Pat Garofalo, R-Farmington and co-author of the House bill, said he doesn’t think the program is worth its annual $15 million price tag.
“If a person wants to reduce pollution, create jobs or incentivize innovation, it fails on all three,” he said.
Some lawmakers on both sides of the aisle think the program should be dismantled, Garofalo said, adding other similar programs could lead to more solar energy for less costs.
Rep. Jason Metsa, DFL-Virginia, originally helped carry the bill that formed the program in 2013. Now, he’s a co-author on the bill that would dismantle it.
Made in Minnesota fell behind expectations once manufacturing companies began outsourcing their work to other countries, he said.
Companies now buy solar panels from overseas and add “some nuts and bolts” so they still count as Minnesota-made, Metsa said.
“My idea of Made in Minnesota solar means we’re doing the laminating, the manufacturing, etcetera, here at home in the state and it just wasn’t living up to those expectations,” he said.
But others say nixing the incentive program before its 2023 end date will yield negative consequences.
The program has helped produce 500 jobs and over 1,100 solar installations for small businesses and residences, said John Kearney, executive director for the Minnesota Solar Energy Industries Association.
“If this bill passes, we’ll lose about 150 jobs immediately, and these are good jobs, and over a period of two or three years we’ll probably lose 500 jobs,” Kearney said.
Costs would fall mostly on developers who rely on small-scale residential installation projects, he said.
Developers assumed they would have support under the original 10-year plan, Kearney said.
Canceling the program would also hurt residents’ chances of installing solar panels on their homes, said Ellen Anderson, executive director of the University of Minnesota’s Energy Transition Lab.
Small-scale solar projects can be pricey for residents, Anderson said, and the program adds affordability.
“For people who really want to put [panels] on their homes, having an incentive really helps make those projects move forward and it helps support many, many jobs,” she said.
The repeal would still honor Made in Minnesota incentive payments and rebates for customers who purchased systems through the program, Metsa said. But he acknowledged solar installation could now be costlier for new buyers.
Dismantling the program is a consequence of Democrats’ loss of control in the Legislature, he said. “I would’ve been tweaking the bill versus probably doing away with it had we been in charge.”
The bill would also rebrand the state’s renewable development account as the “energy fund account.”
Metsa said he signed onto the bill to ensure the annual $15 million budget stays in renewable energy development.
Lawmakers have yet to choose how the funds would be repurposed, Garofalo said, adding the money would be allocated in a separate bill later in the session.
“I think what you’ll see is that no matter what we do, it’ll be more effectively used,” he said.
The bill still has to pass through the Senate before it can be signed into law. Kearney said he thinks the bill will ultimately be vetoed if it reaches Gov. Mark Dayton’s desk.
