Solar*Rewards offers path to saving money for Minnesota schools

Cristo Rey Jesuit High School is a small college prep school for young students who live in urban communities with limited education options. It’s located just south of downtown Minneapolis.

In 2019, the school decided to take advantage of several programs that gave them a path to installing solar on its school building, that didn’t require any upfront capital. The team at iDEAL Energies introduced them to Minnesota’s Solar*Rewards program, combined with the city of Minneapolis’ green cost share program which made solar a viable option for the school, with full ownership transferred to the school after 18 years.

Minnesota’s Solar*Rewards program

Minnesota’s Solar*Rewards program is administered within Xcel territory, and provides recipients with 10 years of annual incentive payments based on the solar energy system’s annual production. In recent years, a low-income schools carve out was also added, to give more schools the opportunity to use the program.

Solar’s changing equation

Matthew von Ende is Cristo Rey’s General Manager, he says the school was first approached by solar developers back in 2012. At that time the out-of-pocket expense for the school and the long 28-year return on investment made solar a non-starter. He explains that in the 7 years that followed, solar panel prices dropped, Xcel Energy started new programs to stimulate solar like Solar*Rewards, and new financing options appeared on the table that allowed the district to say yes.

Braden Solum is the Business Development Director with iDEAL Energies. He says the return on investment for schools like Cristo Rey is “exceptional!”

“Solar*Rewards allows schools, cities and counties to be able to do projects that are financially feasible, that are smaller, around 40 kW. Most finance companies won’t touch anything that’s smaller than 250 kw. It’s not worth it to them to do these small transactions. Solar Rewards offers an injection of a little bit of money to a project, which makes it financially feasible for small buildings to be able to participate in on-site solar,” Solum says.

Cristo Rey energy savings

When it comes to Cristo Rey’s energy savings, von Ende is conservatively estimating 15% savings this year which translates to about $30,000 in energy savings a year. While the solar project went online in early 2020, due to Covid-19, the school closed down fully for about 9 months which led to a huge drop in energy costs. Von Ende says because of covid he hasn’t been able to do a true comparison to past years energy use, but he’s looking forward to that day.

“My goal is to continue to find ways to reduce operating costs, and because we’re in an old part of the city of Minneapolis, our building is so much more energy efficient than our old building [new school was built in 2007], and many of the buildings in this part of the city. Solar for us was one one part of a larger puzzle in reducing our energy costs, and lowering our overall carbon footprint,” von Ende explains.

Solar*Rewards is a job creator

Not only does the Solar*Rewards program help school districts across Xcel territory say yes to solar, it helps save districts and taxpayers money. And Solum adds, the program also supports a lot of jobs across the state.

“Most solar jobs in Minnesota are in the small commercial and residential market. That’s where all the jobs are. The sheer number of people that are employed because of this program is significant,” says Solum.

According to the 2020 Clean Jobs Midwest Report, Minnesota’s solar industry employs nearly 5,000 Minnesotans. Plus, solar installer is listed as one of the fastest growing professions in the state.

Funding the program

Solar*Rewards was established in 2016 by the Minnesota Legislature to support Minnesota homeowners and businesses to add solar. In 2021 the program received $10 million, which Solum says went extremely quickly, in fact it is nearly gone as of mid-April. The fast-paced use of the program shows just how popular it is with Minnesotans.

Negotiations are currently underway at the Legislature to extend the Solar*Rewards production incentive. The Senate is proposing $5 million in funding each year in 2023 and 2024. Without additional funding, the program is scheduled to sunset at the end of 2022.