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Incentives/Policies for Renewables & Efficiency

Printable Version
Renewables Portfolio Standard   

Last DSIRE Review: 07/30/2014
Program Overview:
State: Minnesota
Incentive Type: Renewables Portfolio Standard
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Municipal Solid Waste, Hydrogen, Co-Firing, Anaerobic Digestion
Applicable Sectors: Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative
Standard:Xcel Energy: 31.5% by 2020
Other IOUs: 26.5% by 2025
Other utilities: 25% by 2025
Technology Minimum:Wind or Solar (Xcel only): 25% by 2020; maximum of 1% from solar
IOUs: 1.5% from solar by 2020, 10% of which must be met with systems 20 kW or less
Statewide goal: 10% solar by 2030
Credit Trading:Yes (M-RETS); some limitations apply
Credit Transfers Accepted To:M-RETS into MIRECS, NAR, NC-RETS
(Refers to tracking system compatibility only, not RPS eligibility. Please see statutes and regulations for information on facility eligibility)
Authority 1:
Date Enacted:
Date Effective:
Minn. Stat. ยง 216B.1691
02/22/2007 (subsequently amended)
Authority 2:
Date Enacted:
Date Effective:
PUC Order, Docket E-999/CI-04-1616
Authority 3:
Date Enacted:
Date Effective:
PUC Order, Docket E-999/CI-04-1616
2007 Compliance Year
Authority 4:
Date Enacted:
PUC Order, Docket E-999/CI-13-720

In 2007, Minnesota legislation modified the state's existing non-mandated renewable energy objective, creating a mandatory renewable portfolio standard (RPS) called the Renewable Energy Standard for its public utilities, generation and transmission electric cooperatives, municipal power agencies, and power districts operating in the state. By the end of 2020, nuclear utilities (Xcel Energy) must generate or procure 30% of their retail electricity sales using renewable energy and an additional 1.5% from solar, all other public utilities must procure or generate 20% of their retail electricity sales using renewable energy and an additional 1.5% from solar, and non-public utilities must procure or generate 20% of their retail electricity sales using renewable energy.  

Eligible Technologies

Electricity generated by solar, wind, hydroelectric facilities less than 100 megawatts (MW), hydrogen, and biomass—which includes landfill gas, anaerobic digestion, municipal solid waste, the organic components of wastewater effluent, and sludge from public treatment plants (excluding waste sludge incineration)—is eligible for the standards and the objective. After January 1, 2010, hydrogen must be generated by other eligible renewables in order to be eligible.

Xcel Energy Standard

The RPS standard for Xcel Energy requires that the following percentages of retail electricity sales be generated or procured using eligible renewable sources by December 31 of the given year:

  • 15% by 2010
  • 18% by 2012
  • 25% by 2016
  • 30% + 1.5% solar by 2020 

Standard for Non-Xcel Public Utilities

The RPS standard for other Minnesota public utilities requires that the following percentages of retail electricity sales be generated or procured using eligible renewable sources by December 31 of the given year:

  • 12% by 2012
  • 17% by 2016
  • 20% + 1.5% solar by 2020
  • 25% + 1.5% solar by 2025 

Standard for Non-Public Utilities

The standard for other Minnesota utilities requires that the following percentages of retail electricity sales be generated or procured using eligible renewable sources by December 31 of the given year:

  • 12% by 2012
  • 17% by 2016
  • 20% by 2020
  • 25% by 2025

Carve-Outs for Public Utilities

In 2013, H.F. 729 was enacted, creating a 1.5% carve-out for solar for public utilities to meet by the end of 2020, 10% of which must be met with photovoltaic (PV) systems that are 20 kilowatt (kW) nameplate capacity or less.

In addition to the above solar carve-out, Xcel Energy is required to have at least 25% of retail electricity sales generated by wind energy or solar energy systems by 2020, with solar limited to no more than 1% of this additional requirement. In effect, this means that the wind standard is at least 24% of retail electric sales, the solar standard is 1.5% and may contribute up to another 1%, and the "remaining" 5% may be generated using other eligible technologies.

For the purpose of calculating the solar requirement, the following types of customers are not included: iron mining extraction and processing facilities, including scram mining; and paper mills, wood product manufacturers, sawmills, or oriented strand board manufacturers.

Solar Goal

In 2013, H.F. 729 created a statewide goal of 10% of retail electric sales from solar by 2030.


The 2007 legislation required the Minnesota Public Utilities Commission (PUC) to establish a program for tradable renewable energy certificates (RECs) by January 1, 2008. A REC is created for each MW of renewable energy generated. To comply with the RPS requirement, a utility must retire RECs. Notably, Xcel Energy may not sell RECs to other Minnesota utilities for RPS compliance purposes until 2021. For the purposes of the solar standard, only RECs associated with solar installed and generated in Minnesota on or after May 24, 2013, but before 2020 are eligible.

The PUC approved the Midwest Renewable Energy Tracking System (M-RETS) for this purpose and required all utilities to register renewable generation assets by March 1, 2008. Only RECs recorded and tracked through the M-RETS can be used for compliance. The program treats all eligible renewables equally and may not ascribe more or less credit to energy based on the state in which the energy was generated or the technology used to generate the energy. The purchase of RECs through M-RETS may be used in utility green pricing programs, subject to the shelf life described above. Consistent with M-RETS operating procedures, RECs must remain "whole" and may not be disaggregated into separate environmental commodities (e.g., carbon emission credits).

RECs will have a trading lifetime of 4 years according to the year of generation (e.g., RECs generated during 2008, regardless of the month, expired at the end of 2012). In July 2014, the PUC clarified that the generator of renewable energy owns all RECs.

Utilities are required to file annual compliance reports with the PUC detailing their retail sales, REC retirements, and REC trading activities. If the PUC finds a utility is non-compliant, the commission may order the utility to construct facilities, purchase eligible renewable electricity, purchase RECs, or engage in other activities to achieve compliance. If a utility fails to comply, the PUC may impose a financial penalty on the utility in an amount not to exceed the estimated cost of achieving compliance. The penalty may not exceed the lesser of the cost of constructing facilities or purchasing credits, and proceeds must be deposited into a special account reserved for energy and conservation improvements.

Compliance reports from individual utilities for 2008-2013 are available from the PUC through the E-Docket System. In 2013, the Division of Energy Resources published a compliance progress report for compliance through 2011, stating that utilities are on track to comply with 2012 goals.

Background: Renewable Energy Objective (2005-2010)

S.F. 4 (2007) modified Minnesota's non-mandated, "good faith" renewable energy objective. The revised objective, which applied to all utilities, called for eligible renewables to account for 1% of all retail electricity sales in 2005 and 7% of all retail sales by 2010. The PUC measured utilities' efforts to meet the objective to determine whether utilities are making the required "good faith" effort. In December 2008, the PUC issued an order clarifying how it would evaluate this "good faith" effort during the years (2006 - 2009) for which no benchmarks were defined by the statute. The order required utilities to retire RECs equivalent to 1% of their annual retail sales for the 2007-2009 compliance years (i.e., the calendar year). In effect, this both established a mandatory baseline compliance benchmark and allowed utilities to bank RECs—subject to the REC trading lifetime described above—in preparation for meeting the more stringent 7% objective in 2010. It could also be interpreted as setting a precedent for addressing similar issues in future years. Only RECs recorded and tracked through M-RETS could be used for compliance with the "good faith" objective. 

  Energy Information Center
Minnesota Department of Commerce
Division of Energy Resources
85 7th Place East
Suite 500
St. Paul, MN 55101-2198
Phone: (800) 657-3710
Fax: (651) 297-7891
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.