The formula was approved by the state’s utility regulators last week.
As well as the dollar value of the excess electricity sold back to utilities by customers with on-site solar photovoltaic installations, the formula takes into account the environmental and social costs of carbon emissions from fossil fuel power generation, using the federal government’s so-called social cost of carbon estimate.
Agreement on the formula comes after several years of debate, with utilities calling the retail rate under net metering an unfair subsidy for on-site solar, and solar groups arguing that it undervalued the power they generated.
Under Minnesota law, subscribers to so-called community solar gardens – solar installations that provide power to participants who buy in – will receive the value-of-solar rate. Application of the rate to other customers is voluntary for investor-owned utilities.