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Distributed Generation and the Minnesota Value of Solar Tariff

August 2018

Citation: ELR 10726

Author: Ellen Anderson

Prof. Richard L. Revesz and Dr. Burcin Unel propose an “Avoided Cost Plus Social Benefit” valuation protocol for clean distributed energy. Their article establishes that distributed generation (DG) provides a suite of benefits to the grid and to our broader societal goals, and it should be compensated for those benefits, and that DG can also lead to additional costs to the grid and can raise the potential of cost-shifting. But there is a significant gap in their article’s analysis. If rate and tariff designs are constructed with good intentions of fairness and rationality but have the actual effect of stopping DG deployment, then the solutions are fatally flawed. This assertion can be explained by a discussion of Minnesota’s experience with DG. 

Ellen Anderson is the Executive Director of the Energy Transition Lab at the University of Minnesota. Previously, she served in the Minnesota Senate and chaired the Minnesota Public Utilities Commission.

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