Governor’s energy proposals seek to unlock federal funds, grow Solar for Schools

On the day that Gov. Tim Walz signed into law a state carbon-free electricity standard, Commerce Commissioner Grace Arnold told the House Climate and Energy Finance and Policy Committee Tuesday that the federal government is sending money Minnesota’s way to ease in that transition.

But Minnesota has to give to get something, as many of the renewable energy provisions in the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 require a state match. That’s why the governor’s proposed energy budget contains $114 million for a state “Competitiveness Fund” that will unlock billions in federal funding.

That’s the biggest ticket item among the governor’s $235 million in energy budget recommendations for the next biennium. Among the governor’s other top priorities are expanding the Solar for Schools program and helping homeowners pay for weatherization and protecting against extreme weather.

“There are a lot of resources that are coming in to build the clean energy economy,” Arnold said. “My hope is that Minnesota is well positioned to take advantage of all of those.”

The second largest sum in the governor’s recommendations is $61.5 million in one-time money to expand the Solar for Schools program that was established in 2021 with an initial outlay of $16 million. Arnold suggested that, with the increase in funding, every public school in Greater Minnesota outside of the Xcel Energy service area could add solar, with up to 723 schools in 187 school districts able to add a 40 kilowatt system.

The governor’s proposal for “strengthening Minnesota homes” would come to $32 million for the 2024-25 biennium. Modeled after programs in other states that Arnold said have found success, it would provide grants to protect homes against extreme weather, ideally reducing homeowner insurance premiums.

Upgrading homes is also the focus of $24 million in proposed funding for pre-weatherization grants and a related workforce training program. It would help pay for home repairs so residents can qualify for weatherization assistance.

The governor’s proposed budget also suggests $1.26 million for energy resources and planning, $1.1 million to maintain current service levels, and $1 million for grid reliability.

Rep. Chris Swedzinski (R-Ghent) asked Arnold, “What guarantees do we have that this will lower peoples’ bills if this budget is to move forward.”

“We represent the public interest at the Public Utilities Commission,” Arnold replied. “And, through that work, we’ve saved Minnesotans hundreds of millions of dollars over time. So, you can look at our past work. I will say that certain sectors of peoples’ energy costs are really vulnerable to price increases and the fossil fuel-based ones are particularly vulnerable to price variability. And we don’t have any authority to regulate that.”

Rep. Spencer Igo (R-Wabana Township) asked what the department is doing to bring stable supply chains for solar panels to the state.

“A good chunk of that is outside commerce’s purview,” Arnold replied. “We don’t deal with foreign affairs. I will say that there are a number of provisions in the federal bills that direct American-made manufacturing. We’ll see how those go.”