Xcel Energy plans to construct a third solar array at its under-development solar farm in Becker, Minnesota, making it one of the largest solar complexes in the US. The addition will increase the project’s total capacity to 710 megawatts, enough to power more than 150,000 homes each year on average. The solar farm will take over the capacity lost when the coal-fired Sherco Unit 2 generator retires at the end of this year and when Sherco’s coal-fired Unit 1 generator closes in 2026.
Xcel’s proposal, if approved, will create an estimated $110 million in payments to landowners and local taxes and $240 million in local economic benefits from the first two arrays. The first phase of the Sherco Solar project is expected to be completed in 2024, followed by the second phase in 2025, with the entire complex finished by the end of 2025.
However, Xcel acknowledged that the costs of new solar farms and clean energy projects have been rising significantly. In a recent bid for solar proposals, the company found only two cost-effective projects, one being the Sherco addition, and the other a 100-megawatt solar project in Polk County, Wisconsin. The 710-megawatt total capacity at Sherco will help replace the electricity lost from the retirement of a 680-megawatt coal-fired generator in Becker.
Factors driving up the prices for solar projects include ongoing supply chain constraints, high labor costs, and rising interest rates that increase borrowing costs. President Joe Biden’s 2022 clean energy legislation has created tax credits to help cover some of the cost increases but has also increased demand for clean energy projects, further putting upward pressure on prices.
Despite concerns about costs, the Minnesota Public Utilities Commission (PUC) approved Xcel’s 460-megawatt Sherco project in September. Construction began on the first phase of the 460-megawatt Sherco solar project last month, and if the PUC approves the 250-megawatt addition, it will create another 90 trades jobs. Several more solar projects are pending before the commission, all of which are also facing rising costs.
Sources:
1 – https://www.startribune.com/
2- https://bringmethenews.com/