When solar advocates in Minnesota pushed legislation creating solar rebates two years ago, they didn’t anticipate that the cost of photovoltaics would fall so far between then and now. As such, they’ve ended up with a benefit program rich enough to potentially cover more than the cost of a solar installation.

With incentives from the state, the utility and the federal government—particularly for locally made photovoltaics—Minnesotans could theoretically qualify for incentives that more than pay for the entire system costs. As such, Xcel Energy (NYSE: XEL) has delayed implementing the Minnesota version of its Solar*Rewards rebate program.

Xcel proposed a new rebate structure that would reduce future rebates and locally-made incentives, according to the Star-Tribune. The rebate level, currently at $2.25 per installed watt, is being looked at by the state’s public utilities commission, said Minnesota Solar Energy Industry Policy Director Lynn Hinkle.

“The docket has been submitted both by Xcel and the Division of Energy Resources,” Hinkle said. “We drafted legislation two years ago that did not anticipate an accelerated depreciation of solar. We’re making adjustments, and trying to operate within the spirit of the law, but we have had some difficulties in trying to make those adaptations based on laws at the federal level that we didn’t anticipate.”

For that reason, there has been a delay in the incentive, according to Hinkle.

Most of the puzzle pieces are in place for a lessened rebate, but Xcel remains cautious, according to Hinkle.

“They want to make sure they can have the clearance to go ahead and not run into problems with the PUC,” he said. “It’s just unfortunate that it took a little extra time at the beginning of our installation season.”

The holdup, however, has caused some companies issues. For instance, the Star-Tribune said that TenKsolar, a MInnesota-based solar manufacturer, had upped its inventory for the spring, anticipating a busy season. But since people can’t apply for the rebates, the company had to resell the modules out-of-state.

"We thought that product was sold, so we basically had to sell it again," TenKsolar’s Joel Cannon told the newspaper.

The Minnesota solar rebate is more of an economic growth policy than an energy policy, Hinkle said.

“People have been highly motivated to make sure the jobs and economic development that can come from these installations is realized,” he said.

Image courtesy of NREL.