Renewable Energy Production Incentive

Supported by the state's Renewable Development Fund, Minnesota offers a payment of 1.5¢ per kilowatt-hour (kWh) for on-farm biogas facilities. Previously, this incentive also offered payments to wind and hydroelectric facilities, but no new incentives are being offered for these technologies.

Hydro Facility Eligibility

Generally, the incentive is available to hydro facilities located at the site of a dam, if the dam was in existence as of March 31, 1994, and begins generating electricity after July 1, 1994 or generates electricity after substantial refurbishing of a facility that begins after July 1, 2001. In order to receive payments, qualifying hydro facilities must begin operation by December 31, 2011. The payment period for hydroelectric facilities may not extend beyond December 31, 2021.

On-Farm Biogas Facility Eligibility

On-farm biogas recovery facilities must be located at the site of an agricultural operation. Payments may be made for electricity generated from on-farm biogas recovery facilities that are operational between July 1, 2001 and December 31, 2017, though no payments may be made on electricity generated after December 31, 2015. Note that in May 2007, the Renewable Energy Production Incentive was amended to make the actual gas produced by on farm anaerobic digesters eligible to receive the incentive beginning July 1, 2007. In other words, it is no longer required that the gas be used to produce electricity. Payments may be made for gas generated from on-farm biogas recovery facilities for facilities that are operational between July 1, 2007 and December 31, 2017.

Wind Facility Eligibility

Minnesota also issues a payment of 1.5¢/kWh for electricity generated by new wind-energy projects less than two megawatts (MW) in capacity. However, the program was closed to new applicants on January 1, 2005 and the in-service deadline for wind incentives expired January 1, 2008. Approximately 225 MW of small wind facilities are subscribed in the program. No payments may be made to these facilities for electricity generated after December 31, 2015.