Three utility buildings are receiving solar panels this year thanks to a grant from the Minnesota Department of Commerce. The panels will be installed on the electric distribution department (EDD) building, Natural Gas building and Water Department buildings. All three solar arrays have a life expectancy of 30 years.

“This is exciting,” New Ulm Utilities Energy Services Representative Derek Nelson said. “It is good to show the public that we are trying to diversify our energy resources.”

He said NUPU has purchased renewable energy through power sharing agreements, but the solar panels represent a local source of renewable energy.

Nelson learned about the Solar on Public Buildings Grant in July of 2025. The grant was previously only available for buildings located in Xcel Energy service territory, but it was expanded this last year.

The newly installed solar panels on the Dlectric Distribution Department (EDD) building were purchased using a Department of Commerce grant that covered 70% of the installation cost.

Nelson said the turnaround to apply for the grants was quick, but they were approved for installing three different solar arrays. The grant limited the solar arrays to under 40 kilowatt-hour (kW). The total cost for installation of the three solar arrays is $185,049, but the grants will cover 70% of the cost of installation, with a 30% match paid by the NUPU.

Nelson said all energy production has a downside. With solar power, installation costs can be prohibitive, but through the grant the system is affordable and should not increase utility rates for customers.

Installation of the panels on the EED building began last week. Nelson said the EDD solar panels is a 13.056 kW panel and costs $48,279. Over its 30-year lifespan the panel is expected to produce 534,619 kW of power.

The Natural Gas Department array is rated at 12.672 kW, costs $48,270 and is expected to produce 511,705 kWh.

The Water Department array is the largest of the three at 31.5 kW and costs $88,053.12. This solar array is estimated to average 34,000 and 35,000 kWh per month and produce 1.05 million kW over its lifetime.

Nelson said cost savings from the panels will be based on electrical rates, which will likely change over time. It is expected the panels will quickly pay for themselves.

The solar panels are not currently generating power. Nelson said once all three arrays are installed, NUPU will be able to commission the units. Installation time is dependent on the weather. Nelson estimated the solar project could be ready within the next four weeks.