COLOGNE, Minn. (WCCO) – Cologne is the first city in Minnesota to get all of its electricity supplied by the sun.

City leaders inked a deal that will switch all city-owned buildings to solar power within the next two years.

But it comes at a time that other solar power developers across the state may have to scale back their earlier plans. That’s because a new state law means the Public Utilities Commission, which regulates the state’s utilities, will limit the amount of energy generated.

The law will limit the maximum output to half the amount solar energy proponents had envisioned.

Cologne might be small in size, at around 1,500 residents, but it is big into clean energy. The Cologne city hall and community center is heated and cooled entirely from geothermal wells.

“Here’s an opportunity to go green, offset our usage and save some money,” city administrator Jesse Dickson said.

The city has contracted to get all of its electricity from the sun. Cologne entered into a contract to buy all of its power for its buildings, pumps and plants, from SunShare, a developer of community solar gardens.

“As soon as SunShare and the panels start producing power, hypothetically, we will immediately start seeing savings,” Dickson said.

It hopes to trim savings from the annual electricity expenditure of $140,000 by entering into the 25-year, fixed-cost contract. That will guarantee the city will not see its energy bills rise.

A 2013 state law allows construction of industrial-sized solar gardens to turn sunshine into electricity. Xcel Energy is obligated under the law to purchase the power and sell it back to customers like Cologne. The city will, in turn, receive at least a 5-percent solar credit against their energy bill.

“We will build the systems and handle all the complexities,” SunShare’s policy director, Ross Abbey, said.

SunShare had planned five or more clusters of solar gardens, each generating up to 10 megawatts of power.

But last week state regulators felt that exceeded the law’s intent and voted to authorize only half that amount – five megawatts per cluster of five solar gardens.

“This will place some limits on the market, but we’re hopeful that as we start to develop our first projects, deliver solar credits to satisfied subscribers, people will want to see more of this stuff,” Abbey said.