Michigan Senators Jeff Irwin (D-Ann Arbor) and Ed McBroom (R-Waucedah Township) introduced Senate Bills 152 and 153 this week to enable a statewide community solar market Wednesday.
The two tie-barred bills would allow Michigan residents and businesses to subscribe to a portion of production capacity from off-site solar facilities and receive a credit on their utility bills. Such facilities could be constructed, owned, and operated by third-party solar developers.
Similar bills have been introduced but have not made it out of committee. Advocates are more hopeful that the bipartisan bill will gain traction this session, with Democrats controlling both houses of the Michigan Legislature and the governor’s office.
The bill would limit community solar projects to 5 MW of maximum nameplate capacity and enable homeowners, small businesses, government buildings, schools, and churches to share in that capacity.
Michigan law currently does not provide for community solar, and utility companies are not required to give bill credits to individuals who subscribe to such facilities. As a result, advocates say, Michigan’s solar power market has not reached its potential.
“Community solar will be a job creator across Michigan,” Laura Sherman, president of the Michigan Energy Innovation Business Council, wrote in a statement. “We need policymakers to unleash its potential by passing legislation allowing more local, cost-effective community solar projects to get off the ground. This will create jobs, support local businesses, and it will help to strengthen our electric grid.”
Advocates also say community solar can make renewable energy more accessible and affordable the more than half of Michigan residents who cannot install solar energy because of roof limitations, property ownership, or financial barriers.
“The introduction of this legislation – especially as Michigan still recovers from the recent massive power outage – is an important step forward in expanding the accessibility and availability of clean, affordable, reliable, and renewable energy to all Michiganders,” the Michigan Community Solar Alliance said in a statement.
Utility opposition and ‘community solar’ alternatives
Michigan’s electric utilities, including DTE and Consumers, have long opposed community solar, arguing that it would favor “unregulated,” “out-of-state developers” who would “destabilize” Michigan’s grid.
“This new legislation is unnecessary and would lead to higher rates by requiring all utility customers to purchase power from unregulated third-party developments at inflated prices,” Consumers Media Relations Manager Brian Wheeler wrote in an email to Planet Detroit Thursday. DTE Energy did not respond to Planet Detroit’s request for comment.
In 2021, DTE and Consumers partnered on a campaign to launch and promote their own utility-owned alternatives to community solar. Under these programs, customers can help subsidize utility-owned solar by volunteering to pay a premium. DTE launched MIGreenPower, and Consumers launched Solar Gardens.
Wheeler points to Solar Gardens’ success as a reason community solar legislation is unnecessary.
“We are investing over $4 million over the next four years to expand [Solar Gardens] for future customers. We also are adding clean, solar-generated electricity for Michigan on a timetable that’s among the most aggressive in the U.S. We will be adding 1,100 megawatts of utility-scale solar by the end of next year, and nearly 8,000 megawatts by 2040,” Wheeler added.
As part of a 2021 settlement agreement with environmental groups, DTE agreed to pay 30% of the costs to construct three solar installations of at least 250 kilowatts in Highland Park, River Rouge, and Detroit as a part of a low-income subscribed power program. Under this agreement, DTE would own the solar arrays and issue monthly bill credits of $25-$30 to certain customers in those cities.
A council composed of three low-income residents and representatives from a nonprofit, small business, and DTE were to oversee and implement the program. According to Will Kenworthy, regulatory director with Vote Solar, the organization managing the council, progress has been slow and project sites have not yet been identified.
Michigan’s solar cap
Under current state law, utilities must allow up to 1% of a utility’s annual average peak load to participate in distributed generation programs, which credit distributed customers who own solar arrays for the excess energy they send to the grid. That helps the return on investment for solar owners. About half of those can be residential customers.
The bills come as DTE Energy is set to hit its cap — as soon as July. DTE is currently negotiating a “successor tariff” with regulators that will govern what kind of credit to offer to customers with solar who connect to the grid once the cap is reached.
Great Lakes Renewable Energy Association’s senior energy analyst John Richter said he and other advocates are hoping for a higher compensation rate than DTE has proposed.
It’s not clear if community solar would come under the distributed generation tariff, according to Richter.
Richter says his organization’s two main policy priorities include enabling community solar and raising or removing the cap on distributed generation participation.
“We are very optimistic that bills on community solar and removing the cap will be written, and now it’s going to be our thing to get them passed,” he said. “Recent power outages underscore the importance of citizens’ ability to generate and store their own energy. The utilities have shown that we cannot rely on them.”