In Rural Heartland: Solar is the New Wind

March 14, 2018

solarfranken

Frankenmuth, MI – I’m here for most of the day at a Michigan State University extension service workshop on solar power for landowners. Big room is jammed with farmers, landowners, planning and zoning officials,  and interested parties from around the east and southeast side of the state.

It’s a bit of a microcosm for what’s happening across the midwest as the renewable revolution rubber meets the rural road.

In response to the explosion of wind energy in the past decade  –  Coal financed “wind-bagger” anti-wind efforts predictably sprang up around the midwest, talking about “wind energy syndrome” and other imaginary boogey men.

As I predicted some years ago, now that solar is exploding, we are seeing an under-the-radar effort to convince the good people of the midwest that “solar cell syndrome” is a thing.  Fortunately, it looks like practical midwesterners overwhelmingly approve solar development, and see it as both a new source of revenue, and a way to move away from toxic and obsolete fossil fuels.

Michigan State University Extension:

Since the first part of the year, solar companies have been actively contacting farm owners in an effort to secure land for solar energy projects. This is in response to the Michigan Public Service Commission raising the avoided cost of electricity to 9.5 cents per kWh. At this rate, solar projects are profitable. The new tariff on imported solar modules will most likely have little effect on this activity. The prevailing industry thought is that the cost of a solar project will probably increase 10 to 15 cents per dc watt, which puts projects at about the same cost as they were in September 2016, a banner year for solar projects.

Midwest Energy News:

The number of customers selling electricity back to the grid in Michigan climbed again in 2016, according to an annual report released by the state last month.

The state’s net-metering program, which lets ratepayers sell surplus power back to the grid at retail prices, added 427 customers and nearly 5 megawatts of capacity, most of it from solar.

While the state’s total solar capacity doubled last year through utility-scale projects, net-metering momentum is at risk after 2018, as the state prepares to replace net metering with a tariff aimed at better reflecting the value of solar and other forms of distributed generation.

The Michigan Public Service Commission spent much of 2017 designing a replacement for the state’s decade-old net metering program, a requirement under the state’s sweeping 2016 energy law. The net-metering debate has revolved around whether customers’ use of solar panels is being subsidized by other ratepayers, or if the systems provide a net benefit to the electric grid.

solarbutterfly

Solar arrays can offer opportunity for greater biodiversity, benefitting wildlife, birds, and pollinators, managing water runoff, – and in turn providing benefits for nearby farmers

A draft proposal released in December recommends a tariff based on an “inflow-outflow” model. Customers would pay retail price for electricity from the grid, and any excess electricity they generated would be purchased at an “avoided cost” rate based on Public Utility Regulatory Policies Act (PURPA) contracts. That’d mean about 5 cents less per kilowatt hour compared to the existing net-metering program.

Julie Baldwin, MPSC renewable energy manager, said it’s too soon to predict how the new tariff could affect solar installations. Customers who install projects before mid-2019 will be grandfathered into the existing net-metering rates for another decade, and specific rates under the new tariff will likely be set for each utility in future rate cases.

“Without knowing exactly how the numbers are going to shake out for the new tariff, I don’t have a sense of what will happen to growth when it goes into place,” Baldwin said.

Baldwin and others said they have not noticed a rush into net-metering agreements ahead of the changes, as was the case in Indiana last year as the state begins to phase out its net metering program

Allan O’Shea, president of Michigan-based CBS Solar, said the potential changes are not catastrophic.

“I’m not wallowing around in a bunch of self-pity. We had a banner year (in 2017) and we plan on it again,” O’Shea said. “Many (customers) just don’t care — they’re going to build what they can build.”

Solar advocates contend that it’s not yet clear whether net-metering customers are a net cost to the grid. They want the commission to take more time to answer that key question and keep net metering in place until then.

“I’m very concerned that they’re rushing to do something they haven’t fully thought through the consequences of,” said Becky Stanfield, senior director of western states at Vote Solar, adding that the new tariff proposal is far more complicated and risks undervaluing grid benefits and extending payback times for owners.

Ed Rivet, a member of the Michigan Conservative Energy Forum’s leadership council, said he is “somewhere between surprised and disappointed” that 2017 came and went without some closure on the solar cost-of-service question. Rivet is also a net metering customer who thinks he provides a net benefit to the grid. If he isn’t, Rivet said utilities would likely have been able to prove that by now.

“I think there’s enough information to say net metering is a win-win-win, let’s just roll with it,” he said.

Michigan’s two largest utilities, DTE Energy and Consumers Energy, said they were reviewing the proposal and would issue formal comments later.

“DTE believes any distributed generation tariff should account for the true cost of service for building and maintaining both utility power plants and the distribution grid,” DTE spokeswoman Cynthia Hecht said.

Baldwin said the new tariff is still open for debate, and that the value of net metering customers to the grid “is difficult to quantify.”

“I think there is room to look at other methods to value the outflow,” she said, adding that it could be a “long-term project” to quantify overall grid benefits from distributed generation projects. “One thing we know is we’re not going to get this exactly right the first time.”

Amy Heart in Solar Power World:

Michigan is home to hundreds of solar companies that have created thousands of jobs for the state. The relatively small but budding solar industry has grown significantly over the past several years thanks in part to forward-thinking, common-sense energy policy by state legislators.

MJS Solarfarm, nws, sears, 5

However, this progress is at risk due to a proposal from energy regulators at the Michigan Public Service Commission that aims to eliminate retail net energy metering. Eliminating retail net metering without a solid, tested rate design framework and methodology in place will destabilize Michigan’s growing solar industry, putting 4,000-plus solar jobs in the state at risk.

There’s simply no good reason to move away from retail net metering. Last year, the Michigan state legislature directed the Commission to find a tariff that represents an equitable cost of service for net-metering customers. A full cost of service examination or study of net-metering customers was never performed. In fact, according to the Commission’s own research, net-metered solar systems provide a net-benefit for all ratepayers.

Think about it—if more people are producing their own power right at the source, there will be less need for new, expensive building poles and wires. There will also be less wear and tear on the power lines, meaning less need for maintenance and repairs. Because of benefits like these, there is no reason to slash the value of solar and punish customers.

There is no rush. Let’s get it right. Currently, residential solar makes up merely 0.5% of the grid in Michigan.The Commission should follow national standards and keep its current solar rate design in place. The National Association of Regulatory Utility Commissioners (NARUC) recommends not considering a change to solar net-metering policies until distributed solar makes up 5% of an electricity grid.

Policymakers in Michigan are preparing instead to devalue rooftop solar, endanger the solar economy in the state and possibly leave many unemployed. Nevada made the mistake of eliminating net metering in late 2015 without having a fair replacement. This decision disrupted the economy virtually overnight, sending thousands of workers out of the state to look for new jobs. The governor restored net metering in 2017.

Why would Michigan be discouraging something that is good for the economy and the electricity grid—and wildly popular with people across the state? Polling shows that more than 80% of Michigan voters across party lines favor increasing the state’s use of solar energy. It’s clear that Michigan wants power by the people, from the people. Instead of making homegrown solar inaccessible, Michigan can keep a level, fair playing field for rooftop solar.

The Commission must maintain the current solar billing structure of retail net metering until it has conducted a full cost of service study through a contested proceeding and approved an appropriate tariff, as it has been statutorily directed by the state legislature.

If you support rooftop solar in Michigan, make your voices heard by visiting our action page and submitting a comment to the Commission’s public docket: http://allianceforsolarchoice.p2a.co/NCf3oUm

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One Response to “In Rural Heartland: Solar is the New Wind”

  1. Sir Charles Says:

    I always perk my ears up when I hear the word ‘Heartland’. But this time it’s not the ominous institute :-p


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