JACKSON — Consumers Energy has agreed to expand a solar energy program that advocates say is crucial to continue the sector’s growth in Michigan.
In recent months, clean energy groups have raised concerns about Consumers nearing the statutory cap in its net metering program. Under 2016 energy reforms, net metering programs will transition to utility distributed generation (DG) programs.
Both programs set rates at which utility customers with small-scale solar projects are compensated for excess power they send back to the grid. While utilities have been at odds with consumer advocates and installers about what the compensation rate should be, the credits act as an incentive to install small-scale solar and offset the initial investment.
Advocates told MiBiz last month they were concerned about Consumers reaching its 1 percent cap and the uncertainty it would cause installers and customers. Consumers announced today it intends to voluntarily double the size of the program starting Jan. 1.
“Expanding our DG program’s participation limit to 2 percent of average peak load is an exciting step on Michigan’s journey to a permanent rooftop solar program,” Consumers said in a statement. “Transitioning to a DG model requires regulatory approval and also means we’ve stopped accepting new applications to our successful net metering program, which has reached capacity. Through this voluntary step, we continue to support customers who want to install rooftop solar generation and be paid for excess energy generated.”
An Upper Peninsula utility has previously doubled its original 1 percent program cap because of rooftop solar demand. Consumers filed a letter with the Michigan Public Service Commission on Thursday about its plan to raise the cap after an ongoing Consumers rate case order is issued next month.
Clean energy groups praised the decision while calling on state lawmakers to remove the program caps entirely.
“Today’s decision by Consumers Energy to raise the distributed generation cap to two percent is good news for Michigan families, small businesses and the booming Michigan solar industry,” Michigan Energy Innovation Business Council President Laura Sherman said in a statement. “This commonsense decision will protect Michigan small businesses and jobs in the solar industry and shows the current solar cap is arbitrary, unnecessary and an impediment to job growth.”
Charlotte Jameson, program director for legislative affairs, energy, and drinking water for Michigan Environmental Council, said Consumers’ announcement “should be a wake-up call to state leaders that without action to remove the arbitrary solar cap statewide our burgeoning solar industry will be devastated, jobs will be lost and small businesses will close.”
“The cap is an outdated and unnecessary barrier to Michiganders accessing clean, affordable energy and to Michigan based solar companies having the certainty they need to be successful,” Jameson added. “That’s why we are urging lawmakers to take action to permanently eliminate this burdensome cap instead of relying on voluntary and patchwork commitments from utilities.”