- January 3, 2018
- Posted by: EJ Joier
- Category: Business Development
Solar energy projects up in 2016 and projected to rise in 2017
Pending state regulations and federal policies could dampen solar in 2018
Michigan Public Service Commission to establish this year on new tariff to replace popular net metering project
Private, non-utility-owned renewable energy production led by residential and business solar electricity generation grew by 28 percent in 2016 and was expected to continue at that pace in 2017, the Michigan Public Service Commission said in a new report.
It is unclear whether that growth in residential, commercial and industry solar projects will continue in 2018, given Michigan energy legislation approved in 2016 that has eliminated the popular net metering program for future customers. Net metering allows customers with solar panels or wind turbines to receive a credit for excess electricity they produce.
Michigan’s new energy law requires the MPSC to establish a distributed generation program and tariff to replace the current net metering program. Existing net metering customers can continue to participate in the program for 10 years. The MPSC is expected to set a tariff later this year in a hearing.
Liesl Clark, co-founder of Lakes Energy and president of the Michigan Energy Innovation Business Council, told Crain’s that the success of net metering, better renewable energy technology and lower solar costs have stimulated solar and wind in Michigan and elsewhere.
Clark said Congress and the Trump administration have introduced uncertainties for solar in 2018 because of the phase-out of a solar tax credit and an ongoing trade case that could increase solar costs.
But pending Michigan regulations on a distributed generation tariff could also muddy the waters for solar.
“The transition from a simple, understood structure like net metering to the distributed generation tariff will be a large impact on the solar deployments in Michigan in 2018,” Clark said.
MPSC staff issued a draft report on the tariff and asked for comments by Jan. 10.
“The process will play out in early 2018 culminating in the utilities adopting the new MPSC determined distributed generation tariff in their next rate cases,” Clark said. “Once the tariff is in place, it will be even more clear that there is no need for caps on the residential solar program.”
Clark said future solar growth depends on how high the MPSC sets the tariff. If utilities are charged fairly and reimbursement to customers is fair, she said there might be little impact on solar.
Solar growth in Michigan
In 2016, 2,582 residential, commercial and industrial customers participated in Michigan’s net metering program, up 427 from 2015, said the MPSC’s net metering and solar program report. Total capacity of net metering installations was approximately 21,888 kilowatts, an increase of 28 percent from 2015. Solar accounts for less than 2 percent of total electricity production in the state.
By the end of 2017, the MPSC estimates the total amount of solar installed in Michigan will increase to 120,530 KW, more than double the amount of 57,999 kKW in 2016 and 36,118 KW in 2015. The vast majority of solar power in Michigan is owned by utilities that are complying with state law that mandates they generate 15 percent of sales from renewable energy by 2021.
A report issued last year by the Solar Energy Industries Association said Michigan has installed the 11th-highest amount of solar megawatts in the nation during the second quarter of 2017. Michigan trails leaders California, Massachusetts and New York. Overall, Michigan has more 102 megawatts of total solar installed, mostly from utility-scale projects.
More than 92,000 people now work in the clean energy industry in Michigan, which ranks third among 11 Midwest states in clean energy employment.
Southeast Michigan, including Wayne, Oakland and Washtenaw counties, has the most net metering customers.
Solar projects in Michigan
Two of DTE’s biggest solar projects came online this spring: Demille Solar Farm (28.4 MW) and Turill Solar Farm (19.4 megawatts), both in Lapeer.
Several large companies in Michigan have gone solar including Ford Motor Co. and IKEA. IKEA has installed one of the largest such installations at its location in Canton — 1.28 megawatts. Ford World Headquarters also has a 1 megawatt solar power project.
Last year, Michigan State University built five solar carports that are expected to generate more than 15,000 megawatt hours of power per year. In 2016, DTE opened a 900 kilowatt solar array at a GM plant in Warren. DTE has 28 operational solar panel arrays, generating more than 15 megawatts of electricity.
Total solar megawatt growth in Michigan is estimated to growth from 15.9 megawatts in 2016 to 144.6 megawatts in 2022. Residential solar installations is expected to grow from 3.2 megawatts in 2017 to 25 megawatts in 2021. Commercial and community solar is expected to grow from 10 megawatts in 2017 to 35 megawatts in 2021. But utility solar installations are expected to peak at about 87.3 megawatts in 2017 and slowly decline each year to 70.1 megawatts in 2021.