*This colum originally appeared in the July 6, 2014, issue of Crain's Detroit Business
|MLUI Senior Policy Specialist Jim Dulzo|
What if a profitable monopoly with an unshakable grip on its customers refused all pleas to establish a program that, cost free, would create lots of good jobs in Michigan and aid the rise of a crucial global industry here?
That’s Michigan’s situation, thanks to DTE Energy and Consumers Energy’s regrettable reluctance to renew and expand their rooftop solar programs, which help residential and business customers install panels by paying them fair rates for the electricity they generate.
Five years ago both firms launched solar “pilots” to help customers install modest solar systems and earn their investments back in six or seven years, rather than the dozen or more it takes under Michigan’s basic “net metering” law, the minimum standard.
DTE’s SolarCurrents and Consumers Experimental Advanced Renewables Program stirred such a stampede of applicants that they had to hold drawings.
Now the companies, particularly DTE, want to crash their pilots and drop rooftop solar, significantly harming the state’s solar installers, as well as businesses’ ability to invest in panels and cut their power bills.
Their argument: It’s unfair to penalize customers who don’t have solar panels by raising their rates to pay for more solar incentives.
This is nonsense.
First, while the replacements for the pilots that state regulators are contemplating (after leading four months of Solar Working Group deliberations) are 10 times larger than the originals, they remain tiny—less than 0.2 percent of either company’s capacity. Even if panel owners were paid three times the retail rate—a ridiculous idea—the effect on bills would be nearly undetectable.
Second, the idea that solar panels benefit only the owner of the panels is false. Distributed generation diversifies power sources, protects against spikes in fossil fuel prices, and leads to a more reliable, resilient grid. That benefits everyone.
Finally, because Michigan wind power turned out to be far cheaper than either utility predicted, both have millions of unspent dollars in their renewable energy accounts. That could finance most, and likely all, of an expanded program.
What would expanded rooftop solar produce? Jobs, jobs, jobs—most immediately among installers, that hardy band struggling to advance solar in Michigan even as Minnesota, Illinois, Indiana, and Ohio roar past us, thanks to their pro-solar policies.
A solar trade associate counts 143,000 people in the business nationally, but only about 3,000 in Michigan. Most of our solar jobs are in making solar cells and fabricating panels, a tribute to our manufacturing prowess even without a home market.
But a steady rooftop expansion would give Michigan high-tech, solar manufacturers like Dow Chemical and Hemlock Semiconductor, and dozens of assemblers around the state, room to grow. The installation sector would scale up dramatically. It would become more efficient, and cut costs, as installers do in strong solar states. Panels’ electricity would help cut the purchase of very pricey peak power for our air conditioners on hot, sunny days, and reduce the need for costly new power-producing and -transporting infrastructure.
When a new program expired in, say, three years, where would we be?
Given the track records so far, we’d be in a great place. In 2009, when Michigan’s renewables law kicked in, small-scale rooftop solar could be installed here for about $7.50 per watt. Today it’s under $4, a nearly 50-percent decline.
We cannot allow two state-regulated monopolies to frustrate the emergence of a globally competitive, prosperous solar industry in Michigan. It’s time for DTE and Consumers to cooperate eagerly, not grudgingly, with their customers’ clear desire—and the state’s urgent need—to “go solar,” particularly when an expanded, next-step program would cost ratepayers virtually nothing, further lower installation costs, and help protect our air, water, and climate.
Jim Dulzo participated in the Michigan Public Service Commission’s Solar Working Group, and is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at email@example.com.