If you like clean energy, you won't like the two energy bills the Michigan Senate Energy & Technology Committee sent to the floor on May 25. And you really won't like them if you want more competition among utilities, more renewable energy from your utility, and the freedom to make solar energy on your property.
It's bad enough that state Sens. Mike Nofs' (R-Battle Creek) and John Proos' (R-St. Joseph) SB 437 and SB 438 make it even more difficult for others to compete with our electric utilities; torpedo the successful standards that required Michigan utilities to supply more clean, renewable energy and money-saving efficiency programs; and mess with English by redefining "clean" as "whatever meets federal emission standards," and "renewable" as "burning trash."
But these bills — essentially utility wish-lists — also attack the little guys: the hundreds of Michigan workers who, using the state's current net metering law, wire up homes and businesses with solar panels. SB 438 will put many of them out of business and nip Michigan's nascent rooftop solar boom by slashing what a utility must pay a solar customer for the extra electricity his panels put on the grid.
The utility rationale for doing this comes straight from the attack politics handbook: Describe rooftop solar owners as unfair people who don't pay the utility much, if anything, for their electricity, even though they depend on it when the sun's down. Utilities allege that panel owners are forcing others to subsidize them and harming poor people. Those solar owners are such subsidy hogs!
Some lawmakers buy this argument because it's slightly complicated and utilities, always so generous with certain lawmakers around election time, push it hard.
Should solarized homeowners pay something for using utility lines? Perhaps. But these bills are not about that; they aim to kill a still-small Michigan industry before it can properly defend itself from state-sanctioned monopolies' spurious claims. Some claims require technical rebuttals, but here are some basics:
First, panel owners' excess solar power, purchased by the utility at retail, instantly goes to the neighbors next door, who pay that exact price, even though the utility didn't generate it and has no real distribution or other additional costs for it. Under SB 438, utilities can double their money on your extra solar power.
Second, rooftop panels cut costly "peaker" power plants use on hot days, as well as expensive neighborhood utility substation expansions, since solar slashes peak demand. Solar also eliminates costly power line losses, hedges volatile fossil fuel costs, and cuts pollution.
These are worth real dollars to utilities, but most refuse to recognize that. In fact, of 11 recent, deep-dive studies of exactly what rooftop solar is worth, just three — all utility-sponsored — set it at what SB 438 suggests: below retail. The others, by public service commissions, energy engineering firms, and advocacy groups, find solar worth at least retail.
But here's the real story: Today, with rooftop solar accounting for about .02 percent of the state's electricity, the effect of making all customers cover the loss of revenue from panel power production works out to about 2 cents per customer, per month.
But arriving at even that tiny sum ignores that the panels are cutting the utility's generation costs.
So: Does saving customers less than a quarter on their annual bill — or likely nothing at all — justify killing many of the 1,800 direct and indirect Michigan installer jobs tallied by the Solar Foundation? Does it make sense when there's potential for so many more such jobs? States with positive solar policies are growing solar jobs 12 times faster than overall job growth.
The solar "subsidy" SB 437 addresses is a big deal only because utilities and fossil fuel interests spend heavily to make it one. All electric rates are crawling with subsidies; utilities simply want to make sure that, if you ever get panels, they, not you, own them.
SM 437 and 438 pack bad news for many people — from school systems needing a break on their utility bills, to local industries eager for stronger local markets for their renewable equipment manufacturing, to families wanting help cutting energy use, to solar installers who've come so far in making their product affordable and reliable. These bills, as written, make Michigan a follower, not a leader, in the national and global clean, renewable, energy revolution. They must be thoroughly amended, or they should be defeated.
Jim Dulzo is the Groundwork Center’s senior energy policy specialist. Reach him at firstname.lastname@example.org.