Michigan is looking to redefine itself in the wake of an auto industry collapse that helped propel the state to the top national unemployment rankings. Wisely, Governor Jennifer Granholm and the Michigan legislature have chosen clean energy and green jobs to help revive the Great Lakes State. Homeowners now enjoy nationally competitive solar rebates that are helping to clean Michigan's skies and maintain the beauty of its lush forests and expansive waterways.
In 2008, Michigan enacted its own renewables portfolio standard requiring all utilities to get at least 10 percent of their retail electricity sales from renewable sources or energy efficiency by 2015. Under the law, the state's two biggest investor-owned utilities have additional obligations beyond other utilities. Detroit Edison (DTE Energy) must have 300 megawatts of new renewable energy by 2013 and 600 MW by 2015. Consumers Energy must acquire 200 MW by 2013 and 500 MW by 2015.
RPS requirements have spawned a number of utility-based incentives for solar power throughout the state, led by DTE and Consumers Energy. Following are rebate summaries for those two companies. If you are not a customer of DTE Energy (Detroit Edison) or Consumers Energy, a quick visit to DSIRE.org should answer your questions. The state of Michigan does not offer any direct solar electricity incentives, although there are credits for energy efficiency upgrades and solar water heating.
DTE Energy - Solar Currents Program
DTE Energy offers up to $48,000 in rebates for residential solar power systems at a rate of $2.40 per watt DC. Systems must be designed not to exceed on-site energy needs. Tacked onto the rebate is a production incentive that pays $0.11 per kilowatt-hour (kWh) for renewable energy credits produced by the system over 20 years. Rebates are up-front and paid upon completion of system installation.
Interestingly, existing systems installed between Jan. 1, 2005 and Jan. 1, 2009 are also eligible for rebates, although at a reduced rate. Owners of existing systems must have a valid Detroit Edison Parallel Operating Agreement in order to apply for the rebate. Rebates for existing systems are doled out as follows.
Systems installed during:
Total program budget for the Solar Currents program is $25 million, half of which is expected to go to residential PV systems.
Consumers Energy - Photovoltaic Purchase Tariff
Rather than offer direct rebates, Consumers Energy is experimenting with a feed-in tariff (FIT). Dubbed the Experimental Advanced Renewables Program (EARP), residential solar PV systems were eligible for up to a whopping $0.65/kWh production incentive. Unfortunately, to qualify for that tariff level, the system had to be in place by May 1, 2010, which is now past. However, a still-lucrative purchase tariff of $0.525/kWh of excess solar energy produced is still available. Non-residential systems are eligible for a $0.375/kWh rate. System owners must pay a monthly charge to the utility to cover metering costs.
Eligible PV systems must not be located on property used for commercial purposes, including rental properties, warehouses, workshops and office buildings. Tax exempt entities and third-party-owned residences are also not allowed to participate.
NOTE: The program limit is set at 2 megawatts, and Consumers Energy has already received applications for over 6 megawatts of PV capacity. However, they are still accepting applications, but new applicants are put in line on a waiting list should new funding become available due to project failures or application withdrawals. And perhaps Consumers Energy will note the success of their experimental program and allocate more funding to meet state renewable energy mandates.
Again, if you are not a customer of Michigan's two largest utilities, see the Database of State Incentives for Renewables and Efficiency (DSIRE) for more specific information.
Michigan Residential Energy-Efficient Appliance Rebate Program (Heating and Water Heating)
The state of Michigan offers a rebate for solar water heaters - up to $1,200 or 20% of total cost, whichever is less. The program will be available until stimulus funding given to Michigan by the federal government ($8.82 million, including a separate program for energy efficient appliances) is exhausted. In order to qualify, equipment must be purchased on or after February 1, 2010 and meet certain minimum energy efficiency requirements. Appliances, including solar water heaters, must replace an existing appliance, meaning that water heaters installed on new homes are not eligible.
For more information on the rebate program, visit Michigan Energy Options online or call 1-888-MICHNRG (1-888-642-4674).
Net Metering
Michigan has also enacted net metering laws to ensure that interconnection between utility and solar system owner is fair. The law applies to rate-regulated utilities (including investor-owned utilities like DTE Energy) and alternative electric suppliers. Utilities may opt for "member regulation" with the Public Service Commission and would not necessarily be susceptible to state net metering laws, although only two utilities in the entire state have so far. Municipal utilities are NOT regulated by the PSC.
Systems up to 20 kW in size are eligible for "true" net metering. Systems between 20 and 150 kW are eligible for "modified" net metering. For true net metered systems, less than 20 kW net excess generation (NEG) is carried forward to the next billing cycle at the retail rate. Modified net metering sees NEG carried over at the power supply component of the retail rate (similar to the utility's avoided-cost rate).
Net metering law does not specify an annual reconciliation period, meaning that the NEG may carried over indefinitely. The aggregate capacity limit on Michigan's net metering law is set at 0.75% of a utility's peak load from the previous year. True net metering is intended to account for 0.5% of peak load, while modified metering may reach an additional 0.25%. For more information see Michigan.gov/netmetering.
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