You have about 6 months to go solar in West Michigan before it gets less advantageous for the foreseeable future.
And if you use most of your electricity at night or in the winter, it will get a lot less advantageous. It’s truly as simple as that. Here’s why:
With solar power adoption growing at an exponential rate around the country, non-utility solar installation laws are in flux everywhere. In the final hours of 2019, over one-hundred environmental advocates, solar customers, solar installers and contractors in Boise Idaho attended the final public comment meeting of the year for the Public Utilities Commission. The local utility Idaho Power had new rates proposed regarding the price point at which existing and future solar customers could sell their energy back to the grid (“net-metering”). These changes would NOT make it more beneficial to go solar by any metric. Quite the opposite.
The meeting did not end until almost a hundred public comments later and after 2am in the morning. The aftermath of that meeting was a hold placed on the planned net-metering changes the utility was assumed to have in place and functioning by January 1st of 2020. A victory for solar power advocates, if not a temporary one.
My friends run a branch of Altenergy Incorporated there in Boise Idaho. That’s why I’m so familiar with this story. But I was curious to see how it was about to impact them not just because I’ve worked there and lived there myself, not just because I helm a branch of that same company here in Grand Rapids, but mostly because we are mere months away from the same fate here in West Michigan.
If you want to read about what’s in store, all you have to do is google “Michigan Solar Tariffs”, or “Detroit solar rate changes”, or you could just read this nice recap from the Great Lakes Renewable Energy Association. Because this law has already passed here in Michigan. It’s already in effect for DTE customers. It just hasn’t taken effect in West Michigan yet due to some advantageous timing with our utilitie’s rate-case schedule (Consumers Energy).
If you didn’t click the link or do your own google, here’s my quick breakdown:
Every 2 years or so Consumers Energy proposes and gets approval from The Public Service Commission for it’s new electric rates for all customers (“rate case”). The last time they did this was right before the new law had gone into effect after being passed in December of 2016 by then Governor Snyder (in a lame-duck session, none-the-less). This new law authorized the electric utilities to change the buy-back procedure for how net-metering has historically worked in Michigan.
At present for Consumers Energy customers, if you generate more electricity than you are using and send some electricity back to the grid during the day-time, but then use electricity from the grid at night when you are not producing electricity, what you sent back to the grid 100% offsets the cost of what you took from the grid at that later time. Energy-fee, delivery-fee and all. Which is about 14 cents per killowatt-hour for the average residential customer in West Michigan. And this is only tabulated on a monthly basis when you get your bill. So if you sent 130kwh of electricity back to the grid in the month of August, but you only used 96kwh of electricity from the grid in that time, you not only do not get charged anything for those 96 killowatt-hours, you would also bank 34kwh worth of net-metering credits.
So now, later this year, our next Consumers Energy rate-plan will likely mirror what has already been approved by the Public Service Commision and gone into effect for DTE customers around the rest of the state. Under the new law and rate-plan, when they generate more electricity than they are using during the daytime hours and send back to the grid, they are only being credited for the energy-fee and at a lower rate of 7.44 cents. And to make it worse, this is being tabulated not monthly, but live. Second by second. This will be a pretty dramatic change in return-on-investment for anyone considering solar and not consuming a majority of their electricity during the daytime hours.
But if you get solar installed before this goes into effect in late 2020, you are grandfathered in under the current 1:1 net metering for 10 years. Which is about the length of time necessary to get your entire return on investment as a residential customer. About twice as long as necessary to earn your returns on a commercial depreciable solar investment.
So that’s why I’ve hit you with my sensationalized headline; because (I have an evident solar-leaning bias) if you are smart, you have six months to go solar in West Michigan!
Written by Chad Becker, the current Branch Manager for Altenergy Inc. Grand Rapids. A Michigan State Spartan, who grew up in Jenison Michigan, and is a current resident of Walker, Michigan.
*All of the details mentioned for residential and small commercial projects was in accordance with current Tier 1 Solar Array sizing by Consumers Energy. Those are arrays sized 20kw and below.
is a thirty-something guy who hasn't been able to look away from politics since 2010. Around the time he got tired of staring at religion.