May 04, 2014 8:00 AM
State group expected to suggest solar growth; will utilities comply?
A solar power work group in Michigan is making progress discussing the possibility of expanding the current utility-sponsored solar incentive program for customers and whether to recommend establishing a community solar program, say participants in the Michigan Public Service Commission-led group.
By most accounts, the group is expected to recommend an expansion of the existing solar power programs offered by DTE Energy Co. and Consumers Energy Co. and to embark on a community solar program in which customers, investors or utilities invest in a large solar panel array and share power generation and cost savings.
But the real question is whether DTE and Consumers will voluntarily expand their programs -- as environmentalists, manufacturers and solar installers have been asking the state to require for job creation and public health reasons -- before the programs expire in 2015.
In 2009, when Michigan's renewable energy and efficiency legislation (Public Act 295) went into effect, DTE began developing its SolarCurrents program and Consumers had its Experimental Advanced Renewable Program. Both programs provide financial incentives for residential and business customers to build and install photovoltaic systems.
DTE officials said the utility plans to produce nearly 2 percent of its 10 percent renewable energy required production from solar through its company-owned plants and residential and business programs. Consumers plans to produce 0.7 percent from its residential and business-only program, the company said.
State legislators have begun hearings on extending Michigan's renewable energy law.
Michigan Gov. Rick Snyder has said he would support legislation increasing the state's 10 percent renewable energy mandate to possibly 20 percent over 10 years. He has not specifically addressed solar power other than to say that increasing Michigan-based renewable energy jobs is an important byproduct of his plan.
Last year, the Public Service Commission approved DTE's two-year renewable energy plan. However, it ordered the Detroit-based utility to participate in the work group. Jackson-based Consumers Energy, which is awaiting a hearing on its next renewable energy plan, voluntarily agreed to participate.
Julie Baldwin, the commission's renewable energy section manager, said the work group's conclusions will not bind the utilities into changing their renewable energy plans, which are approved by the Public Service Commission.
"Most people have a concern that DTE's SolarCurrents program has not been big enough," Baldwin said. "When DTE makes solar capacity available, they have more people apply to participate than they have capacity. There have been suggestions to make the program larger."
A draft of the work group's report, which some group members say has begun, is expected to be completed by mid-June, when comments will be accepted. A final report will be released in July, Baldwin said.
Under the commission's DTE order last year, the work group is charged with determining ways to "improve DTE Electric's customer-owned SolarCurrents program, including means for incorporating community solar into the program."
Baldwin said the group is discussing three ways to design a community solar program. Consumers and DTE could voluntarily fund company-owned community solar projects; customers could invest in a joint solar panel project; or a third-party company could create a community solar project, take customer investments and sell solar energy to DTE or Consumers, she said.
David Harwood, DTE's director of renewable energy, said DTE has been supportive of the work group, and its five meetings so far have been productive.
"A lot of stakeholders just want more solar, but they don't have the background to understand how rates are developed with the Public Service Commission," said Harwood, who is a work group member.
Harwood said the group's charge to improve DTE's SolarCurrents "doesn't mean increase" the company's solar pilot program. He said the work group is trying to "figure out ways to make the program more efficient, fair or accessible."
Harwood said DTE fully intends to hit its 10 percent renewable goal by 2015. He said DTE is currently at 9.5 percent renewable production.
But Brad Klein, senior attorney with Chicago-based Environmental Law & Policy Center, who is a member of the work group, said DTE has accumulated $15 million in customer fees from its renewable energy surcharge that could be used to expand its SolarCurrents program.
"I'd like (the work group report) to make a strong recommendation that utilities take immediate steps to expand and improve their solar programs using monies they have already collected to support renewable energy in Michigan," Klein said.
Baldwin said prices have dropped for solar panel installation to less than $4 per watt from more than $10 per watt.
"DTE and Consumers can allocate that money to making more solar rebates available to customers," Klein said. "The money can be used to more cost-effectively fund the program. Right now, (solar installation) companies have to spend a lot of money helping customers get the incentives."
Baldwin said several solar installers told the work group that DTE's lottery system -- which the utility uses to narrow down the number of customers for its SolarCurrents program -- makes it very difficult for them to do business.
"We are hoping to improve on this," Baldwin said. "The installers spend a lot of time working with customers, answering questions, filling out the application, only to find out one or two months later were picked. Sometimes customers lose interest and drop out."
Doug Jester, a principal with 5 Lakes Energy LLC, a Lansing-based energy consulting firm, said the work group also has discussed future ways to analyze the value of solar from a price, quality-of-life and job-creation standpoint.
"The discussions (also) have focused on ... how to change the utility solar programs to get rid of the lotteries and other things that prevent customers from doing solar," Jester said.
Jester agreed that the success of the work group hinges on whether the utilities put the recommendations into action.
"We won't know whether they are actually going to do anything differently until some uncertain time after the staff report is finished," Jester said. "I remain cautiously optimistic that this will be modestly productive, but don't expect anything revolutionary."
Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene
