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Michigan Utility Proposes Pilot Solar Tariff

By Paul Gipe, Contributing Writer
February 26, 2009 | 6 Comments

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Michigan, United States [RenewableEnergyWorld.com] Consumers Energy, one of Michigan's principle investor-owned electric utilities, has filed a petition with the Michigan Public Service Commission that contains a proposed "pilot" feed-in tariff for solar PV.

The filing is the utility's formal response to the state's recently passed RPS.

The proposal far exceeds that of Wisconsin utilities that currently operate limited feed-in tariffs, but pales in comparison to that being implemented by Gainesville Regional Utilities, a small municipal utility in Florida.

Gainesville's policy is not a pilot program and the utility will begin accepting contracts March 1st.

Unlike the policies in Wisconsin, the Consumer Energy proposal is only for solar PV and does not include other renewables.

And unlike the program in Gainesville, Consumer Energy is offering a maximum contract length of 12 instead of 20 years.

While the proposed 2009 tariffs seem lucrative in comparison to those in Gainesville, the 2010 tariffs are in line with those that would be necessary for sites in Michigan with 20-year contracts. The 12-year contracts are problematic. Consumers Energy also proposed a total program cap of 2 MW. Such a small program will reach no more than 500 homes.

In contrast, Gainesville has a "soft cap" of 4 MW per year and expects to sign half that number in the first few weeks of the program.

Further, some consider Consumers Energy proposed monthly fee of $25 per month too steep, especially for residential participants.

Elements of Consumers Energy Proposed pilot program

Solar PV only
Program cap 2 MW (500 kW reserved for residential customers) (Not an annual cap but a total program cap)
Project cap 150 kW
Project minimum: commercial 20 kW, residential 1 kW
50%-60% Michigan Content Requirement (can be labor added)
12 year contracts
$25/month service charge
2009 Tariffs
- Residential: $0.65/kWh
- Commercial: $0.45/kWh
2010 Tariffs
- Residential: $0.525/kWh
- Commercial: $0.375/kWh

For details see, http://efile.mpsc.cis.state.mi.us/efile/docs/15805/0024.pdf, pages 9, 26-28, 232-234 and 242.

Solar Energy

6 Reader Comments

Comment
1 of 6

franklin-blackstone-162329

February 27, 2009

It is not clear to me but it sounds like local goverments in Flordia, Wisconsin and Michigan are going to charge cutomers if they produce solar electricity and feed it into the grid. Please tell me I am wrong.

Comment
2 of 6

douglas-schapero-51682

February 28, 2009

It does sound pretty misguided. Can somebody explain this in plain speak, without assuming the reader has background knowledge on the topic?

Comment
3 of 6

michael-miller-44813

February 28, 2009

No, a feed in tariff is where you (home owner) get paid a premium to feed power from PV (in this case) to the grid. The only charge to you is the $25 a month. The utility company will own the renewable energy credits (RECs) through this process.This helps the utility to meet there goal of 10% renewable energy by 2015. got it?

Comment
4 of 6

douglas-schapero-51682

March 1, 2009

I'm glad the home owner can help the utility company acquire the RECs and a sustainable energy source...

But why is the home owner charged to sell his/her excess energy to the grid? It's explained as service charge..., but what service?

Do you see a "service" tariff of $25 as a disincentive to the adoption of distributed energy by homeowners?

Comment
5 of 6

aj-berres-172649

March 6, 2009

Michael Miller is correct on the basic concept.

The $25 dollars per month service charge does seem to be rediculous. Through all of these solar incentives enacted by the government, consumers are going to be charged in one way or another to help the utilities cover their extra costs, so the $25 is not necessary.

After tax credits and incentives on both the federal and state level, some consumers who think this through will be able to benefit financially in the short term, while satisfying their duty to be green...

Comment
6 of 6

mark-hughes-148073

May 13, 2009

I agree, the $25 is ridiculous. I have at my home installed CFL's throughout and made family lifestyle changes to conserve energy. It makes me crazy to see that a large part of my existing monthly bill is "fees". I pay currently a fee for the green energy that Consumers Energy has given me the "privilege" to use. It represents about 13% of my entire bill.
At a time when we need to move the Michigan economy forward with alternative energy this plan presents itself as a half step, CYA approach by the uitlity company. This kind of plan cannot be implemented as a "proposal" but rather mandated by laws. And it should be done in a consistant manner that reflects the acquired intelligence of the industry.

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paul gipe

About: Paul Gipe has written extensively about renewable energy for both the popular and trade press. He has also lectured widely on wind energy and how to minimize it... more »