By Mike Buza
This is the second of a three-part series on clean energy legislation in Michigan. The first part described clean energy bills passed last fall, the benefits, and what was done to pass them. This article talks about the clean energy bills that were introduced and have not been passed to this point. It talks about how these proposed bills would strengthen the Michigan grid for the future and support low-income people. The final article is suggestions for future clean energy legislation.
There have been some tremendous clean energy legislative strides achieved recently by the Michigan legislature. Despite these advances, our work is not done. There are clean energy bills that have been introduced but have yet to be passed by the legislature. One of the areas that has received a lot of buzz among environmental stakeholders is community solar (SB 152-153 and HB 4464-4465).
Community Solar: Community solar is an essential part of the transition to clean, renewable energy, holding big utilities accountable, improving the reliability of our electric grid, and addressing the many barriers preventing low-income and multi-family households from adopting solar. Community solar is where someone can buy or lease solar panels from an array away from their home. The panels owned or leased by a household are metered, and the electricity produced is deducted from their bill. These bills would allow people who can’t afford the significant up-front costs, who are renting, have shaded rooftops or don’t qualify for standard financing solutions to participate in solar.
Surprisingly, this bill package did not get more attention from the legislature. Introduced as a bipartisan bill package (SB 152-153 and HB 4464-4465) in both the Michigan Senate and House. Michigan legislators introduce bipartisan bill package to enable community solar – Planet Detroit SB 153 and HB 4464 require “not less than 30% of the electricity produced by a community solar facility to go to low-income households or low-income service providers.” 2023-SIB-0153.pdf (mi.gov). While HB 4464 mirrors SB 153, it includes additional language to ensure the state takes full advantage of federal clean energy funding.
One of the challenges in passing the clean energy bills in the last legislative session is that bills were passed along strictly partisan lines. There is hope that since the community solar bills were introduced bipartisanly, they would receive support from both parties.
These bills address the issue of access to community solar and provide a 30% carve-out of these facilities for low-income households. However, they do not address some of the financial barriers low-income households face in adopting solar. Other bills were introduced to deal with those issues and will be discussed later in this article.
Community Solar State Policies and Economic Benefits
Storage: Under the newly passed clean energy and climate bill package, our state made great strides in energy storage. Each regulated utility and alternative electric supplier will have to either construct or acquire eligible energy storage systems or enter into eligible energy storage contracts to meet its share of a statewide energy storage mandate of a combined capacity of at least 2,500 megawatts. But this only deals with utility-scale storage, not consumer storage.
In the spring of 2021, several stakeholders joined the Council on Climate Solutions, tasked with developing the MI Healthy Climate Plan. (The author was part of the workgroup called Energy, Production, Distribution, Transmission, and Storage.) A document from that group addressed “behind the meter storage,” referring to electrical assets, such as batteries and solar panels on the consumer side of the meter. One of the suggestions was to enact legislation mimicking a Vermont program used by the utility Green Mountain Power.
Green Mountain Power subsidizes the purchase of home batteries. In return, they can access the power in these batteries 5 to 8 times a month during peak power demands of the grid. The utility endeavors to ensure your battery is fully charged in the event of a power outage. The program aims to ensure grid reliability during peak demand times and reduce the need to build out additional costly grid infrastructure. This has reduced the cost of electricity for all customers, something that Michigan should do. It also provides backup power to the owners in case of power outages.
Michigan has introduced bills (HB 4839-4840) that would achieve some of the same grid benefits that the Green Mountain power program does and more. HB 4839 allows a group of individuals to aggregate their production and/or storage into a virtual power plant and sell their electricity to utilities. HB 4840 has a provision for subsidies to people adding solar and/or storage to their homes and businesses. It provides additional subsidies to lower-income households to enable more households to participate. HB 4840 provides for a third-party intermediary so the utility cannot take control of your solar production.
The biggest challenge currently is transitioning to a variable green energy source and having a grid that can handle expanding needs. The current grid and licensing system have been built for big centralized energy factories. The rapid recent growth of solar and wind farms has challenged the grid’s interconnection ability in a timely and cost-effective manner. The demand for electricity has been relatively flat for the last couple of decades. Efficiency gains covered the modest growth there has been. The recent growth of data centers has increased the electricity demand. The future addition of electric cars and increased electrification of buildings will dramatically change the calculus.
Behind-the-meter storage and solar energy production can help delay the building of new grid infrastructure and thus lower costs. Thousands of behind-the-meter batteries and solar panels can act as a virtual power plant. This would replace dirty, inefficient gas peaker plants. The cost of electricity can vary widely in a short period, and electricity is being arbitraged all of the time. The use of aggregate behind-the-meter energy storage and solar production can be arbitraged and lower the energy cost for those who participate. HB 4840, which provides subsidies for lower-income people, can help them participate in the electricity market and make energy more affordable. Storage can also help stabilize the grid against variable demand and production. It can also help during severe weather that results in power outages. These solutions have lowered the costs for all consumers in the states that have implemented them.
The investor-owned utilities (IOUs) will fight these bills. The simple reason is that they can potentially cut into their business. Although the primary job of the utilities is supposed to be to provide reliable electricity, the IOU’s loyalties lie with their investors. The legislature must decide if their primary interests lie with the IOUs or constituents. In November, Michigan passed a slate of energy bills that will make it one of the leaders in clean energy in the US. If they pass the additional bills above, they can lead a clean energy revolution.
Questions or comments about this article can be directed to Mike Buza at theoriginalzuba@yahoo.com