A proposed new grid charge leveled at small solar and wind projects in legislation on the Michigan Senate floor could derail growth in the state’s net metering program that incentivizes clean energy produced by homeowners and small businesses.
Despite some changes in Michigan Senate Bills 437 and 438 — primarily sections that govern net metering program rules — businesses in the state’s small solar and wind industry say the proposed bill package could reverse more than eight years of growth in net metering by discouraging investment in small projects.
Under SB 437, the Michigan Public Service Commission would be empowered to set a “fair and equitable grid charge to apply to customers who participated in a net metering or distributed generation program.”
“If the grid access fee is comparable to what other states have done (about $5 per month), there would be a slight impact. The bill doesn’t put a cap on the fee. If it is high, it could have a substantial impact on net metering and solar.” – Mark Hagerty, president of Michigan Solar Solutions in Commerce Township
The proposed bill, which is sponsored by Sen. Mike Nofs, R-Battle Creek, would likely require the MPSC to hold a contested hearing before an administrative judge who would hear testimony from all sides about a grid charge. The judge would then make a recommendation to the MPSC, which the commission could accept, reject or modify in an order, said MPSC spokeswoman Judy Palnau.
Last week, Nofs distributed draft four of SB 437 S-6 to the Republican caucus. Spokesman Greg Moore told Crain’s that while Nofs wanted to hold a vote on SBs 437 and 438, which is sponsored by Sen. John Proos, R-St. Joseph, a vote on the energy package likely will be held sometime in October.
Mark Hagerty, president of Michigan Solar Solutions in Commerce Township, said his business could be adversely affected if the grid charge was too high and discouraged customers from investing $10,000 to $20,000 in a rooftop solar project.
“If the grid access fee is comparable to what other states have done (about $5 per month), there would be a slight impact,” Hagerty said. “The bill doesn’t put a cap on the fee. If it is high, it could have a substantial impact on net metering and solar.”
While Hagerty said his business is up 40 percent over last year with about 55 projects, several customers have already backed away from rooftop solar installations because of talk of changing the law. He said the vast majority of system installations are solar projects approved for net metering.
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