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By Michael Symonds --

Solar panels on a farm near Faribault, MN in August 2021. The land was leased by the farm for use by a "community solar" garden.

A pair of bills in the Michigan Senate has drawn fierce opposition from utilities such as Consumers Energy.

Republican state Senator Ed McBroom is one of two Michigan lawmakers behind bills that aim to boost solar energy in Michigan.

“It's kind of a, to me, a no-brainer all the way around,” McBroom said of the "community solar" proposal.

“It's good for the environment. It's good for my citizens’ pocketbooks. And so, it's something that I've been a long supporter of."

McBroom said the legislation would make it easier for Michiganders to get some of their energy from solar farms that don’t belong to big utilities. The bills are all but dead this legislative session. But McBroom, whose district covers most of the Upper Peninsula, said he intends to bring them back.

If he does, they are likely to continue to face opposition from Michigan's biggest electric utilities. Consumers Energy and DTE say the bills are a bad deal for many reasons. But a close look at their arguments reveals that they are built on shaky foundations.

Community Solar

McBroom introduced the bills alongside Democratic state Senator Jeff Irwin of Ann Arbor.

“The way community solar works is you can subscribe to a community solar array that’s not on your property and have the energy generated at that project be credited to your bill," Irwin told participants in a March virtual event organized by the Kalamazoo Climate Crisis Coalition.

Irwin added that the legislation would also expand access to solar.

“It's really crucial for renters, or for people who live in very tree-covered areas that don't get good sunlight, to be able to participate in our clean energy future.”

The bills are also endorsed by climate activists such as Mary Ann Renz, with the Kalamazoo chapter of the Citizens’ Climate Lobby.

“We really need to reduce our greenhouse gas emissions as quickly as possible. And this is one way to do that," Renz said.

So, what’s not to like?

“The opposition has come from the major utilities who want their shareholders to get as much income as possible, and I understand that,” she added.

The case against community solar

Four utilities, including Consumers Energy and DTE, oppose the Michigan community solar bills. So do four business associations and two unions.

When the bills had a hearing in June, the opponents signed a letter detailing their objections. It claims that community solar would be unregulated in Michigan, that the bills are unnecessary and anti-union, and that they would cost ratepayers money.

But how well do these claims hold up?

State Senator Ed McBroom said the bills require the Michigan Public Service Commission to create rules for community solar facilities. He scoffed at the notion that they would be "unregulated."

“I don't see how that is even worth a giggle,” McBroom said.

The utilities and their allies also say Michigan just doesn’t need a community solar bill, for two reasons.

First, they say Michigan’s utilities already have community solar-type projects, like Consumers Energy’s Solar Gardens program.

Like community solar, Solar Gardens subscribers receive credits on their bills.

Portage climate activist Rick Freiman is one of the subscribers.

“They present it as community solar. And to a great degree, it is the same," he said.

But while there is a credit, there’s also a cost. And for customers such as Freiman, so far, the cost has exceeded the credit. He said participating in Consumers’ Solar Gardens program is running him about $50 a month.

Community solar is supposed to lower subscribers’ bills, which is why Freiman supports the proposal in the Michigan Senate.

“A lower cost will create the incentive," Freiman said, to participate in community solar. “Especially if it's lower cost than something else you're already paying.”

"Unnecessary"

The utilities also say the bill is unnecessary because, after all, there’s no law in Michigan that stops you from opening third-party solar farms.

Jeremy Chapman is with MeLink Solar Development, a company that helps other companies set up solar farms.

Chapman said without a community solar bill, the utilities that control the grid get to decide how much that energy is worth, and therefore how much of a credit you get on your bill. The more it’s worth, the more you save.

“What's being said by the utilities is, it's not very much value, so projects can't happen because the numbers don't work, frankly.”

Supporters of community solar say it's no surprise that companies like Consumers Energy don’t assign much value to third-party solar energy. After all, the more it succeeds, the more it takes business away from the utilities. Why, they say, would you let a competitor set the price of your product?

The labor issue

The International Brotherhood of Electrical Workers was one of two unions that signed the letter against community solar.

Jonathan Current, with the Kalamazoo branch of the IBEW, said the bill lacks labor protections, such as a mandated prevailing wage.

“We don't want to create new market spaces where predatory — or businesses that can come in and exploit labor in that sort of absence of regulations," he said.

Current added that if these protections were added, he could see the IBEW supporting the legislation.

“The IBEW has always been for any sort of energy infrastructure and diversity.”

But while wage and other union protections don’t explicitly appear in the bill, they will still be a part of solar development in Michigan, according to Jeremy Chapman with MeLink Solar.

He said that under the Inflation Reduction Act, solar developers are required to pay a prevailing wage and offer apprenticeships to gain access to a 30% tax credit.

If they don’t, the tax credit drops to 6%.

And since building solar farms isn’t exactly cheap, Chapman said those tax credits are a big draw.

“If there was enough union electricians to do these projects in a community-share solar, then I'm pretty sure they're going to get lots of opportunities to work on these projects," he said.

Will it raise your bill?

Finally, there’s this question: will community solar make your utility bill go up? Especially if you are not subscribed to a local solar farm?

Consumers Energy and other opponents of the bills say, in Minnesota, the average customer is paying more because of community solar.

They say the state’s biggest utility, Xcel Energy, had to raise residential customers' bills by an average of $4.50 a month to cover the cost of credits to third-party solar subscribers.

John Farrell says that's not true.

Farrell co-directs the nonprofit Institute for Local Self-Reliance. He's based in Minnesota, where he analyzes energy prices. He said that when Xcel calculates the cost of community solar, it uses the average price for energy in a vast regional market.

Farrell argued that it's misleading to use that price. He said community solar farms tend to be in, well, the consumers’ community, meaning you don't have to move it as far. Because of that and other factors, the energy costs less than in the regional market.

Farrell said that when you use a more appropriate metric, the "value of solar" amount set by the state, the increase is on the order of cents a month for the average customer.

For that amount, "we have 800 megawatts more clean energy generation than we would have, and 15,000 households are getting bill discounts, often 20 percent or more," he wrote in a message to WMUK in which he shared his calculations.

“We know that the cost to consumers who are participating is very small, and small in the context of the many other things that drive utility costs," Farrell added in an interview.

Farrell said that if Xcel was really charging its customers an extra $4.50 a month because of community solar, it would have had to get that increase approved by the state utility board. He said Xcel has not done that, and that a desire to protect ratepayers is not what is driving its fight against solar credits.

“They hate community solar because it competes directly with their ability to make profits for shareholders in a way that few things do in a monopoly utility market," Farrell said.

WMUK asked Xcel spokesman Theo Keith to confirm that Xcel customers’ bills rose by $4.50 a month. In an emailed response, Keith insisted that customers are paying more because of community solar.

That cost "is included in Minnesota customers’ bills through the fuel clause, which all customers pay regardless of their participation in a solar program," Keith wrote.

But Keith did not respond to WMUK's request to confirm the exact amount, adding that he would take no further questions.

Michael Symonds reports for WMUK through the Report for America national service program.

Disclosure: The Consumers Energy Foundation is an underwriter on WMUK.

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This article first appeared at WMUK.