Michigan energy law provokes uncertainty for solar industry

Dive Brief:

Landmark legislation signed by Michigan Gov. Rick Snyder (R) last month will overhaul the state's energy sector and aim to preserve net metering, but local media reports the law has created much uncertainty in the clean energy sector.
The Traverse City Record Eagle reports bill language referencing the locational marginal price of energy has led to confusion about the rates solar panel owners would be paid for power they produce.
State regulators have been tasked with developing a tariff process for distributed solar, but it's uncertain what the new rates will look like as both sides off up competing suggestions. Energy experts told the paper that Michigan's net metering tariff docket could also wind up raising the rate paid to panel owners, depending on congestion and locational value of the power.

Dive Insight:

Michigan's energy legislation was widely hailed last month, but solar panel owners and installers are worried the new rules could increase their payback time and reduce interest in the resource.

The Traverse City Record Eagle spoke with Brengman Brothers Crain Hill Vineyard, where owners said they would not have purchased solar panels if they had known the direction the state would take. Michigan only has about 2,000 solar installations. In debates over the legislation, clean energy advocates said the new market structure will help to grow that number while avoiding utility domination of the market.

The Alliance for Solar Choice spokeswoman Amy Heart said the group was encouraged to see elected officials work together from both parties. "Legislative leaders heard loud and clear that retail net metering must be maintained to ensure a level playing field for self-generation in Michigan," she said in a statement following lawmakers' passage of the bill.

Michigan's new energy law was developed through a bipartisan compromise led by Snyder. The plan to overhaul the state's energy marketplace also raises its renewable energy standard from 10% to 15% and keeps its limited retail choice program alive.