Distributed energy generation continues to grow in Michigan, as the number of installations producing power increased nearly 57 percent in 2018, according to the Michigan Public Service Commission’s annual report tracking participation in the state’s legacy net metering program.
Participation in the state’s legacy net metering program has grown every year since 2006. The 2018 Distributed Generation and Legacy Net Metering Programs Report found that the number of projects grew to 5,379 installations in 2018 from 3,427 in 2017. The number of customers participating in the program increased to 5,219 in 2018, up more than 59 percent from 3,277 in 2017. The total number of installations exceeds the number of customers because some participants have multiple installations.
By the end of 2018, the total capacity of the installations was approximately 43,481 kilowatts (kW), an increase of 13,910 kW. While that’s a 47 percent increase year over year, legacy net metering projects remain a small portion of Michigan’s total retail electricity sales, at .0048 percent.
The legacy net metering program allows customers to generate their own electricity, mainly through solar and wind projects, to reduce their energy needs or electric bills. Michigan law allows utilities to limit participation in the program at 1 percent of their five-year average peak electricity sales, with half of this amount allocated to smaller, residential-sized systems, and the other half for larger projects. Only the Upper Peninsula Power Co. (UPPCo) has reached this level of participation, and in a settlement agreement approved by the MPSC earlier this year, UPPCo agreed to double the size of its program.
Other report highlights:
- DTE Electric and Consumers Energy, Michigan’s two largest utilities, account for 88 percent of the legacy net metering program’s capacity.
- As of the end of 2018, both DTE Electric and Consumers Energy still had about two-thirds of the space remaining in their programs — 69 percent and 66 percent, respectively — for residential-sized projects up to 20kW. Even after doubling its program, UPPCo has the least amount of space available, at 39 percent.
- Other utilities also have significant amounts of space available in their programs for up to 20kW: Alpena Power Co., 71 percent; Indiana Michigan Power Co., 84 percent; Upper Michigan Energy Resources Corp., 49 percent, and Xcel Energy, 82 percent.
- Solar power remains by far the largest category of the projects, with about 94 percent of participants installing solar projects; wind turbines are a distant second.
- There are legacy net metering projects in all but one Michigan county: Luce County in the Upper Peninsula.
The state’s 2016 energy laws called for the MPSC to transition to a distributed generation program from a net metering program.
The MPSC adopted new guidelines in 2017 under which distributed generation programs become effective after a utility’s next rate case is approved. Once a utility’s distributed generation program is in effect, no new customers can join the net metering program, but current net metering customers can continue under that program’s guidelines for 10 years from the day they enrolled.
The net metering program is now referred to as the legacy net metering program. This report covers data for calendar year 2018, during which no utility had a distributed generation program tariff in place. DTE Electric and UPPCO began distributed energy programs in 2019.