Green Energy

It was one of the “best, geeked out, happy days” of Rachel Anne Engel’s life when she flipped the switch to solar on.

“Turning the switch on felt like a huge step in realizing a long-term dream of living an ecofriendly lifestyle,” said the Ferndale resident. “I thought it would be much farther down the road, but it happened to come first.”

It was only after a mountain of research, consulting solar developers, assessing the energy consumption of her house and saving enough money that Engel’s dream became reality. It was worth the effort for Ferndale’s newest solar user though.

The base price of installing solar panels on Engel’s home wasn’t cheap – costing $24,276. However, following discounts included by the provider, as well as a $6,200 federal tax credit (covering 30 percent of the entire expense), that total dropped to $14,501 – almost $10,000 less than the starting cost. And over the next 40 years, she’s expected to save $54,610.

“When we retire, we don’t want any bills,” she said. “We plan on getting off the grid within 15 years. But we want to do it in Ferndale. Also, it’ll act as a model for normal people living in a normal neighborhood that they can have self-reliance.”

Those savings are a combination of no longer paying a utility for power, as well as receiving energy tax credits for any extra energy fed back into the grid – a process called net-metering. Engel may be one of the last in Michigan to reap the rewards of being a residential solar customer. In two months, the Michigan Public Service Commission will decide on a proposal that may alter how much utilities pay for that electricity, and subsequently alter the status of solar power in the state.

That pending decision is causing a lot of angst among solar users, like Engel.

“My thoughts are DTE is going to run this town, they are doing a great disservice to the public,” Engel said. “They’re trying to change, trying to make Michigan one of the worst states in the country for solar.”

Net metering has proven to be one of the biggest incentives for customers getting into the solar game. While many see the value in reducing the pressure on a local climate already burdened by carbon dioxide, saving money and getting some back is easier to identify.

“I’m sad and disheartened to hear that,” said Lisa Pollard, a Berkley resident who recently installed solar panels. “It is a huge decision to go solar and now utilities are getting their green credit and we’re getting a surcharge.”

DTE doesn’t see it that way. When solar power was in its infancy, net metering made more sense. Now that it has reached mainstream status, the utility wants its customers paying it’s fair share.

“Net metering was a reflection of the capacity we had,” said Camilo Serma, the vice president of corporate strategy at DTE. “Ultimately, we believe moving away from net metering is more equitable. It’s shifting the costs.”

Serma said it’s necessary to move away from an incentive-based system toward a market-based mechanism. DTE will still pay for power plugged back into the grid, but not at the rate they currently pay. Furthermore, because solar users are taking advantage of the utility’s infrastructure without paying the same for it, they’ll receive a surcharge depending on how much electricity they use.

“Solar customers that decide to install rooftop solar panels are still using the grid,” Serma said. “When you think of the benefits of the power they export, we agree they should be compensated. But part of the discussion is how do you ensure those customers still using the grid pay for their fair share.”

Solar’s status in Michigan

Michigan’s status as a solar state isn’t anything special. Solar Energy Industries Association ranks the state 31st in the nation. It’s 152 megawatts installed supply .21 percent of the states’ total electricity (to put that in context, California, which ranks first, produces 24,463 megawatts, which add up to almost 20 percent of its electricity).

Following minor growth in installations, 2017 and 2018 saw a boom in both residential and utility installations in Michigan.

Michigan also doesn’t receive as much sun as states further south and out west. Couple that with the obstruction that snowfall causes when it lands on solar panels, and it’s easy to see why solar investment would lag in Michigan.

Despite the unremarkable numbers and barrier to entry for Michigan as a solar state, many developers think it could become the next big region for the renewable energy. It’s why installations by utilities and residents has ballooned in the last two years. In 2018 alone, the number of Michiganders adding solar panels more than doubled. What’s spurring that growth has less to do with its geography and more to do with the cost of energy.

“Here’s the thing, the fact that solar is growing in Michigan is part of the story,” said Sean Gallagher of the Solar Energy Industries Association. “Solar power is so much more inexpensive that it’s competitive and affordable in locations you wouldn’t think.”

Locations like Michigan, where the cost of electricity ranks 12th highest in the nation.

Along with the increase in electricity is the falling cost of installing solar panels. Gallagher said the price for solar panels has declined by “approximately 70 percent.” Panels have also become more efficient and last longer.

The growing list of benefits behind the renewable energy is why POWERHOME Solar, a North Carolina-based provider has thrown its hat into the ring. Its CEO sees the company filling a gap increasingly left open by utilities in the state.

“In Michigan, the costs are so high, it makes complete sense to switch. Some customers save money immediately,” said Jayson Waller, CEO of POWERHOME Solar.

Waller said North Carolina can generate 17 percent more solar power than Michigan due to increased sunlight. But he also said that, because Michigan’s electricity costs are an estimated 50-60 percent higher (than North Carolina), it makes sense the state has become the company’s largest market.

Of POWERHOME Solar’s 12,000 customers, almost half are in Michigan. That growth is reflected in the 300 jobs they have added in Michigan since 2017.

Officials at North Carolina-based Cypress Creek Renewables would agree.

“North Carolina was a booming market, but a lot of things are lining up and making Michigan an area to focus on,” said Kathy Webber, a community engagement manager for the company.

Cypress Creek Renewables focuses on large scale solar arrays for utilities. Some of the projects they have worked on have involved developing agriculture land. Because the profit margins for cattle-farmers are so cheap, several developers have honed in on leasing their land for renewable power infrastructure.

“For the most part, we’ve had receptive responses from farmers,” Webber said. “We have some larger projects, but nothing like competitors. What we have are 20 megawatts projects on 200 acres.”

The DTE solar farm in Lapeer, Michigan is the largest in the state, producing 60 megawatts of power.

Those large projects come from the same utilities pushing for changes in net metering. In 2017, utility companies grew the state’s solar capacity by over 70 megawatts, and then added another 25 megawatts in 2018 – and they have little intention of slowing down. 

“We have invested $2 billion since 2008. (We are) proposing to invest $1.78 (billion) in the next decade,” Serma said.

Expiring incentives

Back in Ferndale, Engel’s utility bill dropped from almost $70 a month to $8.43 a month – saving her $700 a year. Behind those savings is a 25 year warranty on the whole system. The panels were also built in the United States and lose 1 percent of their efficiency every decade. None of the figures include the energy tax credits that Engel and her husband are getting back for power plugged back into the grid.

A break down of the savings that Rachel Anne Engel receives with her solar panels.

Any new changes to the solar power system made by the Michigan Public Service Commission won’t affect Engel. Under the change, her house would be grandfathered into the new rule for the next 10 years. But if her neighbor wanted to do the same thing, or anyone else in Michigan for that matter, they won’t receive the same benefits.

Instead, they’ll receive less money for power plugged back into the grid. They’ll be charged an extra $20 a month on average for the electricity they use because they’re a solar customer.

“DTE is trying to change the rules, taking away net metering for customers when they make the profit,” Waller said. “The utility company is really unique because they are trying to get that rate case where they can basically buy it back at wholesale and then throw it back out for profit.”

Michigan wouldn’t be the first state to remove net metering in favor of an in-flow/out-flow system. Waller said both Nevada and Arizona eliminated net metering before changing it back due to public backlash. Serma doesn’t think that would happen in Michigan however.

“It depends on many factors,” he said. “Over 10 years, costs (of solar power) will continue to be reduced. Net metering or what replaces it is one of many factors. They (residential customers) still have the tax credit that will still be a feature of solar.”

He may be right. It’s unlikely that changing net metering will cause the same backlash in Michigan compared to Arizona and Nevada, as both states rank third and fourth respectively in the country for investment in solar. However, that federal tax credit users receive to save on installation costs, like the same one that saved Engel $6,200 on her installation, is 30 percent right now but will fall by around 4 percent each year. By 2020, it’ll only pay 26 percent of the installation and then 22 percent in 2021.

It’s unclear how the Michigan Public Service Commission will rule on the net metering case when deciding how much utility companies will have to pay for power plugged back into the grid. They declined to comment on the case due to it still being open.

When the change in net metering goes into effect, Waller thinks he won’t be able to sell to DTE customers as the incentive for solar power just won’t be there. However, he also said a lot of developers are expecting a battery that would store any extra power that would otherwise be fed back into the grid will enter the market soon.

“Eventually, with storage and batteries, it won’t matter if they connect,” Waller said. “The solution in the future is coming.”

Engel seems to think so too. She said Tesla plans to pair with Oak Electrict to sell Powerwall, a storage systems in the U.S. at wholesale. It’s supposed to be available this year. Their competitor is planning on doing the same.

“SunPower is releasing a battery and so for us, it’s what we’ll be doing. We don’t intend to give them (DTE) their power.”

Silicon Valley-based solar panel manufacturer SunPower was named the United States’ leading commercial solar provider and one of the country’s leading solar panel suppliers in Wood Mackenzie Power & Renewables latest US PV Leaderboard.

“As a leading solar technology and energy services provider in a market that we expect will continue to grow, we pride ourselves on helping SunPower’s residential and commercial customers meet their energy needs with the industry’s most efficient solar panels available today,” said Tom Werner, SunPower CEO and chairman of the board. “Our 34 years of experience, innovative technology, and complete solar and storage solutions have helped SunPower become a longstanding leader in solar.”

Specifically, SunPower’s US residential business grew by 15% and brought its total customer base up to over 236,000. The company also has a commercial solar installed base of 1.6 gigawatts and boasts 8 of the top 10 corporate solar buyers in America as its customers — including names like IKEA, Macy’s, and Target. The company has also installed over 9 megawatt-hours (MWh) of energy storage at over 20 customer sites.

“This year, SunPower is focused on maintaining our leadership positions by continuing to invest in our Next Generation Technology, solar-plus-storage solutions, digital platforms, and energy services offerings, which we believe offer the best opportunities for growth in the U.S. solar market,” Werner concluded.

Specifically, SunPower unveiled its highly-anticipated Next Generation Technology solar panels in early March which included the industry’s first-ever 400-plus-watt solar panel, the world’s most powerful residential solar panel. SunPower’s new A-Series solar panels can now be bought at 400 watts or 415 watts in the United States, and the Maxeon 3 400 W solar panel in Australia and Europe.

“SunPower is introducing the world’s first 400-watt residential solar panels as most in the industry are just crossing the 300-watt threshold for home solar,” said Jeff Waters, CEO of the SunPower Technologies business unit, at the time. “Our record-breaking cell technology and innovative research and development efforts have enabled us to fit more power capacity on rooftops than we ever have before. Our growing panel portfolio is delivering unprecedented value across global markets that goes unmatched by any other residential solar technology currently available.”

Governor Janet Mills has signed into law a bill that ensures consumers who produce electricity from solar panels are fairly compensated for supplying excess energy back into the electric grid.

The process is called “net metering.”

The legislation was signed Tuesday at a ceremony at Rocky’s Stove Shop in Augusta, the first stove shop in Maine to convert to solar energy.

The governor says Maine has more work to do when it comes to solar energy.

“Despite bipartisan support across the state for solar power, Maine has lagged behind other states in terms of embracing policies that advance the future of solar power,” Mills said. “We know this is the wave of the future, not just in terms of clean energy but providing clean energy jobs across the state of Maine.”

About 635 Mainers currently work in solar energy.

According to the Solar Energy Industries Association, Maine ranked 40th nationwide for solar installation in 2018, generating enough electricity to power 10,000 homes.

The City of Sydney, on Australia’s east coast, announced last week that it intends to further cut its greenhouse gas emissions by transitioning to 100% renewable energy to meet all its electricity needs starting next year.

Sydney had already set significant climate targets for itself, including a 50% renewable electricity target by 2030 and a 70% reduction of greenhouse gas emissions by 2030, moving to net-zero emissions by 2050, but with the City’s existing energy contract set to expire at the end of 2019, it decided to dive “head first into Sydney’s renewable future” by increasing its renewable electricity target to 100%. Specifically, Sydney will purchase only 100% renewable energy that’s generated by wind or solar starting next year, with new contracts to be negotiated over the next few months.

“We’re increasing our renewable electricity target and achieving it earlier because our residents and businesses are demanding it, it reduces emissions and it will soon be cheaper than coal,” the City of Sydney’s sustainability director, Chris Derksema said. “The shift to renewable electricity is happening much faster than anyone imagined. We’re leading by example, with the hope of inspiring local residents and businesses to take action themselves.

“Visitors to our swimming pools, libraries, childcare centres and even Sydney Town Hall will know we’re playing our part.”

The new commitment has already been endorsed by the City Council and is expected to cut Sydney’s emissions by around 18,000 tonnes each year — equivalent to the power consumption of around 4,000 households.

“Acting on climate change is the City’s top priority,” said the City’s Lord Mayor, Clover Moore. “We were among the first to set science-based targets in 2008 and since then we’ve reduced our emissions by 20% on 2005 levels.

“This decision by Council will allow us to achieve our commitment to reduce emissions by 70%, ten years ahead of our own 2030 deadline, well on the way to net-zero by 2050,” she added. “The City’s strong economic position and the money we’ve saved by investing in energy efficiency allows us to act responsibly by committing to 100 per cent renewable energy.”

The new commitment builds on the city’s pioneering climate work which saw it become the first local government in Australia to achieve carbon neutral certification all the way back in 2011. The City of Sydney is also a member of the C40 Cities Climate Leadership Group — a network of 94 of the world’s largest cities representing more than 700 million people worldwide — and, through its existing targets and ambition, has reduced its emissions by 25% based on a 2006 baseline and is now on track to achieve a further 10,000 tonnes of direct reductions through efficiency initiatives over the next five years.

“For too long, our state and federal governments have failed to take action to address accelerating climate change. That’s why cities must lead the way,” said Clover Moore. “We’ve reduced our own emissions, and continue to work with our business community through the Better Buildings Partnership. This successful program has assisted members to save $33 million a year on power costs and reduce their emissions by 52 per cent since 2001, well over halfway to their 2030 target of a 70 per cent reduction.”

The City has also reduced electricity usage by 26% since 2006 through its investments in energy efficiency initiatives such as replacing 6,500 street lights with LEDs — which saved the city AU$800,000 a year in energy costs and reduced carbon emissions by 2,400 tonnes a year — and installing solar panels on more than 30 of its office buildings, pools, libraries, and community centers on its way to installing over 7,800 solar panels by mid-2021.

A Florida utility announced recently that it plans to replace two natural gas plants with what it hopes will be “the world’s largest solar-powered battery.” Florida Power & Light’s goal for its Manatee County facility sounds wonky, but it has huge implications for the future of renewable energy in the U.S.

Scientists have urged the world’s governments to transition to renewable energy as much and as fast as possible to stave off the worst damage to the Earth’s climate. Three U.S. states and Puerto Rico have already set goals of using 100 percent carbon-free electricity in the next few decades, and a half-dozen other states are considering similar legislation.

But renewable energy, although it’s cheap to produce and benign for the planet, isn’t ideally suited for the U.S. electrical grid. Changes in the weather make wind and solar power variable, meaning the amount of power generated changes with the intensity of the sun or wind. By contrast, a fossil-fuel plant or a hydroelectric plant produces power at a constant rate that can be ramped up or down.

“If you’ve got 100 percent renewable energy, you have the problem of intermittency. There are times where the sun isn’t shining and wind isn’t blowing, so you have to back it up,” said Geoffrey Heal, a professor of economics at Columbia Business School.

Storing renewable energy is key

Variability isn’t a death knell for renewables, but it does call for more creative ways to approach power delivery than the U.S. has typically used. Chief among those is the need to store energy while it’s being generated and then release it when needed. 

Batteries are key to achieving this type of storage — and companies have been competing with each other to create faster and cheaper versions. The world’s biggest battery currently lives in the Australian state of South Australia, where it can store enough energy to shore up supply for the entire state. Six months after that Tesla-made battery went online in late 2017, it reportedly cut the grid’s service costs by 90 percent.

The arms race to create bigger and bigger batteries has resulted in some significant cost reductions. The energy cost for battery storage has dropped 35 percent since last year, Bloomberg New Energy Finance reported last week. “Batteries co-located with solar or wind projects are starting to compete, in many markets and without subsidy, with coal- and gas-fired generation,” the outlet wrote.

“100 million iPhone batteries”

FPL’s battery promises to be four times as large as Tesla’s — or in the company’s words, “the equivalent of approximately 100 million iPhone batteries” — and store enough energy to power 32,000 homes for 24 hours. (That’s about one-sixth of the housing units in Manatee County.) It will be charged by an existing solar power plant.

The utility also said it would upgrade existing solar power plants and install smaller batteries across the state to make up for the 1,600 MW of generating power that the gas-fired plants currently produce. According to FPL, the battery is scheduled to be operational in late 2021.

A change in the city of Naperville’s permitting process could make it easier for residents seeking permission to install solar panels on their property.

City Council members Wednesday will consider approving a single permit process for residential solar installations. The city’s current process requires two separate permits — one for building and the other for electrical.

According to city documents, the new streamlined permit would capture the same information collected from the two permits and get rid of duplication. The single permit would make inspection more efficient as well.

If approved, the permit would cost $132 and would include clerical review, plan review and inspection.

Making the permitting process easier for residential solar panels contributes to Naperville’s pursuit of a national SolSmart designation and its objectives to advance renewable energy, enact policies that support clean energy and engage community members in the 2010 Naperville Sustainability Plan’s clean energy practices, according to city documents.

Making it less cumbersome also aligns with the Metropolitan Mayors Caucus’ Greenest Regional Compact, which Naperville joined two years ago.

The change reduces the cost as well, city documents said. Naperville in 2018 collected about $3,000 from residential photovoltaic — or solar — permit applications.

The city of Naperville in January announced more than 3,500 solar panels will be installed at the Springbrook Water Reclamation Center this summer. The panels could generate more than 1.6 million kilowatt hours of electricity annually — enough to power 145 homes a year.

Solar panels were also recently installed on the roof of the Naperville Municipal Center. The panels will power the WiFi-equipped Naperville Jaycees Smart Park, which is under construction at a site between the municipal center and the DuPage River.

Municipal center solar panels can also be used as a revenue-producing element for the city since they are expected to produce more electricity than the park consumes. The city plans to sell excess energy back to the grid.