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4 Impacts of Michigan’s New Clean Energy Legislation on Solar Installations

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On November 28, 2023, Governor Gretchen Whitmer publicly signed the “Clean Energy Future Plan” and “Clean Energy and Jobs Act” at Eastern Market in Detroit MI (more detailed info here). These bills provide a pathway to a more clean and equitable energy future for the residences and businesses in our state. In this blog, we’ll explain how PA 235 formerly (SB 271), one of the Michigan legislation bills signed into law, will impact behind-the-meter solar opportunities for all Michiganders.

PA 235 went into effect on February 27, 2024. Here’s a breakdown of this new Michigan clean energy legislation related to behind-the-meter solar and storage: 

  1. New Distributed Generation cap of 10%
    Michigan has historically had one of, if not the most, restrictive rules about how many systems can participate in the Distributed Generation (formerly net metering) program, only allowing up to 1% of each utility’s 5-year average load in KW to participate. The new law codifies the available space in the program pool, allowing home and business owners to participate without worrying about the program reaching capacity every time they plan a solar and storage project that may take a number of months to properly execute. 
  2. Ability of systems up to 550KW AC to participate and removal of the generation meters
    We couldn’t be more excited about this one. Previously, systems were prohibited from Distributed Generation (Rider 18) participation unless they were rated at 150KW or below. Now, that size has been increased to 550KW and the requirement for a generation meter has been removed. Because of the new Michigan clean energy laws, you can have a bigger, more valuable system AND some of the hardware costs have been removed. It’s a true “win-win” for anyone considering a commercial solar installation!
  3. Increase in the system sizes to 110% of annual load
    Another improvement to designing your perfect home energy solution is the ability to plan for the future. Historically, systems were not able to be sized to generate more than a home or business consumed (KWh) in the past 12 months. With the new Michigan clean energy bills, we can now go up to 110%. This means that the EV you’re planning to buy, or mini split unit to rely less on natural gas just entered the solar planning party!
  4. Outflow credits applied to all volumetric charges, not just Inflow Generation
    This point is essentially the rectification of a previously misconstrued amendment to the original net metering program. It is a major improvement for solar investment ROI and generally being able to understand your post-solar utility billing. When the state moved from Net Metering to Distributed Generation in 2019, the impact to solar ROI was the most obvious. Customers received about half credit for their excess energy. With that, the utilities argued that the excess could only be applied to a certain section of volumetric charges on the bill statement. This provision now codifies that excess generation is to be applied to all volumetric charges on the bill statement. This is a big deal because the utilities tried to add cost in the rate requests to the part of the billing solar credits could not impact. Now if you have solar, the only part of your electric bill we cannot impact is the grid connection fee or any other fixed charges.

In addition to the exciting behind-the-meter provisions, the bills also:

Provokes Investment in Michigan Clean Energy:

  • Requires 50% of Michigan’s energy to come from renewable sources by 2030 and 60% by 2035 (a 4x increase in 10 years) 
  • Sets an energy storage standard of 2,500 MW by 2030 to stabilize the grid and increase reliability
  • Creates path for new project siting authority

Boosts Energy Efficiency

  • Requires utility companies to increase investments in energy efficiency to reduce energy costs by raising Michigan’s energy efficiency standards from 1% to 1.5%
  • Requires a minimum of 25% of energy efficiency spending in low-income communities
  • Requires utilities to recruit, hire, and train people from low-income communities to do weatherization and energy efficiency work–creating good-paying jobs and a career ladder

Strengthens the MPSC

  • Expands the authority of the Michigan Public Service Commission to specifically consider low-income Michiganders, environmental justice communities, and public health when approving utility companies’ long-term energy plans
  • Allows the Michigan Public Service Commission to evaluate utility plans based on affordability

Supports Energy Workers

Based on the passage of these bills,it’s obvious to us at Michigan Solar Solutions that the Michigan State Legislature is taking energy freedom and energy resilience seriously. We couldn’t be more excited to help lead the effort of transforming the Michigan clean energy landscape. When the time is right for you to join us in the energy revolution hit the link below and get in touch for a free consultation!

MSS is proud to be your top destination for going solar and taking ownership of your power. Ready to start the process? Let’s begin with a free analysis!

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