GLREA to the MI Legislature: Remove the 1% Cap on Solar for Homeowners, Farmers and Business

The Great Lakes Renewable Energy Association (GLREA) is working to remove the 1% Cap law that limits the number of small scale small solar systems that homeowners, farmers and small business can install and be connected to electric grid.


When Michigan's Energy Law (Public Act 295) was first enacted in 2008, there was a section that limited the number of small scale solar systems that the regulated utilities (the key ones being DTE, Consumers Energy, Upper Peninsula Power Company and Indiana Michigan Power) had to connect to the grid, to just 1% of the peak energy load for each utility. And once this Cap is reached, the utilities are no longer legally obligated to connect a new solar system to the electric grid.


Back in 2008, this 1% Cap wasn't a concern because there were very few solar systems in Michigan. But solar has become very popular to homeowners, farmers and small business because Consumers Energy and DTE keep raising their electric rates and people want to take control of their energy costs by installing a solar system to generate their own electricity. So the 1% Cap has been reached by Consumers Energy and Upper Peninsula Power Company (UPPCO). DTE will reach it in another year.


Now both Consumers Energy and UPPCO have agreed to voluntarily raise the Cap to 2% but this Cap needs to be permanently eliminated because it serves no purpose, except to restrict the freedom of homeowners and business to install their own solar system to save money and protect the environment.


In 2016 the MI Legislature modified the 2008 law and replaced the old Net-Metering program with a new Distributed Generation Energy program. The reason for this change (which GLREA doesn't agree with) is that DTE and Consumers Energy said that solar owners were not paying their fair share of the cost to maintain the electric grid. So under the Distributed Generation (DG) program, a new tarrif or credit would be calculated based on the cost of service of the utilities to provide for solar owners. When this tariff was finally determined, the credit that solar owners receive for exporting electricity back to the grid is alot less than it was under the old net-Metering program. Under Net-Metering it was the same as the retail rate, about 16 cents per kWh, but now under the Distributed Generation program, its only about 8 cents per kWh.


The key point is that this new DG tarrif is based on the cost of service so the utilities can no longer say that solar owners are being subsidized. Dan Scripps, the Chairman of the Michigan Public Service Commission, testified to the MI House Energy Committee on February 17, 2021 that solar owners are not being subsidized and are paying their fair share for the costs of the grid, and therefore there is no reason to have a 1% Cap on solar installations.


But DTE and Consumers Energy still oppose the bill that would remove this Cap, and why is that? Its because DTE and Consumers want to maintain their monopoly on being in total control of generating and distributing electricity in Michigan. They don't want homeowners, farmers or small business installing solar, because that means competition to the utilities. Consumers Energy and DTE want to continue charging outrageous rates for electricity and they want to take away the ability and freedom of homeowners and business of choosing a different way of getting their electricity.


Michigan has the highest electricity prices of all the Midwest states. Consumers Energy just raised their residential rates by 11.9% on January 1, 2021 and they just announced that they want to raise rates by another 8.8%. These rates are increasing much higher than inflation and much higher than the rate that most peoples income is increasing. And with COVID-19, thousands of Michigan families and small business are suffering and yet Consumers energy keeps jacking up the rates! This has to stop, and the only way to stop Consumers Energy and DTE from raising rates is to provide competition by giving homeowners and business a choice to install solar. If Consumers Energy and DTE start losing lots of customers to solar, then they will stop jerking Michigan people around. So removing the 1% Cap will help all rate payers in Michigan!

Representative Gregory Markkanen introduced House Bill 4236 which would eliminate this 1% Cap entirely. This bill is now in the House Energy Committee. GLREA needs your help in getting MI Legislators to support this bill. We need you to do 3 tasks:

First, send a letter, email or call your Legislator to urge them to support this bill, Second, send a letter, email or call Governor Whitmer to urge her to support this bill, and Third, become a Member of GLREA or renew your membership so GLREA has the financial resources to take on Consumers Energy and DTE.


GLREA has all the names, addresses and phone numbers of all the Legislators and Governor for you to use. We also have a fact sheet, sample letters and email you can use. So send John Freeman an email if you want to help. We will send you the information so you can get started!


Thanks for your support. If you have any questions or want to help please contact John Freeman at Jfreeman13@comcast.net.

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