Opinion | Michigan’s solar energy policy is fair. I know because I helped write it

Aric Nesbitt is the former Republican chair of the House Energy Policy Committee. He served three terms as state representative for the 66th House District and is a resident of Lawton in Van Buren County.

One thing everyone agreed on when we passed the 2016 energy law in the Michigan Legislature is that an “all of the above” energy strategy is essential for Michigan’s energy future; in fact, alternative energy sources such as solar, wind, waste to energy, geothermal and hydro power already make up an important portion of our state’s energy mix. The bipartisan 2016 energy law cemented our state’s support for an “all of the above” energy mix by ensuring that we adopt clean, affordable energy, while phasing out mandates, and establishing a sustainable and reliable path forward for Michigan’s energy future.

The 2016 energy law focuses on increasing energy efficiency, reducing energy waste, and ensuring we’re generating power in the smartest way possible, while delivering it reliably to the smallest homes, largest businesses and everything in between. Increasing renewable energy is not the only way to achieve a cleaner environment; energy waste reduction and the increase in natural gas have also significantly lowered emissions.

In their zeal to defend solar power, Mr. Freeman and Ms. Stanfield in a guest column published in Bridge gloss over two important facts regarding private solar, or solar panels installed on an individual homeowner’s rooftop.

Bridge related content: Michigan residents, businesses must fight for solar energy rights

First, most private solar owners will continue to use the state’s energy grid, both to purchase electricity when their solar panels don’t produce enough (like when the sun goes down or it’s overcast) and to sell their excess electricity back to their local energy providers. Under the current system, called net metering, private solar owners use the energy grid, but do not have any responsibility to cover their fair share of the cost for grid maintenance or improvements.

These costs add up to roughly $780 per household, and those who don’t have private solar have to pay more than their fair share to make up the difference. The current scheme for private solar is like allowing some people to transport goods for free on a tollway, while everybody else pays for the infrastructure, operations and maintenance to keep it safe and open.

Second, net metering was created when solar was in its infancy and, as an incentive the policy reimbursed private solar owners for excess electricity at retail rates rather than wholesale rates. This policy effectively charges those who can’t or choose not to install private solar. The good news is that with technological advances in solar, we can more effectively integrate it into our energy mix in a way that’s fair and benefits everyone.

That’s why the 2016 energy law instructed the Michigan Public Service Commission to develop new, more equitable rules that benefit all Michigan residents when it comes to private solar.

Private solar owners who continue to use the energy grid will pay the same rate as any other consumer for electricity they purchase to supplement their solar power, and they will be reimbursed as an energy producer at competitive rates for any excess electricity they produce and sell back to the grid. People with private solar who choose not to use the energy grid cannot be charged for its maintenance, but everyone who uses it to purchase or sell back electricity will be paying their fair share to maintain a safe, efficient, resilient energy grid for everyone.

The 2016 energy law was two years in the making – including countless hearings and many hours of testimony from all stakeholders – and it was enacted with broad bipartisan support. Now, out-of-state special interest groups are trying to push through poorly balanced, narrowly focused legislation that will increase costs for a vast majority of families and small business owners to benefit a small group of users. The legislation would allow more people to avoid paying their share to maintain and advance our energy grid, and it would circumvent the processes that the 2016 law put in place to ensure everyone would be treated fairly.

As technology continues to develop, costs come down for other energy sources, and battery storage advances, we are entering an exciting time for clean energy development. In fact, while knocking on doors here in West Michigan just a few months ago, I met a homeowner that has a newer home that is completely off the grid thanks to a solar array, battery storage and a backup generator. This homeowner would not be affected by any of these proposed changes, as he’s truly self-sufficient and free from the grid.

We should and will continue to ensure that Michigan has an “all of the above” energy law that prioritizes affordable, reliable, and clean energy over special-interest carve outs subsidized by the rest of us. Michigan residents I talk to want affordable and reliable energy.

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Comments

Doug Knapman
Fri, 09/07/2018 - 9:19am

My understanding is power producing companies do not pay for using the power grid to deliver power. Owners of solar panels are another power producer. In a scheme where solar panel owners pay to use the grid to transport the power they produce and power consumers pay for the power grid to receive that power, the power grid companies are double dipping. To follow the toll road example is it would be like one person paying to fill the gas tank of your neighbor's car and the toll to for the neighbor to drive on the toll road, and the neighbor paying the toll also.

Michigan Observer
Mon, 09/10/2018 - 4:44pm

Mr. Knapman is quite correct when he says, "My understanding is power producing companies do not pay for using the power grid to deliver power. " Corporations do not pay any costs; all costs are included in the price the consumer pays. Consumers pay to use the grid. Who else would pay for it? If the power producers don't pay for the grid, who did he suppose pays it?

Dave Wolf
Fri, 09/07/2018 - 9:32am

The one element that is missing from Mr. Nesbitt's analysis of what is or is not "fair" is the fact that every kWh that is currently generated with fossil fuels in Michigan has an externalized cost imposed on society. That is the net harm from the combustion of coal, gas, oil, or whatever fossil fuel is used. There IS a negative impact from burning those materials - an impact with a cost that is foisted upon everyone, whether they are living off the grid, on the grid, net-metering, etc. We all have to breathe. This is a factor that the Republican side seems to conveniently avoid, while advocating for the fossil-fuel industry.

I would argue that his analogy of being "like allowing some people to transport goods for free on a tollway, while everybody else pays for the infrastructure..." should apply equally to the energy industry's externalizing of the true environmental costs of generating their product. In that case, it should be honestly argued that those providing pollution-free energy to the grid (the "tollway") are doing so without externalizing any harmful costs onto society. In essence, they are contributing to the infrastructure by NOT externalizing the cost of the energy that they produce.

Quite likely, those who are contributing that pollution-free energy also already had to pay a premium to be ABLE to contribute that clean energy.

Michigan Observer
Mon, 09/10/2018 - 5:10pm

Mr. Wolf is absolutely right when he says, "every kWh that is currently generated with fossil fuels in Michigan has an externalized cost imposed on society. That is the net harm from the combustion of coal, gas, oil, or whatever fossil fuel is used. " What he doesn't mention is that there is a Pigovian tax imposed on polluters to ensure that consumers are paying the full cost of what they buy; that full cost includes the negative externality of pollution. The level of the tax is chosen to minimize the cost to society. There is no point to imposing a tax that is higher than the cost of the pollution avoided.

It may be " that those providing pollution-free energy to the grid (the "tollway") are doing so without externalizing any harmful costs onto society. ", but that doesn't mean they are providing affordable energy. It may interest Mr. Wolf to know that when Germany phased out its nuclear generating plants, and relied on "clean, renewable" energy, they found it necessary to build coal plants in order to reduce energy prices to a level people could afford.

Saulius Mikalonis
Fri, 09/07/2018 - 9:49am

The sole focus of the author's comments is the cost of maintaining the grid without considering what benefits distributed energy provides. There are two sides to the ledger. Studies of net metering show that it presents a net benefit to the grid, which is not considered in the author's analysis. These benefits include (but are not limited to) reductions in electricity prices as they replace more expensive energy sources (especially during times of peak energy use), avoidance of construction of other energy production sources, reduction in pollutants from more traditional energy sources, and promotion of energy independence and importation of fuel. These benefits have been confirmed by numerous studies conducted all over the country.

Steve Harpmann
Fri, 09/07/2018 - 9:52am

The $780 figure comes right from utility company talking points and is not supported by any objective data. So its obvious who actually wrote this apology for monopoly utilities and screed against solar on the family home (which, lowers bills and monopoly utilities hate that).

Rick
Fri, 09/07/2018 - 2:28pm

Pretty much the power monopoly's talking points. Anyone who has looked into solar finds that the power companies have worked hard to prevent homeowners from producing power that would compete with them. DTE, when I asked about it, would only pay me what I had previously used as a DTE consumer and would take my production overage for free.

Mr. Nesbitt is pretty much a lobbyist for the Michigan power monopolies from the look of this. I see he was the director of the Michigan Lottery but what is he doing now? Is he lobbying for anyone? What is he doing for a job? Full disclosure please.

AM
Fri, 09/07/2018 - 3:47pm

I own solar panels on my house and therefore can tell you that two major statements in the article are inaccurate:
1) When you have solar panels you are always paying the fees that everybody else is paying for the distribution of electricity, i.e. for the grid.
2) You are only allowed to install as many solar panels as to cover your average yearly electricity use. Never more. Even if you somehow could get more, you would not get reimbursed for excess generation.

Matt
Fri, 09/07/2018 - 8:21pm

As said before, if you're being treated unfairly, buy some batteries and a generator, cut your cord and keep your power to yourselves! You're not being forced to sell it! Even though you want us to be forced to buy it! We can all be sure the rate payers will soon be begging for you all to come back so our rates will go down (ha ha)! But don't think too hard about the environmental damage and costs of your batteries and geni!

PLombard
Sat, 09/08/2018 - 5:50pm

First off, let's admit that just because a politician was involved in writing a law doesn't mean it's fair. Fair is pretty subjective. There is something to be said, though, about whatever it costs DTE to maintain a line with electricity to your house, whether or not you have solar panels. Figuring out a reasonable price is the crux. I don't have solar, paid about $207 in distribution charges and $651 total for last year. If $780 is the charge just to make sure I have electricity, that seems a little steep and evidently someone else is paying my share.
I'm still trying to figure out how then-Rep. Nesbitt was involved in writing Senate Bill 438, which went through the senate's Energy and Tech Committee and Senate but bypassed the house committee and went straight to the floor. Lawmakers complained that they were given very little time to read bills 437 and 438. Rep. Howrylak stated he was given the bills "only a couple of hours prior to the vote." That was the last day of session: December 15, a session that started at 12:01 am.
The process former Rep. Nesbitt is so proud of stunk. You can read about it in the House Journal 80 of 2016.

Jon Levin
Sun, 09/09/2018 - 8:43am

I don't understand why private solar generating households should not be granted advantageous incentives. How is it different from granting drivers with passengers exclusive lanes on the freeway, as is done in many states to encourage carpooling?

Chuck Jordan
Sun, 09/09/2018 - 10:44am

This is about the dumbest headline I've ever read. It is fair because I say so.

Paul cusack
Sun, 09/09/2018 - 10:56am

I like the $780 reference, this would imply that every meter should be charged a minimum fee of $780.
Every 2nd home, cabin, barn, boat dock etc. I'm sure if an when the utilities do this you will see more than just the solar people push back.
Yes I believe Mr. Nesbit help to write this legislation with a copy / paste from the utilities.

Michigander
Sat, 02/23/2019 - 3:32am

And do you think any of us will see a reduction in rates now that things are "more fairly distributed"? Of course not. The only one who benefits from this is the large power company so they can make even more money. And yes, people who pay the expense of solar should have the added benefits, they are producing clean energy (I don’t have solar power by the way). Now that you take the incentives away it makes it less cost effective to do so, so less people install solar and you have less clean energy.