Michigan Democrats have introduced a pair of bills to significantly slash the cost of home solar and battery storage systems for low-income utility ratepayers in an effort to boost electric grid reliability and offer protection during power outages.
Introduced on Thursday, House Bill 4840 would require utilities to offer sizable rebates to customers that could offset the costs of home solar and battery storage systems by thousands of dollars. A companion bill, H.B. 4839 , would require state regulators to create a system in which those home batteries could be dispatched to the grid when needed. Flat Ethernet Cable
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Supporters say the legislation is the first of its kind in Michigan that provides an alternative route for ensuring power reliability as the state’s large investor-owned utilities face scrutiny for relatively frequent and long-duration outages.
“The basic idea is to allow more folks to afford energy storage and solar systems, especially in communities where they’ve had disinvestment in the grid and outages. Often in Michigan, those are more low-income communities where folks can’t necessarily afford to invest in power generation and storage at home,” said Laura Sherman, president of the Michigan Energy Innovation Business Council.
H.B. 4840, sponsored by state Rep. Donavan McKinney, D-Detroit, would create a $500-per-kilowatt rebate for a solar installation, which would double to $1,000-per-kilowatt for “income-qualified” customers, or those whose household income does not exceed 200% of the federal poverty level. Battery storage systems would receive a similar $300-per-kilowatt-hour rebate, or $600-per-kilowatt-hour for low-income customers.
“We’re excited to open the door for true climate justice and energy equity that can help all families at every income level benefit from and contribute to a clean energy future,” McKinney said in a statement.
With typical single-family home solar installations at 3-8 kW, low-income residents could knock off $3,000 to $8,000 on a home solar installation, or nearly half of the cost of a typical installation.
“The idea is to allow people to take advantage of these technologies as costs come down and create their own resiliency, ride through outages and protect critical needs as we see more and more outages and historic disinvestments in the grid,” Sherman said.
However, the legislation is already generating utility opposition, with opponents claiming that the as-yet undetermined cost of the program would be shouldered by all of a utility’s customers.
“These and other similar bills will create a system of winners of losers, and significantly increase energy rates for vulnerable Michiganders. The real winners in this legislation are unregulated energy companies who will get a windfall payment for their products and lock the Michigan Public Service Commission out of any oversight of their offerings, potentially hurting customers. This legislation is an end-around the state’s transparent, thorough energy planning process,” Consumers Energy spokesperson Brian Wheeler said in an emailed statement.
Blake Alexander, customer advocate specialist with The Green Panel Inc., a solar and battery installer with showrooms near Grand Rapids and in Brighton, said the rebates “would have huge implications for homeowners.”
“Up to $8,000 back in their pocket is huge to alleviate any anxiety about” earning a return on their investment, Alexander told Crain’s Grand Rapids Business . “If we see this pass, we really expect a huge new wave of interest coming to solar.”
Sherman added that additional savings on installations could be achieved through federal tax credits through the Inflation Reduction Act and low-cost financing in Michigan through organizations like Michigan Saves .
“Pair all of those things together, and we really think you’re getting to a very affordable (investment) for all customers,” Sherman said.
Sherman also countered concerns by noting that utilities annually request rate increases, including for funding grid reliability programs. She said the two bills represent a “paired approach” that can work alongside utility grid investments.
“These bills are a way to potentially avoid some distribution upgrades because they have the ability to support the grid as well as enabling folks in those areas where all of that utility disinvestment over a long period of time hasn’t made a dent in their own reliability,” Sherman said. “We think it’s time to invest in the ability for individuals to take control of that. In these places with historic disinvestment, people are the most vulnerable. We need to do something now.”
H.B. 4839, sponsored by state Rep. Jenn Hill, D-Marquette, would require the Michigan Public Service Commission to establish rules for connecting those home energy storage systems to the power grid and compensating battery owners for their excess electricity. The process also is known as “virtual power plants” that can be tapped during outages or high-demand periods.
These virtual power plants could lead to “increased resilience and reliability” of the power grid, and create “positive net present value or demonstrated savings to all ratepayers, including the avoidance of costly investments by electric distribution companies,” according to the bill language.
“People across the U.P. and the rest of Michigan want reliable, affordable and independent energy. That’s what this legislation will help to achieve,” Hill said in a statement. “By passing these proposals, we can take an important step toward ensuring communities aren’t left in the dark during power outages that happen all too often. Solar energy and battery storage systems can provide greater energy freedom for Michiganders, reduce our dependence on imported coal and gas, and empower us to take charge of our energy future.”
The bills are each co-sponsored by 20 Democrats.
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