GLREA John Sarver: Serious Concerns about Michigan SB 438 and impact on net metering

Posted by Laura Arnold  /   August 18, 2015  /   Posted in Net Metering, solar  /   No Comments


PO Box 534, Rockford, MI 49341;  Ph. 517-290-8602  E-mail


August 14, 2015

Dear Senators Nofs and Proos,

GLREA has very serious concerns about SB 438 and the Distributed Generation Program that has been proposed to replace Net Metering.  As indicated in a recent MPSC report, the number of net metering customers in Michigan has increased to 1,840.  Net Metering is working as a fair and easy to understand state policy that provides an electric choice for homeowners and small businesses and promotes clean Michigan energy resources and local jobs.  While the focus of this letter is net metering, GLREA wants you to be aware that we support the extension and expansion of the Renewable Portfolio Standard and Energy Optimization Programs.

GLREA is a statewide non-profit formed in 1991 to promote an increased use of renewable energy in Michigan.  We have a diverse membership that includes solar installers, manufacturers of renewable energy equipment, educators, architects, engineers, builders, and citizens interested in a more sustainable and clean energy future.  Many GLREA members, small businesses that make and sell solar panels, inverters, and racking systems, will be severely impacted by the proposed changes to net metering.  These businesses have been investing in Michigan, creating jobs, and are an important part of one of Michigan’s growth industries.  Michigan policy needs to support free competition and not discourage these businesses.

The proposed Distributed Generation Program allows utilities to charge homeowners the retail rate for electricity produced by solar systems they own.  The utility would then provide a bill credit at a lower rate that will change periodically.  How the lower rate is calculated will be difficult for most people to understand and good estimates of solar savings will not be possible.

Utilities say that homeowners with solar are not paying their fair share for grid services and are being subsidized by other ratepayers.  This is “proven” by studies done by utilities.  Many other studies, not done by utilities, show the opposite.  Solar systems at a home or business will produce power during hot summer days when it is needed most and there will be no line losses from distant power plants.

In net metering, most power is used on site and replaces power sold by a utility.  There will be some excess power generated on certain days and those electrons will be put on the grid.  Those electrons will probably go to the next door neighbor and certainly will not use the grid to go to another part of the state.  The use of the grid is minimal.

However, like any customer who has reduced his use of utility power, a solar owner will buy less power from the utility.  Of course, this is also true if you buy a more efficient refrigerator or LED lights or turn off a light when you leave a room.  Should we charge all people for power that they used to purchase?

The existing Net Metering policies are fair and easy to understand.  The policies provide an electric choice for homeowners and small businesses.  I would suggest two changes to improve our Net Metering policies.  The first change is an increase in the size of allowable systems for true net metering to 150 kW.  This will make solar choice more available to businesses and farmers.

The second change is the addition of “virtual net metering” to allow non-utility owned community solar projects.  Some homeowners and businesses do not have good sites for solar energy.  Community Solar provides an opportunity for these building owners and renters to invest in solar in a central facility and receive a share of the electricity produced based on their contribution.  Virtual net metering would allow a utility bill credit to be provided to the community solar stakeholders at their residence or business.  Virtual net metering would increase customer choice as does net metering and provide an opportunity for all citizens to invest in Michigan’s future.

Please keep our existing net metering polices and expand customer choices with virtual net metering and an increase in true net metering to 150 kW.



John Sarver, President

cc: Rep Nesbitt

Sen. Horn

Sen. Schuitmaker

Sen. Hune

Sen. Shirkey

Sen. Zorn

Sen. Hopgood

Sen. Knezek

Sen. Bieda

Talking Points on SB 438

  •  Legislation appears to let utilities “take” electricity produced by a homeowner’s own solar system and charge the customer the full retail rate for electricity he/she produces.
  • The regulated monopoly then gets to provide a bill credit at a lower, variable rate that no homeowner would possibly be able to understand. It will be difficult to do a good solar savings estimate because the rate will change periodically.
  • Rather than increasing customer choices, the legislation will take away an electric choice that homeowners now have.
  • Net metering is working well in Michigan. It is a fair and easily understood state policy. Why change it?
  • Recommend two improvements to net metering – 1) increase cap for true net metering, i.e. retail rate credit, from 20 kW to 150 kW, 2) virtual net metering to permit stakeholders in community solar projects to obtain a utility bill credit at their residence or business
  • Homeowners and businesses are investing in solar energy - a clean, Michigan energy resource that benefits our economy, our environment, and our electric grid.
  • Solar systems provide clean power, diversify our electric grid, provide a hedge against volatile fossil fuel prices, reduce line losses, and provide power when air conditioning loads are high.






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