Dems target energy costs and reliability with battery storage and solar energy rebates

Michigan House Democrats are continuing to try to push Michigan toward clean energy options, introducing a new package of bills to encourage adoption of solar energy and battery storage systems.

State Reps. Jenn Hill (D-Marquette) and Donavan McKinney (D-Detroit) introduced a set of bills on June 22 that provide rebates to consumers purchasing solar energy and battery storage systems, and allow customers’ solar and battery storage systems to support the electrical grid and act as independent power generators. 

“We want to expand capacity and access for everybody,” McKinney said. “I don’t care what race you are. I don’t care where you grew up at; where you currently live at. This is for everybody across the state, no matter what race, how much money you make.”

Hill’s bill, House Bill 4839, would require the Michigan Public Service Commission (MPSC) — which regulates electrical companies in the state — to develop new rules permitting customers who generate their own energy to provide benefits to the grid at large. This includes providing compensation for benefits like improving grid reliability and resilience, reduced peak demand for electricity, and support in maintaining specific voltage levels.

The bill notes that greater compensation may be provided for deployment scenarios facing greater economic hurdles, or to individuals who are low-to-moderate income, are located in environmental justice communities which face greater impacts of pollution and climate change, or live in areas with higher than average rates of power outages. 

Hill’s proposed legislation also allows individuals who generate their own power to opt-into participating in the wholesale energy market, while prohibiting utilities from accessing a consumer’s energy generation systems and from placing fees and insurance requirements on energy generators that are not also applied to individuals who do not generate their own electricity. 

“The benefits that come from basically a private person or a private business contributing back to the grid, those provide real value to the utilities. And so we want to make sure that those benefits are compensated back to the person who is making it possible,” Hill said.

While these solar energy and battery storage systems provide consumers with protections from power outages, they can also reduce emissions generated by power plants activated during peak hours and diminish the need for upgrades to electricity distribution systems, said Laura Sherman, president of the Michigan Energy Innovation Business Council.

“If you target these kinds of programs, in the right way to a specific location, where you know you have challenges on the distribution system, you can avoid, for example, upgrading a substation, or building new poles and wires,” Sherman said.

McKinney’s bill, House Bill 4840, would provide customers with rebates for installing new solar and battery storage systems. Customers will receive a rebate of $500 per kilowatt for a new solar energy system and $300 per kilowatt-hour for a new battery storage system. 

The rebates are doubled for low and middle income individuals, receiving $1,000 per kilowatt for new solar energy systems and $600 per kilowatt-hour for new battery storage systems. 

McKinney said these rebates would pull from federal funding, as well as state investments. 

“This is not a white-Black issue. This is not a Democrat-Republican issue. This is a humanity issue,” McKinney said. “In my view, everybody deserves reliable energy.”

According to the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy, a solar-plus-battery-storage system costs about $25,000 to $35,000 depending on the size of the battery and other factors. On its own, the office says adding a battery system to storage panels costs between $12,000 to $22,000. 

However, the U.S. government has a 30% tax credit on systems installed between 2022 and 2032, which decreases to 26% in 2033 and 22% in 2034. The tax credit will expire in 2035 if Congress does not renew it.

The federal Infrastructure Investment Jobs Act of 2021 and the Inflation Reduction Act of 2022 also provide states with funding to support clean energy efforts including $7 billion intended to support rooftop and community solar projects in low-income communities.

While there are more than 120,000 clean energy jobs in the state, there are not any rebates, tax credits or incentives at the state level, Sherman said. 

Policies like Hill and McKinney’s package signal that Michigan’s clean energy industry is open for business, which is important considering Michigan’s restrictive laws on community solar and distributed solar options like rooftop solar, Sherman said. 

Independently-owned community solar installations are not currently permitted in Michigan, and clean energy advocates have long pushed for changes to the state to remove its cap on distributed generation, which is considered a major barrier for people looking to install rooftop solar panels. 

Lawmakers also are working to change Michigan’s solar energy laws, reviving bipartisan efforts to allow community solar projects and to remove the distributed generation cap, as the Advance previously reported. 

By supporting rooftop solar and battery storage, Michigan will be able to attract more federal grants, which will allow the state and local administrators to provide more grants to Michiganders, making these systems more affordable while supporting installers and creating jobs in local communities, Sherman said. 

“We don’t think there’s any reason that all that funding should go to California and New York and Hawaii. We need to be setting the Midwest up for success,” Sherman said.

McKinney also outlined the need to leverage federal funds and support energy policy in the state.

As lawmakers work with Gov. Gretchen Whitmer to try and keep citizens from moving out of state and attract more individuals to the state, supporting everyone in Michigan’s abilities to invest and transition to solar energy is one way to do that, McKinney said.

“We need to capitalize on the federal investments, because they’re coming.  They’re coming, they’re already here, but more vessels are coming especially around solar,” McKinney said.

While the bills garnered a number of Democratic cosponsors, they failed to gain support from Republicans.

Rep. Pauline Wendzel (R-Coloma), the minority vice chair of the House Energy, Communications and Technology Committee, criticized the bills, saying they would lead to an increase in costs. While Wendzel had not thoroughly reviewed the bills on account of time constraints, she offered some initial critiques in an emailed statement.

“I wouldn’t support subsidizing a select group of companies well above market value with ratepayer money. Under current law, [solar energy and battery storage installation] companies are allowed to sell into the market at the wholesale cost. Why would we provide a mechanism to charge more than the market average and potentially spike costs to our residents?” Wendzel said. 

“Additionally, it looks like they have language providing a subsidy to low-income individuals in 4840. This addresses a symptom and not the problem – why are rates high in the first place? Allowing certain individuals to receive a credit of $1,000/kilowatt-hour will cause rates for every other resident to spike,” Wendzel said.

Consumers Energy offered similar criticisms of the bills. 

“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,” Brian Wheeler, media relations manager for Consumers Energy said in a statement. 

However, consumer generation and sale of electricity back into the grid is wholly under the utilities and the purview of the MPSC, Sherman said. 

“The program that we’re actually creating with these bills, they’re set up by the Public Service Commission,” Sherman said.

Additionally, consumers have protections through the attorney general for any behind-the-meter services such as installation of solar panels and battery storage, Sherman said.

“We’re not selling electricity, which is the purview of the utility and the Commission. We’re selling a product, so the customer is dealt with under the general consumer protection statutes,” Sherman said. 

While environmental justice advocates were supportive of Hill and McKinney’s bill package, they criticized the state’s investor-owned utilities saying they created issues with reliability and affordability. 

While the bills are good for providing immediate relief, issues like reliability and affordability, and issues with grid maintenance investments along race and class lines will remain under Michigan’s current investor-owned utility system, said Roshan Krishnan, policy associate for the Michigan Environmental Justice Commission.

“If you look at the grid, as it serves Detroit, we experienced what we like to call utility redlining. So the poorer areas of Detroit, the areas of Detroit that have higher concentrations of folks of color, basically, grid maintenance is not prioritized for those areas, and they’re actually operating on older poles and wires than a lot of the more developed areas,” Krishnan said.

“If we retain this sort of inequitable extractive model, that’s how the clean energy is going to operate too. Obviously there will be climate benefits… but these localized inequities that are so apparent in Southeast Michigan and all over Michigan and everywhere, those risks remain,” Krishnan said.

Michigan’s energy companies have repeated criticism for poor reliability resulting in long-term outages. An ice storm in late February, left hundreds of thousands of Michiganders without power for days, prompting an inquiry from the House Energy, Communications and Technology Committee that led to the creation of the bipartisan Energy Reliability, Resilience and Accountability Task Force aimed at expanding state oversight of the power grid, reducing reactivation and response times for future outages, and investment in updated energy infrastructure.

While the MPSC has updated its rules to address reliability issues, a recent report from the Detroit Free Press said that almost 100,000 homes were left without power after a severe storm on Sunday, June 25. The hardest hit areas appeared to be in metro Detroit.

Lawmakers revive bipartisan community solar efforts as Dems work toward clean energy goals

McKinney said his community is one of the hardest hit on the grid for DTE, another major utility.

“I’m going to be honest with you. We go out when the sun’s out, right? It doesn’t even have to rain. It doesn’t have to even be windy. It just goes out,” McKinney said.

DTE didn’t respond to a request for comment on the bills.

No matter what solutions Scott and the task force decide on, they will take time to implement, McKinney said. As people continue to face blackouts which can lead to sickness and death, solar energy and battery storage can be a life-saving option, McKinney said. 

By allowing citizens access to community centered energy options, people in environmental justice communities can take control of their energy and the impact of its production, Krishnan said.

“Part of the appeal also of having these more community-centered solutions —rooftop solar, community solar — they’re not necessarily going to provide all of the power we need. But what they do is allow for a more decentralized [energy] model and allow for more community control and have people saying, ‘OK, this is where we can site our energy. This is where it will be best for us. This is where we minimize the health impacts,’” Krishnan said.