Here’s how pilot programs aimed at cutting energy costs in low-income Mich. households are faring

High energy costs have long been a burden on the wallets of low-income Michiganders, but state- and community-led initiatives are helping to reduce the financial weight of electric bills and reshape the state’s energy landscape, experts said during a webinar this week. 

During the Wednesday presentation, Michigan community organizations, energy managers and engineers gathered to review the results of three programs intended to reduce the burden of high energy costs for low-income Michiganders. 

The average Michigan household spent 3% of its annual income on energy, but low-income Michiganders spent an average of 15% of their income on energy, according to a June report from the Clean Energy States Alliance, a Vermont-based nonprofit organization of public agencies working to advance clean energy. That report analyzed the pilot programs established by the Michigan Department of Environment, Great Lakes and Energy (EGLE) to address the energy burden. 

“The Michigan Solar Communities: Low- [and] Moderate-Income Access Program began as an accelerator with the U.S. Department of Energy. Through the accelerator we were provided funds to create a community program that would provide renewable energy access to low-income customers and potentially address low-income energy challenges,” Lisa Thomas, an environmental engineer specialist at EGLE, said during the webinar.

“We were able to complete the accelerator and produce several phase projects that not only provide access to renewable energy but also address the low income energy burden and cost to weatherization,” Thomas said.

EGLE began planning the first program in 2017, looking to demonstrate how weatherizing houses and connecting them with community solar programs could help save costs for low- and moderate-income residents.

By weatherizing houses through the installation of weatherstripping, new windows or insulation, households can reduce the amount of energy they need to use. Through participating in community solar programs, households can save money on energy costs by paying to subscribe to a local solar array and receiving credits on their bills for the electricity generated by the panels. 

“We know that the majority of our low-income members are some of the highest users of electricity,” said Tammy Haworth, energy use advisor for Cherryland Electric Cooperative, the energy utility which participated in the first community solar pilot program.

Folding community solar credits into weatherization helps reduce financial burdens for low-income program subscribers, Haworth said.

“We thought [participating] was just the right thing to do,” Haworth said. 

In this first program, which was based in Northwest Michigan, EGLE was able to cut participants’ energy costs 70% by pairing community solar efforts with weatherization. The success of the first program helped launch two additional pilot programs in the Village of L’Anse and the greater Lansing area, each working with a different type of electrical utility. All three programs are still up and running, Thomas said. 

As utilities across the state are working to provide more renewable energy options, Michigan lawmakers have begun work on a number of energy policies to meet Gov. Gretchen Whitmer’s goal of transitioning the state to a 100% clean energy by 2035.

Alongside Michigan Senate Democrats’ Clean Energy Future bill package, which seeks to guide Michigan’s clean energy transition, members of the state House and Senate have introduced policies to allow the creation of independently-owned community solar projects in Michigan. Those projects are not currently permitted under state law.

By developing three pilot programs in different communities across the state, EGLE expected these programs could be used as a blueprint for implementing low- and moderate-income community solar programs in communities similar to those in the pilot program. 

“We wanted this program to be a successful program and to continue to find ways to provide access to renewable energy, as well as address low-income energy burden and challenges,” Thomas said.

EGLE led the creation of each program by contacting community action agencies and utilities and asking them to partner on the development of each pilot program. Residents who participated in each of the three pilots were enrolled in community solar programs and received free weatherization services to help cut down on energy use. 

Partnerships begin in Northwest Michigan

Anna Adamsson, a project manager for the Clean Energy States Alliance, broke down each program in the Alliance’s report, in addition to hosting Wednesday’s webinar to discuss each of the pilots’ progress.

In the first pilot program launched in 2018, Cherryland Electric Cooperative and the Northwest Michigan Community Action Agency partnered to provide up to 50 low-income residents with nine solar panels for each participating household.

The program serves rural communities in Benzie, Grand Traverse, Kalkaska, Leelanau and Wexford counties. 

Each household was enrolled in the program at no cost. While Cherryland was able to expedite enrollment in the community solar program, the Community Action Agency opted to engage households that had previously received weatherization services from them. 

Subscribers to the community solar program received approximately $350 in annual solar credits. According to the report, Cherryland saw a 9.7% decrease in late payments from enrolled households after a year of the pilot program.

When surveyed, 16% of program participants said they were using their utility bill savings on food, while another 16% said they were using their savings to pay medical bills and another 16% said they were spending savings on home repairs. 11% said they were spending their savings on paying debts. 

“Just knowing I could save $30 to $40 a month on my electricity bill makes things a lot easier,” Ruby Ogemagegedo, one of the program’s participants said in the report. “It means that I don’t have to worry about how my dogs are going to eat.”

L’Anse builds new array, requires buy-in from program participants

In 2020, EGLE launched the second pilot program alongside the village of L’Anse in Michigan’s Upper Peninsula and the Baraga-Houghton-Keweenaw Community Action Agency. 

Like the first pilot, this program enrolled houses that had already received weatherization services through the community action organization in recent years. However, this program used L’Anse’s municipal-owned utility, which required subscribers to buy into the program. 

Prior to partnering with EGLE, L’Anse had decided to create a low- and middle-income tier for its community solar program. Subscribers to this tier would not have to pay an upfront cost to subscribe, but would commit to a small monthly fee charged to their electricity bill. As part of the pilot program, EGLE subsidized the costs of each subscription to make the fee affordable for low- and middle-income households. 

L’Anse Village Manager Bob La Fave noted in the alliance’s report how this program and its payment structure was specifically tailored to fit L’Anse’s needs. 

“This is L’Anse’s recipe … just because it worked like this here doesn’t mean that there isn’t a better recipe for somebody else based on their own individual community needs,” La Fave said in the report.

L’Anse built its own 110.5-kilowatt, 340-panel solar array for the program, which served 25 subscribers who could commit to up to 10 solar panels for a subscription cost of 90 cents per panel, with subscribers earning a 95-cent credit per kilowatt hour of output from the panels. Twenty-four out of 25 participants committed to the 10-panel maximum. 

After launching the program in 2020, subscribers have not had to pay out of pocket because the credit has always exceeded the fee. Participants in the pilot program have earned about $275 in bill credits each year, or about $21 to $23 dollars each month. According to the report, some households enrolled in the program would fall behind on bills, but the monthly savings from this program enables households to keep up with and afford energy bills.

EGLE taps large-scale utility for partnership in the Lansing area

In the third pilot program, EGLE partnered Consumers Energy, Michigan’s largest utility company, with Capital Area Community Services, a community action agency serving the greater Lansing area.

Consumers Energy had established a community solar program in 2016 with its solar gardens initiative, which allows customers to subscribe to their desired number of solar blocks, paying a fee on their monthly bill, and receive a credit for the solar energy actually produced. According to Consumers Energy’s website, these credits averaged $6.48 monthly per solar block, with subscriptions starting at $8 monthly. 

The pilot program used Consumers’ existing subscription capacity and created a subset of its community solar program for low-income households. The households that participated in the program did not pay for their subscriptions and were instead paid by Capital Area Community Services using funding from EGLE. While Consumers Energy bills the community action agency, earnings from the solar arrays are distributed to the households subscribed through the pilot program. 

Brian Shew, associate program manager for Consumers Energy, said the company was motivated to participate in the program in order to help low-income customers, and to comply with an order from the Michigan Public Service Commission, which regulates energy companies in the state. The Commission ordered Consumers Energy to record its efforts in gauging interest of low-income customers in participating in its voluntary green pricing programs, as well its plans to accommodate low-income households. 

“Suffice to say, participating in the pilot was a no-brainer,” Shew said.

Unlike the previous two programs that allowed participants to remain subscribed for 15 or 25 years, participation in the Lansing program was capped at three years. While Consumers allowed participating households to extend their subscription at Capital Area Community Services’ discretion, it said the three-year limit would allow more qualified households to participate and benefit from the program. 

Additionally, all of the homes in this program were newly weatherized, a process which can take up to a year. 

Unlike the previous two programs, which limited enrollment to homes weatherized within a few years of the program, the Lansing area initiative can evaluate the effects weatherizing a home and participating in a community solar program can have on a home together, including monitoring changes in energy use and the amount of savings program participants receive. 

In an email to the Advance, Thomas said this program is continuing to onboard subscribers to the full amount of 50 households.

Discoveries and future developments

When reviewing the programs, the Clean Energy States Alliance, EGLE and other partner organizations offered observations on the program and advice for future pilots. 

In its report, the alliance encouraged groups designing community solar programs for low- to moderate-income individuals to ensure the size of the program could make a meaningful impact. 

While the first program initially planned to maximize participation, the report noted that with the program’s budget, this would have limited each participating household to one solar panel, leading to household savings as low as $30 a year or $3 a month. By adjusting the scope of the program, Cherryland was able to provide the 10 participating households an average of about $350 in energy savings a year. 

“It is important to structure a program so that [low-and-middle income] households achieve a meaningful reduction in their energy burden,” the report said.

The alliance also noted how the payment structure for the programs and the benefits were sized to the needs of each community. While average income was an important factor in determining the payment structure for each program, there were additional factors considered in each program that were discovered by engaging with the communities they served. 

The Clean Energy States Alliance also advised utilities to dedicate time and resources when creating a community solar program, ensuring that its billing system can handle adding credits to customers’ bills. Cherryland Electric Cooperative advised against overcomplicating the subscription process, with its own community solar contract being two pages long. 

While partnerships with state agencies are not always ideal or politically possible, the alliance also noted how partnerships with state energy agencies can play a pivotal role in encouraging community solar programs and ensuring their success. In addition to coordinating partnerships within the three pilot programs, EGLE provided funding to the pilot programs, drawing from federal funds as well as its own energy budget. 

Alongside recommendations from the Clean Energy States Alliance, EGLE is also developing a Michigan Solar Communities Guidebook to provide guidance for creating large-scale community solar projects. EGLE is also considering how to expand the three existing pilot programs and whether to consider a fourth program under new conditions.

While Shew didn’t have anything to share on other upcoming equity-driven programs, the utility will file a biannual report with the Michigan Public Service Commission (MPSC) in the fall. Among other things this report is used to introduce programs to the MPSC. 

Cherryland Electric Cooperative will collaborate with Leelanau Energy and the Northwest Michigan Community Action Agency to provide 10 low-income households to receive a subscription to 10 solar panels for 15 years, Haworth said.

“It is a unique opportunity similar to like what we’re doing with EGLE,” Haworth said.

“We’re working directly with a township that has members that have gone through the community action agency’s weatherization program. The township through their [American Rescue Plan Act] funds are paying that community solar subscription for these members,” Haworth said.