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Homeowners don't like proposed changes to Michigan's net metering program

Aug 27, 2015

More and more people are putting up solar panels in Michigan. It's getting a lot more affordable to do it. And there's a payback when you get your monthly utility bill.

Craig and Sharon Goble's solar array at their home north of Bear Lake in Manistee County.
Credit David Cassleman/Interlochen Public Radio

But a bill in the state Senate could fundamentally change the solar program in Michigan, and it has some people worried. 

How "net metering" works in Michigan

Craig and Sharon Goble’s electricity bill looks different than most people’s.  

“What it shows is we used from our utility 415 kilowatt hours,” Craig Goble says, “but we actually generated 1,355 kilowatt hours, so right now, going into August, we’ve got a credit of $366.”

The Gobles live in northern Manistee County.

They’re one of about 1800 customers in Michigan enrolled in a program called net metering.

Here’s how it works:

The solar panels set up in the Goble’s front lawn make power, and they use that power to run their house.

If they have more electricity than they need, they sell the excess electricity to their utility company and it goes back into the grid. And when their solar panels aren’t making power, they buy electricity like anyone else.  

A threatened investment

The Gobles spent about $30,000 on the solar array. It's a big investment for two retired people living on fixed incomes, but Sharon Goble says they figured they’d make back the money they invested in about seven or eight years.

Sharon and Craig Goble in front of their solar array at their home in Manistee County.
Credit David Cassleman/Interlochen Public Radio

Senate Bill No. 438 could upend Michigan’s net metering program, however.

“We are hoping that, at the very least, they grandfather systems like ours in to allow us to continue based on what we had assumed the conditions would be when we installed it,” Sharon Goble says.

What's more, Craig Goble points out that they made their investment based on the net metering program before this new bill was proposed.

“That’s not a fair change,” he says.

Under the proposed rules, the Gobles wouldn’t be paid as much for the power they sell to the utility.

They’d be paid at the wholesale rate instead of the retail rate — a difference of about 10 cents per kilowatt-hour.

The Gobles say it would take them at least twice as long to break even on the investment.

But they’re even more upset about another change.

They wouldn’t be able to use any of the power they actually make themselves. They’d have to sell it all to the utility and then buy it back at retail rates.  

Solar power set up at Craig and Sharon Goble's home in Manistee County.
Credit David Cassleman/Interlochen Public Radio

The big utility companies in the state support this legislation.

Dan Bishop is director of media relations for Consumers Energy.

He says it’s about fairness.

“Right now there is a situation of some customers subsidizing other customers,” he says.

As Bishop sees it, people in the net metering program are not paying their fair share of the costs to maintain the grid.

A lot of money goes into power lines and transformers. Bishop says all the other customers are paying for that.  

But in Michigan, net metering accounts for a tiny amount of all retail sales in the state — 0.015%.

A fear of solar

Steve Corneli, a vice president at NRG Energy out of New Jersey, says this kind of pushback from utility companies is going on across the country.

He argues that people like the Gobles could one day pose a big threat to their business.

The fear for utilities is that they'll start to lose more and more people to solar, as their costs stay high, leading to higher rates for traditional customers.

“There are solutions to this that will allow solar to continue to develop and that will protect against the sort of worst case scenario that I think utilities are often afraid of, which is just their rates spiraling up out of control because fewer and fewer people are paying them,” Corneli says.

One solution, he says, is spreading out the costs among all the customers. Utilities would get the same amount of revenue, no matter if people use more or less power.

The state Senate committee working on the net metering bill could make changes to it early in September.