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DTE, Consumers Energy support raising rooftop solar cap

Candice Williams
The Detroit News

DTE Energy and Consumers Energy announced together Tuesday their support for raising — but not eliminating — the cap on rooftop solar, a move that would increase the amount of solar power the utilities can purchase from consumers with rooftop solar panels.

Since 2016, under a state energy law there has been a 1% cap on how much solar power DTE and Consumers may purchase based on the utilities' average peak load for the past five years.

Workers install solar panels on the roof of a home. DTE Energy and Consumers Energy favor raising a cap on how much solar power utilities can buy.

“We’re all-in on solar energy,” Brandon Hofmeister, senior vice president of governmental, regulatory and public affairs at Consumers Energy said in a statement Tuesday. “Together, we’re proposing a more inclusive solution to raise the cap on solar that prioritizes the needs of every customer in Michigan.

"We believe through a legislative compromise we can get the best prices for our customers and keep future cost increases from new generation well below the rate of inflation," Hofmeister said. "This is great for customer pocketbooks, great for the planet, and great for the solar industry in Michigan.”

The announcement comes as House Bill 4236, introduced in February, looks to remove the 1% cap, which the utilities say creates a tax on utility customers in favor of a small number of private solar users who can afford rooftop installations. 

The utilities are instead looking to raise the cap on rooftop solar "while addressing the subsidy in a responsible manner that is inclusive of everyone."

Owners of solar panels sell their energy back to the grid at above-market rates. The utilities say that solar customers pay about 23% less than the average customer, but they also use the grid more. The higher the cap, the utilities say, the higher the bills for the average customer. 

The utilities did not say Tuesday an ideal percentage for a cap increase.

Not all are in favor of the announcement Tuesday.

Environmental advocates say the utilities are using the cap issue as leverage to lower the amount of credit customers receive for sending excess energy back to the grid.

“They want changes to the pricing structure for small-scale solar that are punitive and would make it uneconomic for anybody to put solar on their roofs,” said Charlotte Jameson, program director for the Michigan Environmental Council.

Consumers Energy and DTE Energy say customers in their service areas are expected to pay $100 million in subsidies for private solar and that rooftop solar customers reduce their bills by more than what Michigan saves overall.  They contend that solar customers pay about $30 less a month than their "fair share."

The Utility Workers Union of America, a union representing workers at both utilities, expressed its support of a cap increase and its opposition to eliminating it under the recently proposed bill. 

“The recent House proposal falls short on inclusivity and affordability," said Jim Harrison, the union's director of renewable energy. “If passed, millions of people stand to pay more for electricity without seeing the benefit. There are opportunities to share the benefits of renewable energy in a safe and affordable way. We look forward to working with lawmakers and other stakeholders to find the best solution to fight climate change, create good-paying jobs and support all Michiganders.”

Twitter: @CWilliams_DN