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Continued growth but also contention in Michigan's rooftop solar industry

Posted at 8:40 AM, Mar 25, 2021
and last updated 2021-03-25 08:40:20-04

(WSYM) — The rooftop solar industry in Michigan has been growing over the past several years and overall costs for homeowners are going down, as they are around the country.

But with no state tax credits and the federal credits getting smaller, we wanted to know: how much bang do you get for your buck?

According to the Solar Energy Industries Association, Michigan ranked 26th overall in the country in 2020 for being generally solar friendly, trailing behind neighboring Midwest states like Illinois which ranked 17th, Ohio which ranked 18th, and Wisconsin which ranked 19th. Indiana ranked below Michigan at 32nd.

Michigan Solar Friendly

According to SEIA, Michigan's overall prices for solar energy have dropped around 45 percent over the last five years.

“I would say easily we’re shaving off $60 a month," Bob Chapman told Action News outside his Southfield home, where he had solar panels installed back in 2017.

Chapman paid around $13,000 for his 4 kWh system, which really ended up costing under $10,000 with the federal tax credit at the time, which was 30 percent; it's now down to 26 percent.

Chapman shared his recent DTE bills with us, which show that from October to May of 2020 his energy bills were less than $10 per month, which is just a meter charge.

In all of 2020 he paid $250 for electric.

“For six months of the year my bill is $9," he said.

Chapman, like all rooftop solar users, utilizes his energy company's grid almost like an energy bank; he stores excess energy until he needs it, then DTE gives him a credit on his bill.

State limits on how much utility companies like DTE or Consumers Energy are required to give back to users is threatening the continued growth of Michigan's solar industry, said state Rep. Greg Markkanen, a Republican representing several counties in the Upper Peninsula.

“They shouldn’t be limited to 1 or 2 percent as a cap," he said.

Markkanen is pushing for the cap to be gone altogether in a bill he just introduced in the State House, HB4236.

Utility companies have concerns with the measure, like "the absence of a solution to address the continued shifting of costs from customers with rooftop solar systems to customers without it," wrote DTE's Vice President of Regulatory Affairs Camilo Serna in a Feb. 17 testimony on the measure.

DTE has promised net-zero carbon emissions by 2050.

"There is probably a commonly held view that private solar customers utilize the grid less than a typical residential customer. In fact, they rely on the grid more. Distributed generation customers not only draw power from the grid, but they also export power to the grid. The constant fluctuation in their demand for power results in their utilization of the grid at a level 23 percent higher than the average residential customer," Serna said.

"Distributed generation customers also place a “call” on the grid, requiring the grid to be ready to meet their demands at any time of the day and always during the night... we feel it’s fair to ask them to pay for their use of the enabling infrastructure, Serna also said during his testimony to state lawmakers.

You can read Serna's full testimony here:

DTE Testimony by WXYZ-TV Channel 7 Detroit on Scribd

“Our neighboring states have no cap whatsoever. It opens up the industry, it allows for growth," Rep. Markkanen told Action News.

For home solar users, there's still some level of sticker shock said Seger Weisberg with Strawberry Solar, a company based in Detroit. Almost all of the cost for home solar panels is upfront.

“One of the positive things that I’ve seen in the time that I’ve been in solar is that those costs are going down, but it is a newer technology with equipment," Weisberg said.

Up front costs continue to pose a problem in connecting lower income home owners to solar opportunities, something Strawberry Solar is working to change through a partnership with Cass Community Social Services.

They installed rooftop solar systems on Cass Community Social Services' Tiny Homes in Detroit, which are rent to own properties between 250 and 400 square feet.

“We’ve been developing it around early 2018 and we actually have 5 or 6 more going in this year," Weisberg said.

“There’s sort of limited roof space with the Tiny Homes so we were able to put up ground mount systems, single pole mount systems," he said. "It might not offset all of somebody’s electricity but we’re hoping at least 50 percent of an electric bill.”

Meanwhile at Chapman's home in Southfield, he estimates his overall system will have paid for itself in twelve years based on his energy savings.

His main driver in going solar was an environmental one, he said.

“During a lot of the year when I’m flipping on a light switch I’m not putting any Co2 into the air," he told Action News. "We have five grandchildren. It’s an investment for them as far as I’m concerned.”