Proposals in Lansing would alter existing net-metering laws. Envireonmentalists and proponents of expanded use of renewable energies believe if the measures become law, it will set back gains being made in solar energy growth. In this week's "Issues of the Environment," David Fair talks with Solar Ypsi founder Dave Strenski about the local implications.
Currently, under net metering, those who have invested in renewable energy (solar, wind, etc..) and produce more power than they use receive the full retail value for the excess energy, but Senate Bills 437 and 438 propose to change this arrangement, reducing the payments for excess power to the “wholesale” price.
Utilities like DTE argue that net metering is bad for business because those who produce excess power and sell it back to the company are using their infrastructure free of charge. Why should they pay a premium for energy produced in small installations? They feel they should pay the same rate for all power that feeds into the grid, regardless of the source.
Net metering obviously benefits the budding solar power industry and other renewables, and those in favor of keeping net metering make several arguments against the changes proposed:
- that the excess power does not traverse the grid (and does not cheat the utility out of infrastructure costs), but rather the extra power goes to the nearest geographic need.
- that lower compensation for excess power will significantly increase the time it takes for costly, small-scale renewable energy systems to become profitable, potentially jeopardizing the renewable energy industry just as it gets off the ground.
- that privately owned solar panels are actually doing a service to the grid; they might even be able to eliminate brownouts and blackouts since they are most effective on bright, sunny days--days when peak load is highest. The power they harness offsets the need to build extra capacity into the grid to handle days with an excessive peak load due to air conditioning.
- Assuming the same amount of energy is not purchased from the utility, why should homeowners and businesses who invest in energy efficiency (for example, saving utility costs by using LEDs) benefit differently than those who invest in renewable energy?