In 2016, new laws were enacted requiring the MPSC to phase out the net metering program and create a new distributed generation program. The MPSC adopted a distributed generation program based upon the inflow/outflow billing mechanism. Inflow is the electricity the customer uses from the utility distribution system. Outflow is the electricity generated by the customer's distributed generation project (such as solar panels) that is not used on-site and is instead sent out on the electric grid. This mechanism measures and prices a distributed generation customer's incoming and outgoing electricity flows separately and establishes a method for consistent and appropriate cost-of-service billing.
The legacy net metering program continues to be available to customers until the new distributed generation program goes into effect for their utility. Because the new distributed generation program is reviewed and approved on a case-by-case basis, each utility will have a different beginning date for the program. DTE Electric and Upper Peninsula Power Company are the only utilities that have implemented the new distributed generation program inflow/outflow billing mechanism. The remaining utilities are continuing to offer the legacy net metering program. For customers already participating in a utility's legacy net metering program, the law provides for 10 years of legacy net metering starting from a customer's enrollment date before the transition to the new distributed generation program inflow/outflow billing mechanism.
The distributed generation program is for customers who install certain on-site, grid-connected, renewable generation. Qualifying renewable generation projects must be no larger than 150 kW; however, methane digester generation projects as large as 550 kW may also participate. The project may generate up to 100% of a customer's annual electricity consumption. Prior to operating a distributed generation project, a customer must properly interconnect the project with the utility. The MPSC has established electric utility interconnection and net metering standards.