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Michigan's distributed generation program capacity grew 37% in 2020 and added 2,400 customers, MPSC report finds


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Participation in Michigan's distributed energy generation program grew in 2020, with program capacity increasing 37%, the Michigan Public Service Commission's annual distributed generation (DG) report found.

Since 2006, participation has grown every year. According to the MPSC's 2020 Distributed Generation Report released today, the program added more than 2,400 new customers, with the total rising to 10,553 and 10,718 installations. That's up from 8,147 customers and 8,331 installations in 2019. Some customers have multiple installations, so that number exceeds the total number of customers.

At the end of 2020, the total electric generation capacity of the installations was about 90,989 kilowatts (kW), an increase of 24,561 kW and 37% over the previous year. While growing, DG projects account for a small portion of total retail electricity sales in Michigan, at around 0.1%.

Through Michigan's DG program, customers generate their own electricity, primarily through solar and wind projects, to reduce their electric bills by reducing the amount of electricity they purchase from their utility. State law permits utilities to limit participation in the program at 1% of their five-year average peak electricity load, with half of this amount allocated to smaller, residential-sized systems, and the other half for larger projects. DTE Electric Co., Upper Peninsula Power Co. (UPPCO) and Indiana Michigan Power Co (I&M) have had Commission-approved DG program tariffs that replaced their net metering programs after the 2016 update to Michigan's energy laws, and they were joined in 2020 by Consumers Energy Co. DG program tariffs proposed in 2021 by Alpena Power Co. and Northern States Power Co. remain under review by the Commission.

The report covers DG enrollment in 2020 but also notes several developments that have happened since the end of 2020:

  • Consumers Energy's current capacity of the Category 1 program under its voluntarily expanded program cap is 53.09% enrolled as of early August 2021, with availability for 35,101 kW of projects before the expanded cap of 74,822 kW is reached. When adding the current pending Category 1 projects to current program capacity, the program will be 60.72% enrolled, with availability for 29,388 kW of the expanded 74,822 kW cap. Consumers' Category 2 program has 20,832 kW out of the 37,411 kW current capacity available, and when adding pending Category 2 projects to the current capacity, 17,836 kW out of the 37,411 kW capacity is available.
  • UPPCO, whose ownership was transferred to Axium UP Holdings LLC, voluntarily agreed to increase its distributed generation program size from 2% to at least 3% of its average peak load. This increase will maintain the same allocations between Category 1, 2, and 3 program size percentages. Through August 1, 2021, UPPCO's Category 1 program was 73% enrolled, with availability for 548 kW of projects under the expanded cap of 2,036 kW and the Category 2 program had 737 kW of 1,017 kW capacity remaining.
  • DTE Electric reports that program size had reached 35.7 megawatts (MW) participating out of a program cap of 55 MW for Category 1 projects (approximately 65% subscribed), and 6.2 MW out of 27.5 MW participating for Category 2, or 23% enrolled. DTE Electric has seen 2021 additions of approximately 5.5 MW in Category 1 projects and approximately 0.4 MW in Category 2 projects.

DG customers are increasingly pairing their generation battery storage. DTE Electric, Consumers Energy and I&M reported a combined 769 DG-enrolled customers with battery storage at a total capacity of 4,203 kW.

Other report highlights:

  • The state's two largest utilities, Consumers and DTE, account for 91% of the program's capacity.
  • Other utilities also had significant amounts of space available in their programs for up to 20 kW at the end of 2020: Alpena Power, 72%; I&M, 54%; Upper Michigan Energy Resources Corp., 68%, and Northern States Power, 80%.
  • Solar projects accounted for 97% of DG installations, significantly outnumbering wind turbine or hydroelectric projects.
  • Every county in Michigan now has at least one DG installation.

Michigan's 2016 energy laws called for the MPSC to transition to a distributed generation program from a net metering program. Once a utility's DG program is in effect, no new customers can join the net metering program, but current net metering customers can continue under that program's guidelines for 10 years from the day they enrolled. The net metering program is referred to as the legacy net metering program.

Read the 2020 Distributed Generation Program Report.

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