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MPSC report on renewable energy, distributed generation finds utilities meeting 2021 goal, making progress toward 35% goal

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Renewable energy grew by nearly 15% between 2021 and 2022, and each of Michigan’s regulated electric utilities met the state’s required 15% renewable portfolio standard by 2021, according to the MPSC’s Status of Renewable Energy, Distributed Generation, and Legacy Net Metering in Michigan report issued today.

Under Public Act 295 of 2008, Michigan electricity providers were required to meet a 10% renewable energy standard based on retail sales by 2015. Public Act 342 of 2016 raised the requirement to 12.5% in 2019 and 2020 and to 15% by the end of 2021. The report finds all electric providers subject to the standards met the goal.

PA 342 set a goal for utilities to meet at least 35% of Michigan’s electricity needs through renewable energy and energy waste reduction by 2025. The report concludes the percentage towards that goal was 25% in 2022, up from 23% in 2020.

The report, whose release today coincides with Clean Energy Week in Michigan, found that all electric utilities with rates regulated by the MPSC will maintain the 15% standard after 2021, and most electric providers not regulated by the MPSC will voluntarily meet the standard for 2022 and beyond. The report finds that renewable energy performance under the standard grew from 14.1% in 2021 to 16.2% in 2022, a 14.9% year-over-year increase. The report further details that wind energy accounts for 59% of all renewable energy credits used to comply with the 2021 standard.

By the end of 2022, regulated electric providers had approved renewable energy projects accounting for about 6,000 megawatts (MW). Factoring in providers not regulated by the MPSC, it’s estimated that the state will have more than 8,000 MW of operational renewable energy by the end of 2026.

The new report replaces the MPSC’s previous annual Report on the Implementation and Cost-Effectiveness of the Public Act 295 of 2008 Renewable Energy Standard, with the sunset of the requirement in 2022.

The report combines and summarizes renewable energy activities related to the Renewable Energy Portfolio Standard pursuant to PA 295 of 2008, as amended by PA 342 of 2016; Voluntary Green Pricing Programs (VGP); Integrated Resource Plans (IRP); Public Utility Regulatory Policies Act (PURPA) resources; and Distributed Generation and Legacy Net Metering Programs.

Among other highlights in the report:

  • The number of customers participating in Michigan’s distributed generation (DG) program increased to 19,571 from 14,262 between 2000 and 2023. The number of DG installations increased to 19,778 from 14,446 during that period, an increase of 37% over that time period (the number of installations exceeds the number of customers as some customers have multiple installations). Several utilities have increased the caps on participation in the DG programs, measured by the percentage of average in-state load: Consumers Energy Co. (4%), DTE Electric Co. (6%), and Upper Peninsula Power Co. (3%). All regulated utilities except for Indiana Michigan Power Co. have room remaining for additional residential customer participation.
  • Voluntary green pricing programs, which allow customers to designate how much of the electricity they use is to be generated from renewable energy sources, continue to grow and are a significant driver of growth in renewable energy in Michigan. The number of VGP customers exceeded 100,000 for the first time in 2023, an approximately four-fold increase since 2018.
  • Wind has been the dominant renewable energy source in Michigan owing to its continued low costs, but rapid decreases in solar costs and siting concerns for wind farms have spurred a transition toward solar. This has been complicated by solar supply chain issues and inflation, which have contributed to slight price increases since late 2021.

The report also details the amount of renewable energy additions approved in recent utility integrated resources planning.

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