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Distributed Generation

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.


In 2023, Public Act 235 (PA235) was enacted which required utilities to update certain portions of their DG tariffs.  These specific sections included increasing the size of eligible DG program projects up to 550kW, and increasing the eligible generation capacity each customer is eligible to build up to 110% of customer’s electricity consumption for the previous 12 months.  Each utility will need to file an updated DG tariff to implement the requirements of PA235.

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 550 kW.. The project may generate up to 110% 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


MPSC Distributed Generation Program Blank Report

Distributed Generation and Legacy Net Metering Programs Report for Calendar Year 2021

Other MPSC Reports

DG program Issue Brief 

DTE DG program Issue Brief