The Michigan Public Service Commission (MPSC) released its annual Renewable Energy Standard report, revealing the modest if growing state of the Wolverine State’s solar sector.
Michigan generates 2.7% of U.S. electricity, ranking 11th among states. But it is a laggard in the solar market, according to the Solar Energy Industries Association. Michigan’s 107 MW of PV capacity in 2017 ranks it 31st in the U.S., but is only 0.2% of the national total of over 44 gigawatts (GW) of installed capacity. Within the state, only 0.1% of its electricity comes directly from the sun. SEIA expects the Michigan market to grow by 668 MW in the next five years
Under its Public Act 295 legislation, Michigan set a requirement that utilities procure 10% of their electricity from renewable energy by the end of 2015, with an increase to 12.5% for the years 2019 and 2020, going to 15% by 2021. In 2016, renewable generated electricity in Michigan reached 10.8% of retail sales. The eventual legislative goal is 35% generated by renewables and waste by 2025. There is also a ballot initiative calling for 30% renewable energy by 2030.
The MPSC report shows that renewable energy has been and is primarily wind power dominated, with solar powered electric generation at best reaching 1% of total renewable energy in some years, and usually falling below. Wind power generation is generally in 40-49% range. In nameplate terms, by February 2018, solar power would be about 3% of the 2,900 MW of renewable energy capacity, shadowed by wind power’s 69%.
The MPSC renewable energy plan of growth used a comparison of the cost of the various technologies against a benchmark of a new coal power plant, which was determined to cost $133 per megawatt-hour (MWh). The weighted average of the renewable energy technologies from 2009 through 2017 fell below this benchmark at $76.20/MWh, with wind coming in at $70.01/MWh and even solar at $121.27/MW, despite being in a relatively small market. Acquisition of renewable energy systems by utilities is financed by a charge that is compared against long term natural gas contracts, with the difference of the higher price of renewables charged to higher meter rates.
The MPSC report showed a considerable decline in the contracts charged for PV, though no data was apparently available past 2016 which likely would have shown even lower costs. For example, the 2 MW Consumers Energy Solar Gardens, approved in 2015 and installed in 2016, had residential ratepayers contracts for some or all of their electricity charged $0.199 to $0.243/kWh for up to a 15 year time period. PV electricity from Consumers Energy smaller scale systems installed in 2014 and 2015 were assessed at $0.199-0.243/kWh for nonresidential contracts and $0.243-0.249/kWh for residential. Small scale installations in 2012 were contracted at $0.375 nonresidential, $0.525/kWh residential and in 2010, $0.45/kWh non residential and $0.65/kWh residential. The earlier contracts had up to a 12 year span.
Detroit Edison numbers in their Solar Currents and other contracts were reported in different ways. Their 50 MW program, approved in 2015 and installed in 2016, reported a $113.52/MWh contract and installations approved in 2012 and installed in 2014 reported a contract of $3,741/kW. Another, earlier, large PV module contract was reported at $2/watt, with another initiative reporting a mixed contract of capacity and generation costs.