Residents wanting solar panels face stumbling blocks

Editor’s Note: This story has been corrected. We previously wrote that Hancock’s new solar and wind ordinance entirely prohibits industrial solar, but that isn’t the case. It restricts industrial solar to I-1 industrial districts and requires permits. We apologize for the confusion.

Renewable energy advocates say that homeowners can save money on electricity by installing solar panels, but there are stumbling blocks to using solar panels in the Keweenaw area. They include state distributed-generation regulations, net metering caps set by electric utilities and local zoning ordinances regulating installation of solar panels.

Net metering is an electricity billing tool that uses the electric grid to “store” excess energy produced by an individual’s solar panel system. Under net metering, the value of the energy produced by solar panels that a homeowner doesn’t use is credited back to their electric bill.

Net metering was designed to encourage the adoption of solar energy.  The system was pioneered in the United States as a way to help use solar and wind to provide electricity. It enables customers who generate their own power to receive credit for the electricity they contribute to the grid.  

A report by the Michigan State University Extension Service calls net metering “the gold standard” for solar billing in the U.S. According to the report, it was one of the main reasons the number of solar installations in Michigan quintupled between 2011 and 2018.

In 2018, Michigan’s Public Service Commission replaced net metering with a distributed generation program. Using distributed generation, electric utilities can credit less to residents who send their excess solar energy to the grid.

The Upper Peninsula Power Company (UPPCO), Detroit Energy (DTE), Consumers Energy and some other electric utilities and co-ops in Michigan are using the distributed generation program.

Solar Caps

State law does not prevent electric companies from setting caps on the amount of solar energy generation eligible for credit,

UPPCO, which serves the Keweenaw peninsula, recently raised its cap to 3.5%. That means that the most a customer with solar panels can contribute to the grid for credit is 3.5% of peak demand or load and capacity. 

Peak demand is the highest amount of electricity demand within a particular period of time. Load is the total electrical power being removed by the users of the grid. Capacity is the maximum output an electricity generator can physically produce, measured in megawatts.

There’s a thornier problem facing homeowners who want to install solar panels in our area. They say they have been told that the cap has been met in the UP as a region, so no more solar panel installations are eligible for the credit.

UPPCO spokesperson Brett French says that is not true.

“We have not reached the cap, and we are accepting applications,” he said in a phone interview.

Dr. Elizabeth Benyi

Dr. Elizabeth Benyi, who lives near Calumet, talked to her neighbors and got a few of them interested in installing solar panels.

“But again, when it came to permitting, they were denied because of the cap on solar,” she says.

An osteopathic physician and surgeon, Benyi lived in L’Anse for 10 years before she moved to Calumet. She wanted to get solar panels installed on her house in L’Anse. She says Blue Earth Solar tried to get permits for the installation but were refused. They were told that the solar cap had been met in the UP, so no more solar projects that tied into the power grid were allowed.  

Pending Legislation

Benyi has been working for two years to help get legislation passed to get rid of the solar cap. First introduced in 2021 by Greg Markkanen, state representative for the legislative district that includes the Keweenaw, it would have eliminated the solar cap.

“But to no avail,” Benyi said.

New bills recently introduced by both Representative Markkanen and State Senator Ed McBroom, who also represents the Keweenaw, would remove the cap on solar energy credits.

Michigan State Rep. Greg Markkanen at a town hall event in Ontonagon. Photo by Joshua Vissers.

“I am very passionate about this issue,” said Markkanen in a phone interview. “We need to lift the cap and give people a choice. Many states near Michigan don’t have a cap.”

McBroom agrees.

“The system that we have in this state is rigged against controlling costs for individual consumers,” he said in a phone interview. “That’s unfair. The system isn’t working to the benefit of the people. Our high electric bills are stifling our economy.”

“The cap does discourage people from installing solar,” says Allan Baker, who has installed solar panels on the sides of the apartment building he owns in Houghton.

Senator McBroom has introduced two bills in the Michigan Senate. One would remove the solar cap. The other would bring back net metering and make it easier to establish community solar systems.

“Small-scale, local solar projects will be particularly useful to residents, providing an opportunity to independently produce energy for themselves and their neighbors, and providing savings on energy bills for those who subscribe,” the senator said.

According to the Michigan Department of Environment, Great Lakes and Energy, Michigan currently does not have enabling legislation for community solar, so community solar programs in Michigan must be developed and managed through a local electric utility.

Escanaba and L’Anse have both established community solar systems. Those municipalities are served by their own, local electric utilities, not by UPPCO, Senator McBroom pointed out. L'Anse is served by L'Anse, Michigan Electric Utility, a municipally-owned organization.  The City of Escanaba owns its own electric utility.

The senator thinks the legislation removing the cap and enabling community solar will pass. He’s less confident about bringing back net metering.

“The big utilities like UPPCO have powerful lobbies,” he explained.

Zoning Issues

As if caps on solar weren’t enough of a roadblock, there are zoning ordinances that severely regulate installation of solar panels.

The Michigan Zoning Enabling Act requires all zoning to be based on a master plan. The master plan therefore establishes the community’s formal policy position on solar energy development. Roof-mounted solar panels are allowed in most zoning jurisdictions in Michigan, according to an MSU Extension Service report.

The City of Hancock just passed a zoning ordinance regulating the development and use of solar and wind energy. The ordinance permits private, residential solar but limits “industrial” solar – systems designed for sale of power generated to off-site consumers – to the I-1 industrial district. This includes solar farms or gardens, which are community systems.

Calumet and Stanton Township have no zoning ordinances prohibiting solar panels, although Stanton Township Supervisor Marty Rajala said, “My personal opinion, not the township’s, is that anyone dumb enough to place a solar panel in our area, where the sun shines 15% of the year, should be allowed to throw their own money away and not be subsidized by the government.”

Houghton permits solar panels, subject to the city’s zoning ordinance, according to City Manager Eric Waara.

Adams, Franklin, Portage and Chassell Townships did not respond to questions about zoning ordinances regulating solar panels.

All About Money

What’s causing the ongoing conflict that has the solar industry and environmentalists on one side and utility companies and local zoning boards on the other?

It seems to be all about money.

“The cap has always been an artificial construct given to the utilities to help them make more money,” says Senator McBroom.

“UPPCO doesn’t have the best interests of the people at heart,” Representative Markkanen remarked. “It is a private, for-profit company with its eye on the bottom line and making money for its shareholders.”

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