Why is net metering bad for Michigan?

Recently there’s been a lot of talk in Michigan about “energy freedom.” It sounds like a good idea, doesn’t it?

Who doesn’t support freedom?

The challenge is, freedom is rarely as simple as it sounds, including energy freedom. This is a long read, but stay with us because understanding the complexities of net metering is important given that it has implications for every energy consumer.

So-called energy freedom is really an effort by a few groups in Michigan and some out-of-state special interest groups to keep an outdated policy—net metering—alive so people with private solar panels can continue using the grid without paying for it. The problem with this policy? It’s fundamentally unfair to anyone who doesn’t have private solar panels.

CHECK OUT OUR NET METERING CARTOON FOR A GOOD EXPLANATION OF WHY NET METERING IS

UNFAIR TO MANY MICHIGANDERS.

Net metering requires local energy companies to purchase excess electricity at retail rates from households and businesses that can install private solar panels. Private solar owners use the same infrastructure, aka Michigan’s electric grid, both to sell their excess electricity and to access supplemental electricity from the grid when their solar panels don’t produce enough energy to meet their needs, such as after the sun goes down.

The cost of maintaining and improving the grid stays the same whether all Michiganders or only some pay for it.

Similar to friends renting a lake house Up North, the price of the rental stays the same whether 10 friends or 15 friends pitch in; however, the price per person goes down as the number of guests goes up.

With net metering, though, Michiganders with private solar are able to use the grid but not pay for it—just like some friends going on vacation without paying for the digs, essentially making it more expensive for everyone else.

Net metering upsets the balance between energy freedom and energy fairness. When it comes to resources we all share, like the grid, we all have a responsibility to help pay the cost. We all depend on making sure the grid works well and keeps getting stronger to support the changing ways we produce and consume energy.

Net metering is unfair in three important ways:

1. Households and businesses with private solar panels are getting a sweet deal at the expense of their neighbors and every other Michigander who doesn’t have private solar. AMP believes people should have the freedom to install private solar if they can and want to. We also believe Michiganders should be free not to install private solar—for whatever reason—without being penalized with a higher share of the cost of maintaining the grid.
2. Not everyone can choose to install solar panels. Michiganders who live in multi-family dwellings or who live on fixed incomes usually can’t install private solar, which means net metering tends to benefit wealthier Michiganders. Private solar panel systems can cost a pretty penny too, with average cost of installation alone ranging from $15,000 to $29,000! Some homeowners’ insurance won’t allow private solar panels for safety reasons or impact on the resale value of the home. Small-business owners can also be limited in their ability to install private solar, either because they share office space with other businesses or don’t have the capital to invest in a commercial system. But even people who could install private solar but don’t want to shouldn’t have to foot the bill for those who do.
3. Freedom isn’t really freedom if it’s only available to some. Freedom is a value Michiganders hold very dear, but so is fairness. AMP believes our energy policies need to treat everyone fairly, and net metering simply doesn’t meet that standard. There are better ways to integrate more solar energy into our system—ways that make sure everyone gets to enjoy the benefits of this renewable power source.

The Bottom Line: Solar energy is good, but net metering? Not so much. This policy doesn’t effectively balance energy fairness and energy freedom. Some private solar advocates argue that solar power would die without net metering subsidies, but that’s simply not true. Sustainable large-scale solar projects, like universal solar investments from DTE Energy and Consumers Energy, are Michigan’s best bet.

Be sure to check out our net metering cartoon and share it with your friends!