Michigan utility Consumers Energy is asking state regulators to let it try out a solar power purchase program that might be described as "feed-in tariff lite."
The utility has asked the Michigan Public Service Commission to approve an "experimental advanced renewable program" that would allow homeowners and businesses to sell their solar power to the utility at a set price.
That makes the plan similar to "feed-in tariffs" in European countries that have helped Germany become a world leader in solar installations (see Solar Prices Set in Germany) and have both boosted and wreaked havoc with Spain's solar market (see Spain Kicks Off New Solar Feed-In Tariffs).
In the United States, only the town of Gainesville, Fla. has so far taken up the idea, approving a proposal from the Gainesville Regional Utilities (GRU) in December that would pay consumers 32 cents per kilowatt hour for solar power they feed back into the grid (see Gainesville to Launch Solar Feed-In Tariff).
Consumers Energy is a much bigger utility, and it is proposing to pay more for solar power – 65 cents per kilowatt hour for residential customers and 45 cents per kilowatt hour for commercial customers this year, and 53 cents per kilowatt hour for residential and 38 cents per kilowatt hour for commercial in 2010.
But Consumers' proposal also is quite limited in scope, with a cap of 150 kilowatts per customer and a total program cap of 2 megawatts. It also would charge participants $25 a month, and is limited to 12-year contracts, versus Gainesville's program, which offers 20-year contracts.
The experimental plan is part of a much larger utility plan to meet Michigan's recently passed law that requires utilities to generate 10 percent of their power from renewable sources by 2015, said Jeff Holyfield, Consumers Energy spokesman.
The utility now gets about 4 percent of its power from renewable sources, and will have to bring about 900 megawatts of renewable generation online by 2015 to meet the new mandate, he said.
All but about 15 megawatts of it is planned to be wind power, he added. Still, another 2 megawatts of customer-generated solar power couldn't hurt the utility in meeting its mandated target.
"We want to see what the reaction in the marketplace will be," Holyfield said. The state commission has 90 days to issue an order on the plan, which was filed Feb. 17, he said.
Feed-in tariffs are praised by many renewable energy developers, but they have also been criticized for setting fixed prices for renewable power that may overheat markets if they are set too high or fail to lead to their goals if they're set too low.
Washington state lawmakers earlier this month proposed a feed-in tariff for solar and wind power, and the California Energy Commission in December recommended that the California Public Utilities Commission (CPUC) look at a feed-in tariff for renewable energy projects between 1 megawatt and 20 megawatts in the state.
The CPUC also approved a feed-in tariff program in early 2008, but it applies mostly to solar energy systems installed at public water and wastewater facilities. Other customers only get reductions on their power bills for excess power sent to the grid, rather than a set price per kilowatt hour (see Gainesville Considers German Solar Tariff).
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