Consumers Energy is soaking up the sun — that strange, glowing orb in the sky beginning to re-emerge after the long Michigan winter — for a sliver of its renewable energy obligations under the state’s 2008 energy law.
The company’s Experimental Advanced Renewable Program (EARP) pays residential and non-residential customers to produce electricity from solar energy and deliver it to the grid.
About 100 customers, ranging from homeowners with small solar installations to businesses with larger operations, are now generating about 2 megawatts of electrical capacity that’s sold to the utility.
Purchasing that electricity helps Consumers Energy meet Michigan’s renewable energy standard, which requires that 10 percent of the state’s electrical supply come from renewable sources such as solar, wind, biomass and hydro by 2015.
About 5 percent of the electricity Consumers Energy supplies to customers already comes from renewable sources. The company is in the process of doubling that total, which means adding nearly 650 megawatts of renewable energy capacity, mostly from wind. Though solar is a relatively tiny slice of the pie, it does earn the company extra renewable energy credits toward meeting the 10 percent goal.
The company launched EARP in May 2009 and has signed contracts to buy the relatively small amount of solar-generated electricity over a 12-year period. The goal is to investigate solar energy’s potential in Michigan’s often cold and cloudy climate while contributing to the broader renewable energy target.
“The EARP is like a real-time laboratory that will help the company determine the best technologies, techniques and manufacturers for solar installations,” said Keith Troyer, EARP coordinator and an engineer II. “That’s why we call it an experimental program.”
The experiment is a success so far, according to Dale Fisher, one of about 85 residential customers participating in EARP. Last fall, Fisher, a retired engineer, installed 16 ground-mounted solar panels at his home in Michigan Center near Jackson.
The 275-watt panels, roughly four by six feet, sit in two rows in front of Fisher’s barn and face south. Despite starting in Michigan’s coldest, darkest months, Fisher’s solar array produced more than 2,200 kilowatt-hours (kWh) of electricity from October to late March.
Fisher earns 52.5 cents for each kilowatt-hour of electricity his panels generate. The money has more than covered Fisher’s electricity bills and should help him pay the $25,000 up-front cost of the solar installation in about seven years, he said.
“I’ve always had an interest in alternative energy and energy efficiency,” said Fisher, who received a 30 percent federal tax credit on the cost of his solar installation. “The sun is a great resource. It’s just neat to be able to pull energy from the sun and produce a commodity that’s a necessity for people.”
Customers who signed EARP contracts before May 1, 2010, earn a residential rate of 65 cents per kWh and a non-residential rate of 45 cents per kWh. Those who’ve joined the program since earn 52.5 cents per kWh and 37.5 cents per kWh, respectively.
In 2009, Consumers Energy sold electricity for about 11.2 cents per kWh. The EARP rates were designed to help customers cover the up-front costs of solar installations and earn a reasonable rate of return, Troyer said.
About 15 non-residential customers participate in EARP, including the city of Greenville, which installed 46 kilowatts of solar capacity atop its city hall building and about 150 kilowatts of solar capacity on the roofs of three hangars at its airport.
Greenville received a low-interest loan for about $800,000 to purchase the solar installations from manufacturer United Solar Ovonic, which manufactures the panels in the city. The projects will produce enough electricity to help pay back the loan with its 12-year EARP contract. The panels, under warranty for 25 years, will then continue to produce free electricity for the city for years to come.
“We’re looking to keep energy costs low for the long run,” assistant city manager Cameron VanWyngarden said. “That required an up-front investment. But this program helped make that investment possible and we’re going to reap the benefits of it for years to come down the road.”
Greenville Public Schools also is participating in EARP and has installed more than 200 kilowatts of solar capacity atop a high school and elementary school. All told, the Greenville projects account for about 20 percent of the electricity generated in EARP.
“Greenville is our largest producer, it’s a real success story,” Troyer said.
Consumers Energy is no longer taking applications for EARP and has no plans to expand the program, Troyer said.
“We’re mostly interested in stepping back, assessing what we’ve learned and taking a look at how these projects function and how we can improve if we do it again,” he said.
“The value for the company is to get bonus renewable energy credits and see how solar will function in Michigan with snow, ice and hail and the amount of sun we get in a year. Also, all energy produced under EARP qualifies for bonus renewable energy credits which can be used to meet the company’s obligations under the state’s 2008 energy law.”
— Todd Schulz