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Critics say a low-income solar program recently announced by DTE Energy expands the definition of “community solar” and will bypass participants.
The program is the result of an agreement signed by DTE Energy and a dozen Michigan environmental groups that see it as a positive step towards expanding solar access in low-income areas. Others, however, say it will rob customers of the financial benefits of owning solar power and greatly benefit the utility.
“It hardly comes close to the characteristics of a community solar program,” said Rob Rafson, regulatory witness for the Great Lakes Renewable Energy Association, which was the only group to oppose the settlement. “It’s crap… and it’s aggressively positive for DTE in every way.”
A spokesperson for DTE Energy said in a statement that state regulators “had found no merit in any of GLREA’s claims” and noted that the Michigan Public Service settlement order Commission refers to the program as community solar energy.
The regulation arose out of a DTE proposal for customers who use the company’s Voluntary Green Pricing program, which allows them to pay a premium for clean energy to subsidize low-income people who don’t. not the means. When environmental groups opposed the plan before the commission, the DTE began settlement discussions.
The parties agreed that DTE would build three solar installations of at least 250 kilowatts in Highland Park, River Rogue and Detroit, and establish a program in which low-income customers in those cities could subscribe to receive electricity from the communities. facilities, as well as a -30 $ per month credit. A board of three low-income residents and representatives from a nonprofit, small business, and DTE will help oversee and implement the program.
DTE will only contribute $ 300,000 to each facility and solicit charitable donations to pay approximately 70% of the costs of the project. The utility says it will not get any profit from the program, but will own the facility, which is a departure from most community solar models across the country.
Ownership of the assets by DTE eliminates a major benefit to the community, said Will Kenworthy, Midwestern regulatory director for advocacy group Vote Solar.
“In my head I think it’s ‘utility owned community solar power’ with community based elements, but obviously it’s not community solar because that the utility owns the assets, ”he said. “This means it doesn’t give the community the wealth creation opportunities that community ownership models provide. ”
Vote Solar has signed the deal and plans to help implement the program, but Kenworthy said the group agreed with many of the shortcomings identified by critics of the project.
Highland Park’s environmental group Soulardarity decided not to sign the settlement due to the ownership agreement and reliance on charitable solicitations to fund much of the program. The company, which raked in a $ 30 million windfall during the pandemic and recently gave its CEO a raise worth more than the cost of the new program, is expected to pay for it in full, said Jackson Koeppel, executive director of Soulardarity. .
“Fundraising efforts will cover almost the entire cost of the program, so DTE claims it cares about low-income people but doesn’t fund it, and that doesn’t make sense,” he said. he declares. “We believe shareholders should pay because they can afford it.”
The DTE will also compensate low-income subscribers less than it compensates regular rooftop solar generators. The company argued during negotiations that the compensation rate for low-income subscribers is what the rate should be for all owners of rooftop solar services in the territory, Koeppel said.
And while the program’s low-income subscribers will be compensated for about 3 cents per kilowatt hour, DTE will sell them electricity for about 20 cents per kilowatt hour, Rafson said.
Koeppel called the formula used by the utility to value the energy generated by the facilities as “deeply flawed,” and accused the arrangement of creating a financial advantage for DTE.
“There’s a delta between what they should pay households and what they actually pay, and that delta goes somewhere – if not the shareholders, then the company,” Koeppel said.
Rafson noted that DTE will receive a 26% tax credit and that it will likely hire a subsidiary that will charge above the market rate for construction. The sum of those arrangements will amount to a DTE benefit of around $ 47 million, Rafson said, while the company views the project as a charitable act.
In its order, the MPSC said the agreement “provides for community participation.”
“The community solar pilots included in the partial settlement agreement represent constructive steps to provide a community solar option to DTE Electric customers who might otherwise not be able to participate in [clean energy] programs, ”he wrote. It also opens the door to further experimentation with ownership models when the program is revised in the years to come.