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Midwest Community Solar Policy Guide for Asset Owners & Developers (MI, OH, WI)

Everything you need to know about emerging community solar legislation in Michigan, Ohio, and Wisconsin on proposed eligibility rules, crediting mechanism and other important market details, created by Perch’s internal policy team. We help asset owners navigate the growth of community solar in markets across the country, and as new laws are considered and passed, Perch will provide updates and perspective on how it impacts your business.

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Michigan

The Michigan legislature is currently considering two bills that would create its first policies on community solar (CS). House Bills 4715 and 4716 have bipartisan lead sponsorship and were introduced last year in 2021. The legislature will be taking a break after the end of June and will resume in September.

Primary sponsors

  • Rep. Michele Hoitenga (R), Rep. Rachel Hood (D)

Committee assignment

What's in the bills?

  • House Bill 4715 instructs the Michigan Public Service Commission on financing bill credits, creating LMI mechanisms for participation in CS, preventing utilities from penalizing CS subscribers, transferability/portability of CS subscriptions within a utility’s service territory, establish a bill credit rate that promotes “robust” development of CS facilities and robust access to them, amongst other provisions.
  • House Bill 4716 outlines the requirements and specifications for a CS facility
    • Project requirements:
      • Maximum nameplate capacity of 5MW
      • Must be connected to the grid
      • Does not have an interconnection located within 1 mile of the point of interconnection of a solar facility under the control of the same entity
      • Farm must produce bill credits in proportion to subscription size
    • Subscriber requirements:
      • Must have at least 3 subscribers
      • No single subscriber can take up more than 40% of total project capacity
      • Minimum of 60% total capacity allocated to subscribers with max 40KW subscriptions – within 1 year of the site coming online
      • Subscribers are subject to a 25-year generation agreement
  • Legislative Guidance

Next steps

The Coalition for Community Solar Access (CCSA) is a national group of businesses and nonprofits focused on achieving widespread access to clean, local energy. Perch is a leadership level member of this coalition.

Currently, the local Michigan coalition in tandem with CCSA is working to get the bill passed favorably out of the Energy Committee and working to have a companion bill in the state Senate.

Ohio

To encourage the development of community solar and to ensure the equal participation of all consumers, Ohio representatives have introduced a bill, HB450.

Primary sponsors

  • Rep. Brian Baldridge (R), Rep. Laura Lanese (R)

Committee assignment

What's in the bill?

Proposed structure:

  • Allows for development of 2GW of non-utility private projects
  • 1GW can be developed on distressed sites: brownfields, waste management sites – projects on distressed sites can be up to 45MWs
    • 500 MWs of distressed allocation must be distributed to projects built in the Appalachian region of the state

Project requirements:

  • Maximum nameplate capacity of 10MW
  • No two projects (owned by the same entity) can be located within 1 mile of each other
  • Projects must demonstrate sufficient progress in the interconnection process and hold all non-ministerial permits

Subscriber requirements:

  • Minimum of three subscribers
  • No single subscriber can take up more than 40% of total project capacity
  • Minimum of 60% total capacity allocated to subscribers with max 40KW subscriptions
  • Any customer of an EDC, located within the utility territory can sign up
  • Subscribers are eligible for net crediting just like rooftop sited solar
  • Subscribers share not to exceed 120% average annual electric usage
  • Volumetric credit mechanism

The bill also considers a few other rules that are familiar to community solar legislation in other states. If passed, the commission has 6 months to create rules, the rules for transferring subscriptions must be easy if a customer is still moving within the utility’s territory, and utilities must share usage data with customers and competitive suppliers in a cost-effective, timely, efficient manner.

Next steps

CCSA is focusing on working with the bill’s sponsors to get the bill through its final committee hearing and onto the House floor. There does not appear to be a companion bill in the Senate yet. CCSA is looking to expand the coalition of support.

  • Proponents: Ohio Conservative Energy Forum, Citizens Utility Board of Ohio, various environmental groups
  • Opponents: AEP Energy (major utility in Ohio)

Wisconsin

Wisconsin is bordered by two states with expanding community solar markets, Minnesota which has the largest installed capacity of any state, and Illinois which is ramping up its community solar policy with a focus on LMI. Legislators in Wisconsin are noticing the savings benefits, and advocacy for community solar is growing beyond the usual voices of the solar industry and environmental groups.

Though a community solar bill, LRB 1902 had sponsors in the Assembly and Senate, Wisconsin’s legislature ended early this year in March for the campaign season. Legislation on any subject likely won’t start until January 2023 unless a special session is called.

Additionally, the Wisconsin Assembly sponsor is not running for reelection and therefore will not sponsor the legislation next year when his term is up. The Senate sponsor Sen. Duey Stroebel (R) remains.

What's in the bill?

Project requirements: 

  • Maximum nameplate capacity of 5MW
  • No two projects should be located within 1 mile of each other (owned by the same entity) measured from the point of interconnection
  • Require a subscriber organization to satisfy interconnection process benchmarks, demonstrate site control, and obtain all non-ministerial permits for a CS facility before coming online

Subscriber requirements: 

  • Minimum of three subscribers
  • No single subscriber can take up more than 40% of total project capacity
  • Minimum of 60% total capacity allocated to subscribers with max 40KW subscriptions 
  • Any customer of an EDC, located within the utility territory can sign up
  • Subscribers can have multiple subscriptions 
  • Excess credits rollover indefinitely
  • Subscribers may receive a subsidy from this state for which generating electricity from a renewable energy resource is a criterion for eligibility (i.e. customers cannot have rooftop solar/net metering)

Credits: 

  • The commission shall establish an applicable bill credit rate
  • An electric utility shall provide a bill credit proportional to the output of each subscriber's share
  • Customers receive credits for 25 years from the date of operation
  • Credits must be applied within one billing cycle from when credits are generated
  • The host can accumulate credits which are not allocated to subscribers each month
  • Annually the subscriber organization must tell the utility how to redistribute any accumulated banked credits – credits will be paid out based on the subscriber’s retail rate.

Other: 

  • Transferable subscriptions within utility territory
  • Each facility needs an online portal for administrators to communicate subscriber list updates The utility will provide each CS facility with a monthly standardized report of the total value of bill credits generated and the bill credit amount applied to each subscriber.
  • The RECs are retained by the project owner
  • No additional incentives available 
  • No new CS facilities can be established after 6/30/31

Next steps

Gaining an Assembly sponsor is the first step, but legislator education on community solar remains a priority. A coalition of solar industry groups, farmers, developers, and healthcare has coalesced around the bill and is seeking to expand its base of support.

Resource: Wisconsin electric utility territory map

Other state community solar policy guides from Perch


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