MPSC report finds continued growth in renewable energy and distributed generation programs, with more on the way

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A new report from the Michigan Public Service Commission finds continued growth in the state’s renewable energy and distributed energy programs, with participation expected to continue to rise as the state implements the changes made to Michigan’s energy laws in 2023.

The MPSC’s Status of Renewable Energy, Distributed Generation, and Legacy Net Metering in Michigan report, released today, finds that electric utilities regulated by the MPSC had approximately 6,000 megawatts (MW) of renewables online at the end of 2023, based on contracts approved by the Commission. That figure is set to jump to more than 8,000 MW by end of 2026. The amount of renewable generation in service statewide will exceed that number because utilities not regulated by the MPSC aren’t required to submit renewable energy contracts to the Commission.

Wind remains by far the largest source of renewable energy in Michigan, accounting for 59% of renewable generation. Solar generation continues to grow rapidly in Michigan, albeit slowed down in recent years by supply-chain issues, local permitting challenges and longer interconnection delays at the Midcontinent Independent System Operator, the regional transmission organization for much of Michigan. These factors and inflation also contributed to rising solar costs.

Michigan’s electric providers were required to meet a 15% renewable portfolio standard by 2021, and all of Michigan’s electric providers met that goal. With the passage of revamped energy laws in 2023, electric providers are now required to meet a 50% renewable portfolio by 2030 and 60% by 2035.

Among the report’s highlights:

• The report found significant continued growth in utility voluntary green pricing (VGP) programs. Customer participation more than doubled from 2020 to 2023, from fewer than 40,000 participants to more than 100,000. VGP programs allow customers to voluntarily specify the amount of their electricity purchases from a utility to be from renewable energy sources, with the costs of the programs billed to participating customers.

• Michigan’s distributed generation (DG) programs continue to grow. In 2023 Michigan had 189 MW of installed DG capacity, an increase of 14 MW, or 8.5% over 2022. The number of Michigan customers participating in the DG program increased in 2023 to 21,609 with 21,845 installations, from 19,571 customers and 19,778 installations in 2022. The growth is expected to continue, because the 2023 energy laws raised the DG program cap from 1% to 10% of a utility’s average in-state peak load for the preceding 5 calendar years. Customer interest continues to grow in pairing DG with battery storage, with a total of 28.6 kilowatts in operation in 2023.

PA 235 also established a clean energy standard for electric providers that ultimately will require 100% of electric generation to come from resources that do not emit greenhouse gases or that capture and store carbon dioxide, along with a statewide energy storage target of 2,500 MW.

The MPSC will have a critical role in implementation of both the clean energy standards of 80% by 2035 and 100% by 2040. The Commission is working to establish formats and guidelines for clean energy plans to be submitted by investor-owned, municipal and cooperative electric utilities pursuant to PA 235’s requirements (conducted through Case No. U-21570). Electric providers will then be required to submit the plans in 2028.

 To meet the statewide energy storage target, investor-owned utilities and alternative electric suppliers (AES) will be required to file plans by Dec. 31, 2029, outlining how they plan to comply with the target. Investor-owned utilities must begin filing annual storage reports by Dec. 31, 2024. The Commission directed MPSC Staff, in Case No. U-21571, to propose a methodology for calculating proportional shares of the statewide storage target for each regulated utility and AES.

PA 235 directed the MPSC to complete a study on long-term energy storage systems and multiday energy storage systems by Feb. 24, 2025. MPSC Staff is working with the U.S. Department of Energy to complete the study, and Commissioners and Staff have joined the Long Duration Energy Storage National Consortium to, among other things, better understand available technology and national best practices.

Lastly, PA 233 of 2023 granted siting authority to the MPSC for utility-scale wind, solar and energy storage facilities under specified conditions. MPSC Staff held public meetings beginning in March 2024 to engage with experts, local government representatives, project developers and other interested persons to consider issues relating to application filing instructions or guidelines, potential use of consultants and assessment of application fees, guidance for development of compatible renewable energy ordinances, and any additional related issues. The Commission in October adopted application instructions and procedures in Case No. U-21547.

For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the MPSC on Facebook, X/Twitter or LinkedIn.