The Biden administration recently announced a massive investment in solar energy production to help meet its ambitious renewable energy goals. It’s a worthy goal. But it highlights an inherent tension in climate policy. Everyday folk want to do their part to take on climate change, but a few corporations are actually the biggest sources of greenhouse gas emissions — and they do all they can to slow down the rest of us.
I’ve got some experience with this. I spend a lot of time talking about environmental justice and climate change, so Sarah and I have been doing all we can to walk the walk. There are the little things: taking a reusable mug to the coffee shop, biking when I can. I recently ordered my first electric vehicle (designed right here in Michigan, of course). And our biggest decision yet: installing rooftop solar.
Sarah and I bought our first home earlier this year. Cutting our carbon footprint in the new home was one of our top priorities. So when I learned my new next-door neighbor had already installed solar panels, I asked his advice. I learned that the American Rescue Plan had extended a tax credit program that would reimburse up to 26% of the cost of the panels and installation, and that the City of Ann Arbor had organized a nifty bulk-buy program called A2 Solarize, organizing potential solar installers and solar customers into 15-home packages. For a 15% discount on each unit, installers get customers in bulk. Local and federal discounts and rebates translated into a 37% overall reduction off the sticker price.
We decided to make the leap and invested in a package that would cover 75% of our electrical costs overall. Our unit was installed in early July, at the peak of summer. And though the unit produced an average of 30 kWh a day, our consumption in those hot and humid months was substantially higher — our air conditioner alone accounted for the majority of our consumption.
An indirect benefit of having a real-time energy consumption app through our unit’s battery is that I began to pay close attention to how much energy we were consuming. Rather than 75 degrees, we set our smart thermostat to an admittedly balmy 77 degrees. Rather than force our central unit to cool our upstairs bedroom at night, we bought an energy-efficient portable AC unit. Compared to the year prior, we reduced our consumption by about 30% this summer.
As the weather’s cooled, our solar unit now covers more than our daily consumption. Indeed, we’re selling excess energy back into the grid — or at least we should be. Standard energy meters are unidirectional, meaning they register any flow in or out of the grid simply as energy out. To differentiate them, DTE Energy — my local energy utility — has to install a bi-directional meter. Two months later, we have yet to have ours installed. I’m told we have an appointment in the next 15 business days. For now, I’m paying DTE for the privilege of sending excess clean energy into the grid … which is a pretty good metaphor for DTE’s general approach to clean energy. But then, why aren’t bi-directional meters standard?
Michigan used to have one of the more generous “net-metering” policies in the country, paying energy producers the retail rate for energy as it was produced. In 2016, that was replaced by a new “distributed generation” policy. It reimburses customers according to a net “inflow/outflow” mechanism:
Inflow represents the kWh delivered by the utility to the customer and Outflow represents the kWh generated by the customer’s distributed generation project and that is not used behind the meter and is exported to the distribution grid. Under the proposed Inflow/Outflow tariff, distributed generation customers pay for all Inflow electricity delivered by the utility according to their regular cost of service-based retail rate schedule. Outflow kWh receive a credit.
Utilities don’t charge an even rate for electricity. Instead, retail rates per kWh are highest during the day when our computers, air conditioners, and office lighting demand it most. That’s also when solar arrays are at maximal production, though. Because this new policy doesn’t allow solar customers to charge retail rates when their production is highest (and the price for their electricity is highest), the policy essentially forces customers to buy electricity at retail rates, but sell it back for a far lower rate. Considering that solar customers tend to be higher income, supporters of the new policy argue that it addresses the fact that wealthier customers end up paying a lower overall rate. On the other, it disincentivizes clean energy investments. Though I agree with the progressive aims of this policy, DTE has used it as a convenient way to protect its bottom line.
Over the long run, my rooftop solar should pay for itself in energy savings, but my goal wasn’t the savings, it was the footprint reduction. So I signed up for another DTE program that allows me to pay a premium to assure that the electricity I have to buy from DTE comes from a renewable source. Under this program, I’m basically subsidizing DTE to invest in renewable energy production. I’m willing to do it, but it raises another obvious question: why should ratepayers like me have to subsidize a government-protected and subsidized utility to do what they should have been doing for decades already?
I’m grateful to be able to do my part — and for the government programs that subsidized my rooftop solar. And yet the price tag remains prohibitive for lower-income households. To achieve broad coverage, government programs are going to have to vastly reduce the price of panels and installation to make them broadly affordable for communities who can’t afford tens of thousands of dollars out of pocket. There are, of course, plenty of green jobs to be created here too.
Reducing the upfront costs of installation will also address the equity justifications DTE and other utilities offer for reducing the rate at which they buy electricity from solar customers. Given the overall value of renewable energy to our society beyond the electrons themselves, renewable energy should be rewarded, not devalued.
More broadly, my experience highlights the challenges of a consumer-oriented approach to fighting climate change. Fully 70% of greenhouse gas emissions trace back to just 100 companies. Fifty percent of overall emissions since 1988 trace back to just 25 of those companies. And while each of us can play our part, we should not exaggerate the size of that part. It’s like worrying about raindrops in an ocean.
Meanwhile, it’s sunny outside, and I’m still paying for the energy I’m harvesting for DTE.