By EMILY LAWLER
Capital News Service
LANSING– Turning sunshine into money isn’t a new concept, but it may become a more profitable one in Michigan.
A proposed “feed-in tariff” plan would allow individuals and businesses to generate renewable power and sell it to utility companies with a guaranteed “reasonable profit” of 10 to 30 percent.
“It ensures you’re going to cover your cost and not lose money,” said Stanley Pruss, director of the Department of Energy, Labor & Economic Growth (DLEG).
Rep. Lee Gonzales, D-Flint, is pushing the feed-in tariff idea as part of renewable energy legislation.
“The idea behind the feed-in tariff is that any resident or business could be an energy entrepreneur,” said Gonzales.
New sources of power could help meet the state’s renewable energy portfolio standards, which require the state to get at least 10 percent of its energy from renewable sources by 2015.
“It dovetails really well into renewable portfolio standards,” said Gonzales.
But Daniel Bishop, public information director of Jackson-based Consumers Energy, said the feed-in tariff wouldn’t produce enough energy to help meet the standards.
“Given the upfront cost for a customer to install these systems, most individuals will not choose to fund this kind of project,” he said. “This is likely to be a very small part of future power supplies.”
Consumers Energy provides electricity to 1.8 million customers in the Lower Peninsula. Most of its energy comes from coal plants, with only 4 percent from renewable resources.
Pruss said the legislation’s profit guarantee would offset purchase and installation costs.
“It really motivates people to adopt renewable energy systems,” he said.
Pruss and Gonzales both noted that 50 countries including Germany, Ireland and Spain have adopted a feed-in tariff system. Gainesville, Florida, launched its program in March and reached its target of producing four megawatts of energy within days of its launch.
Bishop said most of his company’s customers would oppose that kind of subsidy, and it’s not yet clear where the money to pay the producers will come from.
The legislation would impose a surcharge on energy customers, but Gonzales says feed-in tariffs work differently everywhere, and he’s still deciding how to fund Michigan’s program.
A work group of DLEG and Public Service Commission officials, among others, is working on financial details.
However, Gonzales said he believes the public would support the larger goal.
“This would help diversify the state’s energy resources,” said Gonzales.
© 2009, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.