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September 24, 2007

Michigan Bill Proposes First U.S. Renewable Energy Feed-in Law

State Representative Kathleen Law(D) of Michigan's 23rd district has introduced House Bill 5218 (the Michigan Renewable Energy Sources Act), which is the first comprehensive renewable energy "feed-in tariff" (FIT) introduced in any American legislature. By fixing a guaranteed price for small-scale electricity generation, the proposed legislation would help build the distributive infrastructure needed for dispersed electricity generation by "non-traditional" energy providers; in other words, FITs allow individual homeowners, farmers, electric cooperatives, businesses, and other associations sell to the energy grid for a potentially healthy profit.

As proposed, the tariffs rates proposed in the bill are on par with similar feed-in rate structures that I have alluded to in this blog before. The aggressive rate structure in Germany's Renewable Energy Sources Act has produced well documented growth in aggregate-level and micro-level generation of renewable energy. It has even been suggested that the proposed fee schedule would be the most aggressive and comprehensive tariff schedule in North America, surpassing Ontario's Standard Offer Program (For further reading, I highly recommend Paul Gipe's Wind-Works, a sort of cyber-clearinghouse for feed-in laws, renewable energy, everything you could want to know about wind and decentralizing the grid with renewable energy). The proposed legislation, if passed, would be more comprehensive in breadth (in terms of the greater diversity in renewable energy sources included), as well as depth (in terms of the newfound deep pockets in the pants of the small-scale electricity providers).

This legislation is a move that will most certainly invigorate small-scale renewable energy production in Michigan. However, I also see that it while it is diverse enough to include a fee schedule for a broad array of potential sources, it particularly favors some sources over others (i.e. mandating much higher rates per kWh for solar compared to other sources.)

Summary of Proposed HB 5218 Tariff Rates:

Hydro less than 500 kW..........................$0.10 kWh
Biogas less than 150 kW.........................$0.145 kWh
Geothermal less than 5 MW....................$0.19 kWh
Wind.........................................................$0.105 kWh
Small wind................................................$0.25 kWh
Rooftop solar less than 30 kW................$0.65 kWh
Solar fa├žade cladding less than 30 kW...$0.71 kWh

I am witholding too much judgment on this particular bill as of yet, but I applaud its creativity and will be following it as it progresses through the legislative process.

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