A clean energy financing program in Michigan reached a
milestone last month when it helped homeowners and businesses install 1 MW of
solar energy across the state.
Michigan Saves —
which was created by a $6.5
million Michigan Public Service Commission grant in 2009 — acts as a
green bank by financing clean energy projects at homes and businesses. While it
deals mostly in energy efficiency projects, it also removes the barrier of high
upfront capital costs for solar installations.
Since June 2011, the program has helped finance
installations at 132 homes and nine businesses, totaling $3.5 million in solar
investment. In all, Michigan Saves has been involved with roughly 8,600
projects totaling $102 million in clean energy investment.
“We think 1 MW is pretty significant,” said Mary Templeton,
executive director of Michigan Saves.
Under the program, property owners find qualified
contractors and apply for a loan, which are backed by nearly a dozen lenders
across the state. It will finance up to $30,000 for residential projects and up
to $250,000 for commercial.
Unlike paying with a major upfront cash investment, through
a credit card with high interest rates or through a home equity loan, Michigan
Saves offers unsecured loans for up to 10 years at less than a 5 percent annual
rate for residential projects. The length of terms for commercial projects are
five years with various annual rates.
“It’s a great deal for homeowners who want to pay for
investments over time,” Templeton said.
She added that few such programs exist in Michigan other
than Property Assessed Clean Energy financing (for commercial properties in
some counties) and some areas that allow on-bill financing. Comprehensive new
energy laws that took effect in April also allow utilities to create
residential on-bill
financing programs, a plan that is still under development.
Templeton said utilities are “certainly a partner” in offering
efficiency projects to customers. The program has also worked with solar
outreach efforts around
Traverse City as well as through the Solarize Michigan
campaign in a three-county area near mid-Michigan.
A Michigan Public Service Commission member serves on the
Michigan Saves board, but the agency no longer provides funding for the
program, which now operates through fees on projects, Templeton said.
A 2016
annual report says the program saved 53,000 metric tons of carbon
dioxide emissions and nearly 61 million kilowatt hours of electricity, or
enough to power 6,500 homes a year. The average annual energy savings is $310
per household and $7,615 for commercial buildings.
The growth in installations since 2011 also came as solar
costs have declined. The program’s first solar customer installed a system at
$6.05 per watt in June 2011, according to Michigan Saves. The homeowner earlier
this year that pushed the program past the 1-MW threshold paid $3.06 per watt.
One of the Michigan Saves solar projects will reportedly
eliminate $2,200 in a home’s annual energy costs without an upfront
investment, while the monthly loan payment is about the same as the energy
costs.
‘Thinking Big’
Last year, the Union of Concerned Scientists issued a
report saying a $105 million public investment into a dedicated statewide
green bank could lead to about $3 billion in private-sector clean energy
investment. The report came amid legislative uncertainty over how clean energy
would fare under the state’s energy law rewrite. Lawmakers ultimately agreed to
increase the state’s renewable energy standard to 15 percent by 2021 as well as
increasing energy efficiency spending.
Operating like a green bank, Michigan Saves offers a glimpse
of such development envisioned in the Union of Concerned Scientists report,
albeit at a smaller scale. Statewide, Michigan has seen $3.3
billion in renewable energy investment since 2008 when its original
clean energy standards were adopted, according to the Public Service
Commission.
“We are spot on with where we are versus where we expected
to be” when Michigan Saves launched in 2010, Templeton said. The $100 million
mark was a “huge milestone” that was initially set “not knowing where demand
was. We know an awful lot more about the market demand out there,” she added.
Still, Templeton said the program’s board of directors has
challenged the staff with setting higher goals for the next five to seven years
with a 10-fold increase in investment.
“We’re setting our sights on financing $1 billion worth of
energy efficiency and renewable energy projects in the next five to seven
years,” Templeton said of Michigan Saves. “We’re thinking big. We were created
to break down barriers in the marketplace, and we feel we’ve done a good job of
that.”
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