State Senate bill may change solar power credit rules

Published: Jul. 19, 2016 at 5:41 PM EDT
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Solar power continues to be a viable source of energy for many residents in the Upper Peninsula, but a senate bill might change the way consumers are able to save money. Now Michigan Tech researchers are proposing an alternative source of energy.

Solar panels have increasingly become popular among households. It's proven to be economically-friendly, as for every kilowatt hour generated and not used, residents receive a credit from their electric power company. For instance, Upper Peninsula Power Company residents receive 20 cents in credit per kilowatt hour.

But with State Senate Bill 438, residents will receive just partial credit.

"Then you'll be getting significantly less than that 20 cents perhaps three cents per kilowatt hour," said Michigan Tech researcher Joshua Pearce.

"You could pay off an investment in solar panels in about seven years," added Abhilash Kantamneni of Michigan Tech. "The new bill would likely make it as close to being a 40 year pay back period."

If the bill gets passed, Michigan Tech researches predict that by 2020, hybrid systems will be a viable source of energy.

"It's made up of three parts: solar that turns sunlight directly into electricity, a battery that stores some of the extra solar energy and then if it's a cloudy day or the middle of the winter at night, a co-generation unit that takes natural gas and turns that into electricity," Pearce explained.

It will also remove residents off the electrical grid, meaning they won't pay a monthly bill to an electric power company.

"You would purchase the system up front, you'd pay for the natural gas from the co generation unit and be providing electricity for yourself for the next, let's say, 25 years," said Pearce.

"When you put solar on your roof the excess energy goes to into the grid," Kantamneni said. "When you buy the hybrid system the excess energy goes into the battery."

But how much would a hybrid system cost? Researchers say it depends on how much energy your household uses.

"As a general rule of thumb, solar today should come in about $3 per watt and so a three kilowatt system will cost about nine grand for the solar part of it and you can basically double that for the battery and the co-generation system," said Pearce.

is currently being decided on at this time.