Bill
HB 5927
Michigan’s bill creates a statewide rooftop solar net metering program with full retail credits, monthly netting, 20-year grandfathering, and uniform interconnection rules.
HB 5927 (Michigan, 2025-2026) – Public utilities: electric utilities; net metering program for rooftop solar; provide for
Overview
- Purpose: Amend the Clean and Renewable Energy and Energy Waste Reduction Act to govern distributed generation (DG) and establish a statewide rooftop solar net metering program, including uniform interconnection rules, consumer protections, and program parameters. Creates a framework aligning DG growth with grid reliability and consumer protections.
- Jurisdiction: Michigan
- Introduced: April 30, 2026
- Primary sponsor: Rep. Reggie Miller
- Co-sponsors: Rep. Emily Dievendorf, Rep. Donavan McKinney, Rep. Erin Byrnes, Rep. Mike McFall
- Committee: Energy
Key Provisions
1) Distributed Generation (DG) Program (Sec. 173)
- The state Public Service Commission (commission) must establish a statewide DG program by order and may issue rules to implement it.
- Eligibility and scope: Applies to all regulated electric utilities and alternative electric suppliers in Michigan.
- Rooftop solar exemption: Beginning 90 days after the effective date of the act adding section 173a, the distributed generation program does not apply to eligible rooftop solar generators participating in the rooftop solar net metering program (Sec. 173a).
- Commission update: Within 180 days after the act adding 173a takes effect, the commission must update the DG program to comply with the new rooftop solar net metering framework.
2) Interconnection and Participation (Sec. 173)
- Eligibility: Electric customers may interconnect eligible electric generators with their local utility and operate in parallel with the grid.
- Capacity limit: DG participation limited to up to 110% of the customer’s prior 12-month electricity consumption (customer’s recent demand baseline may be adjusted if needed).
- Waiver: Commission can waive certain interconnection requirements for customers in the preexisting net metering program (case U-14346, March 29, 2005 order).
- 10% cap: DG programs cannot exceed 10% of an electric utility’s average in-state peak load over the prior 5 years. If the limit is reached, utilities must notify the commission. Allocation of the 10% cap:
- At least 50% for customers with generators ≤ 20 kW
- Up to 50% for customers with generators > 20 kW but ≤ 550 kW
- Application order: DG participation is based on the order applications are received.
3) Customer Service and Rights (Sec. 173)
- Utilities cannot discontinue service or limit rate schedules solely due to a customer’s participation in the DG program.
- Uniform interconnection requirements, safety, and equipment standards apply.
- Inverters and equipment must meet IEEE 1547.1-2020 and UL 1741, with potential rules for automated grid-balancing functions.
- Utilities may own DG interconnection equipment and perform testing and require a parallel operating agreement prior to operation.
4) DG Program Components (Sec. 173)
- Uniform interconnection forms/processes for all utilities; same processes apply to customers served by alternative suppliers (with copies provided to the local utility).
- Rate treatment: DG participants pay retail rates for electricity inflows (grid-imports).
- Monthly bill credits: Outflows (excess generation) are credited at the full retail rate (including all non-tax charges).
- Recordkeeping: Utilities must maintain records of DG applications and active generators.
5) Penalties and Timelines
- Interconnection/approval deadlines: Failure to meet timelines triggers civil fines up to $1,000 per day per violation.
- Civil enforcement: Prosecutor or attorney general may enforce fines.
6) Rooftop Solar Net Metering Program (Sec. 173a)
- Purpose: Establish minimum, uniform statewide consumer protections for rooftop solar net metering.
- Timeline: Commission to establish the program within 180 days of the act adding this section.
- Core elements:
- Monthly netting: Net metering calculated monthly (total consumed minus total generated and exported).
- Full retail credits: Exports credited at full retail rate (includes all charges; excludes taxes).
- Carryforward and annual true-up: Net excess generation (NEG) carries forward for at least 12 months; after 12 months, any remaining NEG is paid out at the full retail rate during annual true-up.
- No punitive charges: No standby, demand, minimum bills, fixed charges, interconnection fees, or similar charges solely due to rooftop solar participation, except a reasonable, one-time interconnection application fee.
- System sizing: Eligible rooftop solar can be sized up to 120% of 12-month consumption (default methods for customers with insufficient history).
- Interconnection timelines: Timely, uniform approval timelines:
- ≤25 kW: decision within 10 business days
- >25 kW: decision within 20 business days
- If no decision, application is deemed approved and proceed to meter installation/permission to operate.
- System impact study: If needed, the utility must justify and estimate costs; cost-causing rules ensure cost causation; avoid distributing upgrades to all customers unless directly caused by the interconnection.
- Program availability: Utilities must offer rooftop solar net metering until at least 20% of the utility’s average in-state peak load for the preceding 5 years is enrolled; enrollment cannot be suspended before this threshold is met.
- Grandfathering/nonrollback: Credits for rooftop solar are fixed for 20 years from permission to operate; future orders or rate cases cannot reduce these credits during that period.
- Transparency/reporting: Online dashboards for each utility showing applications, approvals/denials, processing times, and total enrolled capacity; annual report to Legislature by March 1 describing participation, timelines, costs/benefits, and recommended changes.
- Benefit-cost accounting: Evaluations must include avoided energy/capacity costs, avoided transmission/distribution investments, line losses, resiliency, and environmental benefits; no double counting of fixed costs.
7) Implementation and Standards (Sec. 173a and Sec. 173)
- Rules: Commission to promulgate rules under the Administrative Procedures Act to implement both sections, including consumer protections, billing credits, dispute processes, and coordination with alternative electric suppliers.
Who is Affected
- Electric utilities and alternative electric suppliers in Michigan.
- Electric customers who install eligible rooftop solar generators.
- Rooftop solar customers within participating utilities and customers seeking to interconnect DG.
- The commission and state agencies charged with energy policy and consumer protection.
Timeline Highlights
- DG program groundwork ordered by the commission (as established in Sec. 173) with updates within 180 days after 173a’s effective date.
- Rooftop solar net metering program established by the commission within 180 days after the 173a act’s effective date.
- Interconnection/approval timelines and annual reporting schedules as specified in the rooftop net metering provisions.
- 20-year grandfathering period for net metering credits starting at permission to operate.
Notes
- The bill references an existing rooftop solar net metering framework from a March 29, 2005 order (case U-14346) and an earlier distributed generation program timeline (2017). It introduces a distinct, separate 173a rooftop net metering program with explicit crediting, carryforward, timing, and fairness provisions.
- Financial penalties are allowed for late interconnection approvals, ensuring timely processing.
This summary captures the bill’s core structure, responsibilities, and anticipated impact on rooftop solar adoption, interconnection processes, and utility cost-causation considerations in Michigan.
Compiled from official sources — confirm details with the bill’s official record.
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