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Yes, energy companies are required to buy back excess energy produced by home solar panels

In 2016, Michigan switched to distributed generation, meaning solar energy credits are no longer 1:1 with purchase costs.

MICHIGAN, USA — It's been a hot summer in West Michigan full of sunlight and temperatures feeling well over 100 degrees. With all that extra sunlight, it's no surprise that 13 On Your Side viewer Matthew in Grand Haven asked about using those rays to make some money.

The Question:

"If a Michigan homeowner with solar panels creates more energy than they use, can they sell it back to the grid? Are energy companies required to pay for the extra energy?"

Our Sources: 

The simple answer to Matthew's question is yes - energy companies are required to compensate homeowners for excess energy produced by solar panels, but it's not as simple as yes or no.

Between 2008 to 2016, Scripps says the state followed net metering, which meant homeowners with solar panels would be compensated the same amount for a kilowatt hour (kWh) of energy as they would pay on a bill. After a law change in 2016, Michigan switched to the practice of Distributed Generation, and the payouts are no longer 1:1.

"They are not allowed to say we’re not buying this back from you. There are caps in the statute in terms of the amount that gets sent back," Scripps said. "All of the utilities still have to buy the excess solar being generated by their customers... the question is what price do they pay for it."

Becker gave consumers energy as an example. If they charge a homeowner 17 cents/kWh, the homeowner can expect to get back around 7 or 8 cents/kWh in compensation for their excess. He said peak hours do apply to generation the same way they impact use, meaning power created from the panels during peak can also be sold at the increased rate. 

"They’ll never write a check, it is just a credit system." Becker said. "Usually you’re building up a whole lot of credits in the springtime that are held onto until the winter." Scripps and the MPSC say those credits will roll over year to year.

Not every utility will treat these credits the same. Investor owned utilities, like Consumers Energy or DTE fall under the oversight of MPSC. Public works utilities, or member owned utilities like Cooperatives are required to participate in the distributed generation program, but their rates are not regulated or set at the state level, and vary from group to group.

The Answer:


This is true.

Yes, energy companies are required to buy back excess solar power generated by homes. Just don't expect a money in your pocket.

If you have had issues with energy companies not complying with the law, you can report it to MPSC on their website.

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