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Locally Distributed Shared Solar Legislation Inches Forward
As introduced on June 10, 2025, HB4590 was placed on second reading and re-referred to the Michigan Committee on Energy. If approved the bill would establish a locally distributed shared solar (LDSS) program and requires MIPSC to promulgate LDSS rules.
As defined, LDSS facilities must: (1) generate electricity by means of solar photovoltaic devices, no part of which has been manufactured in China, North Korea, or Iran; (2) have a capacity of 20MW or less if located on a commercial or industrial rooftop, or 5MW otherwise; (3) have at least three subscribers and produce bill credits for subscribers proportional to their subscriptions; (4) have no subscription exceeding 40% and, beginning one year after commencing operation, have 60% of its capacity subscribed at 40kW or less; and (5) at initial qualification, not be located within one mile of another point of interconnection owned by the same entity.
The bill also requires that utilities provide bill credits to LDSS subscribers for a minimum of 25 years. If an LDSS is not fully subscribed, it may accumulate excess bill credits for annual disbursement to subscribers. Any RECs generated by an LDSS are the property of the facility owner.
The bill also directs MIPSC, within one year if the effective date, to promulgate LDSS rules that, among other things:
- ensure all customer classes have opportunities to participate;
- require that subscriptions be offered to low-income households and service organizations;
- prohibit utility removal of a customer from the applicable customer class because of LDSS subscription;
- provide for transferability and portability of subscriptions;
- modify existing interconnection standards, fees, and processes to facilitate LDSS interconnection and allow for utility recovery of reasonable interconnection costs;
- require utilities to offer consolidated billing to LDSS subscribers;
- ensure that solar energy accounts for no more than 20% of in-state generation;
- require that third-party developers: (i) own and operate at least 25MW of solar generation capacity in other states in order to develop, own, or operate LDSS facilities; (ii) ensure subscriptions provide bill savings of at least 10%; and (iii) allow customers to terminate their subscriptions at any time and without penalty; and
- require utilities to cooperate with third-party developers to identify suitable interconnection opportunities and support their efforts to acquire customers for LDSS projects.
