By BAUYRZHAN ZHAXYLYKOV

Capital News Service

LANSING – Michigan’s current renewable energy target is 50% by 2030 and 60% by 2035, with a goal of 100% clean energy by 2040. 

However, meeting that timeline presents significant obstacles, experts say.

The effort comes as utilities, state regulators and local governments navigate reductions in federal funding for alternative energy initiatives, as well as project delays and local permitting hurdles that could affect how quickly new energy projects are built. 

One of the challenges involves changes to federal financial incentives. 

John Freeman, the executive director of the Great Lakes Renewable Energy Association, said federal tax incentives for residential solar were eliminated last year, limiting support for some projects, while tax credits for business-scale solar continue. 

Dave Strenski, the founder of the Ypsilanti-based nonprofit SolarYpsi, said those remaining incentives may not last much longer.

“There is still the 30% tax credit for commercial projects, but the window is closing fast,” Strenski said. “I think the loss of the tax credit will kill solar in the short term, and many solar contractors will suffer or go out of business.”

At the same time, several energy-related projects have been paused or canceled, including wind and solar initiatives, an electric vehicle charging program and a clean school bus effort, according to Public Service Commission (PSC) data.

SolarYpsi, a volunteer-run nonprofit that educates residents about solar energy and helps design and install solar systems, is among the organizations affected. The group has raised about $1 million through grants and donations and helped grow the city’s installed solar capacity from zero to roughly 1.7 megawatts, generally enough to supply electricity to several hundred homes.

Most recently, it was developing a Solar for All project to install solar panels on 100 low-income homes, supported by federal, state and local funding. Those plans collapsed after federal and state funds were withdrawn.

“We have basically lost all the funding,” Strenski said, adding that the project is now on hold and could take years to revive.

In addition, the Republican-controlled state House cut $4.85 million from renewable energy and electrification projects as part of roughly $645 million in state-funded project reductions.

Still, the adverse effects of recent budget decisions have been limited as of yet, according to the PSC.

“There has been minimal impact so far,” said Matt Helms, the public information officer for the PSC. “Potential future state budget cuts could present further challenges.”

Michigan’s current renewable energy targets reflect changes to the Renewable Portfolio Standard over the past decade. In 2016, lawmakers increased the requirement from 10% to 15%, and utilities were required to meet that goal by 2021, which they did. 

In November 2023, the Legislature expanded the mandate again, requiring utilities to reach 50% renewable energy by 2030.

Meanwhile, renewable energy projects have been developing across the state. 

In 2024, wind accounted for about 67% of Michigan’s renewable electricity generation, while solar represented roughly 18%. 

Nearly 94% of the renewable energy credits used in Michigan are generated in-state, with the remaining credits sourced primarily from Indiana and several other states and provinces.

Carlee Knott, the energy and climate policy manager at the Michigan Environmental Council, said the next major milestone will come this year, when DTE Energy and Consumers Energy file their integrated resource plans with the PSC.

“These filings will outline utilities’ plans for future electricity generation,” Knott said. “They will be an important indicator of how the state is progressing toward its energy targets.”

Another factor is development of new renewable energy sources.

Building utility-scale solar and wind projects requires large amounts of land, much of it in rural areas.

In Michigan, zoning and permitting decisions are made at the municipal and county levels, giving local governments significant influence over whether projects move forward. 

Freeman, of the Great Lakes Renewable Energy Association, said local opposition, sometimes fueled by outside interests, can delay or block large-scale renewable projects.

To counter that,this association and other organizations focus on educating local officials about the economic and energy benefits of hosting wind and solar developments, he said.

Freeman said the benefits are twofold: Communities can access lower-cost electricity, and cleaner energy reduces pollution, leading to improved public health.

To encourage local approval of energy projects, the state created the Renewables Ready Communities Award in 2023. The one-time $30 million program provided local governments with $2,500 to $5,000 per megawatt of large-scale solar, wind or energy storage projects they permitted or hosted. 

Communities could use the funding for any purpose, and the incentive was designed to make hosting energy infrastructure more attractive, according to the Department of Environment, Great Lakes and Energy.

The initial funding has been fully allocated, and a second round of the program is expected to launch this year.

“We’re seeing a fundamental shift in how electricity is produced,” Freeman said. “Renewable energy is becoming a larger part of Michigan’s energy mix, even as challenges remain.”