LANSING — As Michigan’s solar industry grows, homeowners and businesses that generate their own electricity from their rooftops are taking on the state’s large utilities to determine how much their power is worth.

Testimony has wrapped on a bill floating in the Senate’s energy committee that would slash compensation for rooftop solar producers. But the power struggle is expected to continue into the fall as lawmakers work to update Michigan’s 2008 energy law.

The House also is considering energy legislation sponsored by Rep. Aric Nesbitt, R-Lawton, and a bipartisan group of House lawmakers also plans to introduce legislation that would preserve solar net metering.

Some policy advocates want the Senate to focus on energy issues other than small-scale solar — a process known as “net metering” — as they debate a broader law. Their rationale? Too few users would benefit from a decision, once it’s rendered.

Solar net metering grew by a quarter from 2013 to 2014, to 1,840 customers, according to a recent report from the Michigan Public Service Commission, the state’s energy regulatory agency. Yet it still makes up less than 1 percent of Michigan’s total retail sales.

Through net metering, people install solar arrays at their homes, businesses, schools and municipal buildings to generate power and offset their energy bills. They can sell excess electricity they produce to the utilities.

The issue surfacing now is how much those individual customers should be compensated. The industry is at the beginning of a transition from a centralized grid to a more distributed system in which people can be both customers and power generators, said Brad Klein, senior attorney at the Environmental Law and Policy Center in Chicago, who works on cases throughout the Midwest.

In some ways, it mirrors the technological advances made in other industries, such as telecommunications, over the past century, Klein said.

“What’s crucial for states like Michigan right now is to get a policy framework in place that enables rather than restricts that transformation,” he said. “From our perspective, one of the benefits that Michigan has right now is that it has some time to figure out this transition. And everybody recognizes, especially in policy and in regulatory circles, that this transition is going to require some work.”

Net metering is just one provision in a two-bill package from Sens. Mike Nofs, R-Battle Creek, and John Proos, R-St. Joseph. Their legislation also would eliminate a mandate that utilities generate some power from renewable sources, instead allowing them to consider renewables through a process known as integrated resource planning.

Proos’ bill would allow utilities to buy excess rooftop solar power at wholesale rates, while requiring net metering customers to buy power off the grid at retail rates. That’s a change from existing practice, which allows customers to collect retail rates for the power they produce. During three weeks of hearings, rooftop solar customers say that change would kill the industry just as it’s growing in Michigan.

“I’ll go from seven figures a year down to the lower six figures a year in volume immediately,” said Mark Hagerty, owner of Commerce Township-based Michigan Solar Solutions, which designs and installs solar power systems for homes, businesses, schools and local governments. Hagerty declined to offer specific sales figures, but said: “We’d be selling them our electricity for far less than they’d be selling it back to us for.”

Utilities, including Detroit’s DTE Energy Co., claim they have subsidized these small power producers at the expense of other ratepayers for years, in that they connect to the electrical grid but don’t pay the same price to maintain it.

But the utilities’ argument is based largely on the rates they charge. The MPSC says it has never studied the true costs or benefits of net metering on the grid, or whether a subsidy exists. DTE says it subsidizes net metering customers to the tune of 10 cents for every 15 cents of power generated, the difference between the average retail and wholesale rates.

Currently, utilities pay retail rates to net metering customers for the power they produce, rather than the wholesale rates they pay elsewhere. “The key factor is that it should be fair to all customers, and the way it’s set up now … it’s really not,” DTE spokesman John Austerberry said, adding that he would support grandfathering in existing customers under current rules so they wouldn’t be affected financially. “Part of that was also so that utilities could figure out how these systems get best integrated into the larger utility system, and it’s done all of that.

“Going forward, as the technology continues to evolve, we just think that people should be making the decision on the technology based on the real costs.” Net metering customers, however, say they’re producing power at peak daylight times — when demand for electricity is highest — and use excess power they generate in the form of bill credits.

Utilities’ claims about subsidies, customers say, deflect attention from their primary goal: to preserve their position atop the electrical market. “They’re trying to crush the only potential competition that they have,” said Hagerty, who has installed more than a megawatt of total solar power to 129 customers since he started his company nearly eight years ago.

Some subsidization likely exists, but Proos’ bill undercompensates net metering customers, said Martin Kushler, a senior fellow with the Washington, D.C.-based American Council for an Energy-Efficient Economy, who has been following Michigan’s legislation. Compromise is possible, he said, somewhere above the wholesale price being proposed while still allowing customers to help cover infrastructure costs.

“Frankly, I’d like to see that happen and take this issue off the front page,” said Kushler, adding that addressing renewable and energy efficiency standards will affect more Michigan residents. “The amount of attention spent on the net metering is way out of proportion to how important it actually is to Michigan’s energy solution.”