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2019 Policy Grade


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Congratulations! You've found the ultimate guide to going solar in Michigan

2019 Policy Grade


Avg. Savings/year


Your 2019 guide to getting solar panels for your home in Michigan

This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Michigan home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!

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** What's new for 2019 **

People think that just because it’s cold and snows in Michigan during the winter that you can’t go solar. Wrong. Over the course of the year, a city like Detroit gets an average of 4.2 hours of full sun a day. That’s plenty for solar. Plus, solar panels are more efficient (produce more energy) when it’s cold, and less energy when it’s hot. So while you might not love the cold and the snow for other reasons, keeping you from saving money (and the planet) with solar power shouldn’t be one of them!

Seriously, in a state that is involved in so much solar innovation, and struggling so much financially, it’d be a shame for the Michigan legislature not to help homeowners start the transition to the future of energy production.

Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $3,500/kW! This is paired with the Michigan solar incentives you see below.

The Solar Strategy section is focused on the 3 ways of paying for solar in Michigan, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.

The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Michigan. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.

Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Michigan.

Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.

Your Solar Strategy in Michigan

Figuring out the best way to go solar in Michigan can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.

We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:

How should you pay for solar?

Use our decision tool to find out!

How to pay for solar panels in Michigan

The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or Power-Purchase Agreement (PPA). As you can see, the purchase option leads to the highest dollar-amount returns over time, but look a little closer. Taking a solar loan or Home Equity LLine of Credit (the orange bars) and paying for the system over time means you'll actually put down less of your own money, while reaping a big financial benefit in year 1.

That's because you'll be paying over time for the system, but you still get a 30% federal tax credit based on the entire cost. You'll start out ahead, so your payments over 15 years will have less impact on you than plunking down a big pile of money up front. All you need is equity or great credit.

The option with the smallest savings is for a solar PPA, which means you put $0 down on a rooftop solar system and pay monthly while you accumulate electricity bill savings over time. Leases and PPAs are an excellent option if you don't have any equity or cash to put down, and they still save you money.

Read more below about each of three very good options for solar in Michigan!

How much can you save with solar?

Find out

Option 1: Paying cash for solar

An outright purchase used to be the only way to get solar, and it's still the option that provides the "biggest" financial returns. The reason we put "biggest" in quotes here is because it's technically true, but based on percent return for the money, a loan is a better option.

If you have equity in your home or good enough credit to qualify for a solar loan with an interest rate of 4% or less, that's the option to go with. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans below.

If you've got cash and you prefer to pay up front, you'll have to plunk down $20,000. But by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced about $12,000 in income, after your costs are paid back. The reason this works is that solar offsets your electricity bill—enough to save you about $820 in year 1, and it just goes up from there. As the electric company raises rates, you save more and more, and more...

Net Present Value: -$621

Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Michigan's -$621 NPV on a 5-kW solar system means you'd be that much better off investing your money in stocks over 25 years than in Michigan solar. But check out what happens to NPV if you buy the same system with a loan that you can pay back over time.

Here’s how the numbers pencil out when you pay up front for a 5-kW rooftop solar system:

  • Installing a typical 5kW solar system should start at about $20,000. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
  • The Feds calculate their incentive based on actual out of pocket costs, so take 30% of $20,000, for a tax credit of $6,000.
  • After the tax credit we subtract your first year’s energy savings, which we estimate to be $819. That reduces your cost after the first year to only $13,181.
  • Your system will pay for itself with electric bill savings in 15 years, and after it does, you'll see a total net profit of $12,135 for the next 10 years. The internal rate of return for this investment is a solid 5.5%. Banks can't promise that kind of return, but you might be better off in the stock market.
  • And don't forget... your home's value just increased by close to $20,000, too (your expected annual electricity savings over 20 years).
  • In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 91 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Michigan. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Option 2: Using a loan to pay for solar

You don't need $20,000 sitting around to pay for solar. As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.

That’s because, in Michigan, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you a tax break. Your tax savings will be huge in the first year. You'll come out thousands ahead this year, and you'll still see a tidy profit over the 25-year life of your system.

A solar purchase like this will make sense for you if the following is true about you and your current situation:

  • You can qualify for a solar loan or home-equity line of credit (HELOC) for $20,000, with a fixed rate of 4% or lower and a 15-year repayment period. Don't be put off if you're offered a higher rate. It just means a tiny bit less of the thousands of dollars you'll make with solar.
  • You love making money without much risk.

Net Present Value: $1,005

Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and michigan's $1,005 NPV on a solar loan means you'd be that much better off investing your money in solar over 25 years than in, say, stocks. Interstingly, Michigan is ne of those places where the NPV of a Power-Purchase Agreement is greater than that for ownership, but if you feel like you need to own your panels, you can rest easy with a Michigan solar loan knowing you're doing right for your pocketbook at the same time as you're doing right by the planet!

Here’s how the numbers pencil out for a Michigan solar purchase with a loan:

  • Installing a typical 5-kW solar system should start at about $20,000. That's how big your loan will need to be to cover it.
  • The electricity you'll save in the first year of operation would have cost $819, but your annual loan payments will be $1,775, meaning you'll spend $956 on solar this year, but...
  • You'll also see a huge tax break. The Feds give you 30% of the cost of your system back as a tax credit, which in this case is $6,000. You'll be paying over time but getting the benefits up front!
  • That tax break means you'll come out $5,044 ahead after year 1. Your loan payments will be about $80/month more than your energy bill savings, but that difference will get small as the utility company raises rates every year.
  • By the time you've paid off your loan in 2031, you'll see yearly savings of about $1,100. After 25 years, your total profit will be about $5,506!
  • On top of the green that will stay in your pocket, your system will mean green for the environment, too. 91 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in Michigan. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)

PPAs are a great way to go solar if you haven't got stacks of cash or oodles of equity in your home. With a PPA, it's possible to get solar panels for $0-down and see substantial savings over 20 years!

For now, getting a PPA on a 5-kW solar system will save you only about $10 per month, which might not sound like a great deal, but as the utility company raises rates, you start to see big savings. Our 20-year PPA estimate shows a total savings of $4,119.

Net Present Value: $2,153

Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Michigan's $2,153 NPV on a solar PPA means you'd be that much better off investing your money in solar over 25 years than in, say, stocks. That number is pretty huge for a $0-down investment, so you can rest easy with a PPA in Michigan knowing you're doing right for your pocketbook at the same time as you're doing right by the planet!

Here's more about how a PPA works:

Keep in mind, the numbers above are based on an average home in Michigan. If you're ready for a custom quote for a solar PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

How much can you save with solar?

Find out

Michigan Solar Policy Information

Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.

State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.

Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Michigan:

Michigan's Renewable Portfolio Standard

10% by 2015 and 1100 MW

Grade: C

Michigan's Renewable Portfolio Standard grade

A Renewables Portfolio Standard (“RPS”) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels. Michigan has had an RPS law since 2008, and it was updated in 2016 to mandate 15% of all electricity must come from renewables by 2021. The word "updated" makes it sound like Michigan lawmakers have been working to improve the law, but really, there's a reason the image above says "nation's 25th best." 15% by 2021 is honestly a paltry goal, and many states have higher goals, sooner, like Colorado and Maryland, both of which have nearly double the percentage goal by one year sooner.

An RPS is critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities aid the transition to lower electric bills and offering incentives to put solar on roofs is because the state forces them to.

Where does that leave Michigan homeowners who want to go solar? Unfortunately, with very few statewide incentives. Still, solar is cheaper than ever, and it's 100% economically viable in Michigan, saving homeowners thousands over the long-term. Read on to discover how solar saves you money and the planet at the same time!

Learn more about Renewable Portfolio Standards

Michigan's RPS solar carve out


Grade: F

Michigan's Solar Carve-out grade

One way a new Michigan RPS could be improved is with a specific requirement that a percentage of the state’s energy come from solar panels, or a mandate for environmentally necessary increases in distributed generation. If that was the case, you’d see even stronger incentives for residential solar power.

Learn more about Solar Carve-outs

Michigan Electricity Prices


Grade: B

Michigan's Electricity cost grade

Michigan homeowners pay an average of 16 cents/kWh for electricity. That’s more than 2 cents above the national average. Yes, we know those pennies add up. Yes, we know you hate that monthly electric bill. But that’s only until you’ve made the switch to solar power! Right now, that penny per kWh adds up to higher bills, but once you’ve made the switch to solar, it adds up to higher savings!

Electricity costs are only going to rise. Currently far too much of our energy comes from nonrenewable, dirty fossil fuels. As the long-term costs associated with fossil fuels start to really kick in, standard electricity prices are going to skyrocket. When that happens, you’re going to look like a regular Einstein for having made the early switch to producing your own power.

Find out why electricity prices matter

Michigan Net Metering

It's complicated

Grade: C

Michigan's Net Metering grade

Solar panel installations are typically hooked up to a house's main panel, first supplying any necessary power to the house, and second sending excess power onto the electrical grid. The panels produce lots of energy while the sun shines, feeding electricity to the grid, and the house draws power from the grid when the sun isn't shining.

Net Metering is a solar billing arrangement that requires your utility to credit you full retail prices for any solar energy your solar panel installation sends to the grid. Unfortunately for Michiganders, your governor and public utilities commissioners seem too stupid to grasp this simple concept. Let us explain what we mean by that:

The solar installation connection we describe above is known as "behind the meter" (BTM), because that's where the solar panel connection takes place. It allows the electric meter to essentially "spin forward" to record any electricity the house consumes and "spin backward" when the solar panels are sending extra energy to the grid.

As of 2018, Michigan has declared that BTM solar installations are no longer required, and while most utilities in the state currently still allow net metering, that could be changing very soon.

Inflow/Outflow, and why it's stupid

In April of 2018, the state of Michigan's Public Service Commission issued an order that sets up a new method of solar installation connection they call "Inflow/Outflow," under which the panels installed on a home would be hooked up to a meter that records every kilowatt-hour they generate, paying the system owner the "avoided cost rate" for the energy (i.e. the wholesale rate the utility pays to power plants). Any energy consumed by the homeowner would, of course, be charged at the full retail rate.

Under this rule, solar installation owners essentially get to use none of the energy their systems generate, meaning they can't reduce their usage of the utility company's pricey fossil fuel energy. That's inefficient and stupid. And the avoided cost rate is laughable, considering that the benefits of rooftop solar power are worth far more than the wholesale cost of energy from traditional power plants.

Given these truths about Michigan's current solar billing arrangements, we have no choice but to give the state an F for net metering. Screw you, Michigan PSC. Do better.

Learn more about net metering

Michigan Interconnection Rules


Grade: C

Michigan's Interconnection Standards grade

Speaking of interconnection, the law supporting your residential solar power system getting hooked up to the grid is strong here as well. Like we just said, the application and review fees are capped at just $75 for interconnection. Even better, utilities are prohibited from requiring you to carry additional liability insurance, a sometimes burdensome additional cost we’ve seen imposed in too many other places.

Learn more about solar interconnection rules

Solar Incentives in Michigan

Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.

These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 30% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.

Let's see how Michigan measures up:

The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.

Michigan Solar Power Rebates


Grade: F

Michigan's Solar Rebates grade

Now the effects of the expiration of the RPS law can start to be seen. Just a few years ago Michigan had a real strong statewide solar power rebate program. But that program has gone the way of the dodo, and with the RPS goals still at a low 10%, utilities lack the incentives they need to keep offering you incentives for solar power.

Learn more about solar rebates

Michigan Solar Tax Credits


Grade: F

Michigan's Solar Tax Credits grade

Michigan also lacks any solar tax credits. Tax credits are a golden opportunity for legislators in every state to encourage solar power. Tax credits minimize both the work and the “out-of-pocket” cost to the state, so it literally costs legislators almost nothing to potentially save you thousands on a solar power system! Michigan lawmakers should take advantage of that win-win with a strong personal tax credit on the purchase of a residential system like the one you’re considering.

Learn more about state solar tax credits

Michigan Solar Performance Payments


Grade: F

Michigan's Solar Performance Payments grade

Solar power performance payments are just that; payments for every kWh of electricity your system sells back to the grid. Consumers energy used to have an application process for homeowners who want to sell their power back to the grid above retail prices. Unfortunately, they have closed the program to new suppliers.

Learn more about SRECs

Property Tax Exemption


Grade: F

Michigan's Solar Property Tax Exemptions grade

When you install a solar panel system on your home, it’s resale value goes up considerably. The best states for solar recognize this, and reward solar homeowners by exempting the extra value from property taxes. Michigan used to offer this kind of exemption, but since 2013, it’s gone baby, gone.

Sales Tax Exemption


Grade: F

Michigan's Solar Sales Tax Exemption grade

Michigan also offers no sales tax exemption on solar panel purchase and installation, meaning you’ll pay a 6% premium.

Learn more about tax exemptions for solar

The consensus on Michigan solar power rebates and incentives

Michigan isn’t all bad on the solar power front, but overall the picture isn’t too bright, at least for now. A 13-year payback timeframe and virtually no state solar incentives leaves Michigan with a “D.” We had to seriously consider dropping you down even further, but given a strong recent history, the still strong net metering and interconnection laws, and the above average electricity prices, we thought we’d offer you the benefit of the doubt.

Another reason we gave Michigan a “D” is because there is more room for improvement here than in most other states that are currently weak in solar policy:

First, just a few years ago the passage of the RPS spurred a very strong statewide incentive program that made solar policy here some of the best in the nation. So that suggests a willingness on the park of lawmakers in Lansing to help promote more clean and efficient solar power.

Second, there is room for simple but rapid improvement. While the current RPS minimum renewable energy level of 10% is quite low, it’s implementation timeframe (by 2015) is a much-nearer date than most other Renewable Portfolio Standards. Because most of the higher-minimum RPS’s have phase-in periods, 10% is not too far behind where many of the stronger overall Standards will be in 2015. That means if the Michigan legislature were to raise RPS standards now, we’d barely miss a beat in maintaining a strong level of renewable energy requirements. And just as we’ve seen in every state that’s adopted strong RPS goals, strong incentives for residential solar power follow quickly thereafter.

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John Levings
John Levings

On 18 November MIchigan’s Governor signed legislation to exempt Solar panels from all property taxes. Residential, commercial & industrially zoned properties will no longer suffer increases in property tax assessment due to roof top solar panels. (link below)


I feel that this is somewhat misleading because when you purchase via loan to own or cash your system will typically be guaranteed for at least 25- 30 years, not 20. Those extra 5 years are essentially free energy you would be giving away because the system would have paid for itself. Not to mention that most systems will continue producing for a decade or more after the warranty runs up. Also something to take in consideration about Third Party Owned systems is that most of the agreements can only be transferred to one other property owner. So if you… Read more »


We do power cell and off grid panel for low price (3 times lower that solar systems)


So Michigan still has no company i can all and to get a new roof with solar ? 49783. i need a new roof and electric bill is crazy I would like to pay more for the roof and less to the electric company. The bill is more than half fees :(


My wife and I installed a very large solar array (ground mount)-more expensive than roof mount, pay back is only 9 years (not including financing). Michigan Solar Solutions installed all of it, no work on the home owners part what so ever. They work to your needs and satisfaction, use Michigan built structures, USA Panels, Solar Edge inverters to tie to the grid. The first day of operation the old analog meter was flying backwards(Power company to install new meter in 14 days) when the sun was out… What a sight to see, Net Zero(Your bill is subtracted from your… Read more »


hard to get info in michigan.. all i get is a couple of contractors that want $15,000 to put in 5k system.. so i talked to consumer energy i can put it in my self .. called township they said call so and so to get a permit.. easy to do on my own . dont need fancy enginered stuff.. just common sense and been learning lots on youtube. bought me a fronius primo on ebay $1250 this year. it has the ability to do 2 different (mppt) facing roof lines almost a must .. now about to get solar… Read more »


I’m just looking for information for keeping up with solar energy and who’s building new homes in Michigan with solar energy and where is it located and do you have designated builders will build


I really hope the state legislature fixes some of the current issues with residential solar in Michigan and makes it more feasible to do a new installation next year. I really want to do an installation but I can’t afford it without more incentives.


It’s your house, you can add as much solar as you need.


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