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2017 Policy Grade


Avg. Yearly Savings


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

2017 Policy Grade


Avg. Savings/year


At Solar Power Rocks, our dream is to turn your thoughts of solar power for your home into reality

Note: The numbers above are just estimates for a 5-kW solar system, and your home is unique. The best way to know exactly how much money solar power can save you is to connect with one of our partners nearby. A friendly solar expert we trust will give you a buzz and help you craft a personal plan to get the absolute most out of a solar power system for your home. It's 100% free (yes, that’s right, 100% free) and you aren't obligated to buy anything.

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.

Your guide to going solar in Michigan

We've designed this page to be a complete guide to the complicated and sometimes confusing process of installing solar panels on a home in Michigan. Since there's a lot of important information 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!

The Solar Strategy section is all about the various financial options you have in Michigan. We've created a tool that asks you a few questions about what you hope to get out of a solar purchase and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we give you a detailed picture of how each could work for you.

The Policy Information section contains all of our latest research on the rules set by the state legislature and public utilities commission that determines how easy it is to go solar in Michigan. These policies and rules govern everything from renewable energy mandates to whether you get paid retail or wholesale rates for the extra energy your system produces, and can have a huge effect on the viability of solar.

Finally, the Solar Incentives section lists all of the available financial benefits available to homeowners who go solar. This section includes information about money-back rebates and grants, tax credits, and tax exemptions. If you're looking for what Michigan is doing to make solar more affordable for its citizens, you'll find it here.

We hope you find our work useful. If so, please help us keep our research and advocacy as strong as possible by sharing it with someone who might also find it interesting, contributing any amount you can, and by getting yourself personalized savings estimates from our trusted partner network.

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!

Compare the Return of Different Solar Investments 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!

Net Present Value of Solar in Michigan

“Net Present What?!” Don’t panic, this isn’t an economics test. NPV is just a tool used to compare investments. Basically, it asks, “if you had X dollars to invest, which investment would get you the best return?” It relies on the idea that getting a return on your investment sooner is better than later, because you can reinvest your early profits and keep the gain train going.

We compare an investment in solar to a “what-if” investment in a Standard & Poor’s (S&P) 500 stock index fund, which has seen growth of about 7% per year over the past 25 years. We use the cost of solar in Michigan and ask “how much better or worse (in 2017 dollars) is an investment in solar than stocks?” Here's what we found for the three different ways of going solar in Michigan:

blue  Solar Power-Purchase Agreements in Michigan

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:

Example savings in Michigan

Annual Electric Bill Before Solar


Annual Electric Bill After Solar


Est. Annual Solar Payments


Average Annual Savings


Power-Purchase Agreements (PPAs) are the most popular form of what's called "third-party solar." A PPA just means your solar company owns the panels on your roof, and you pay for the electricity they produce. The numbers above show the savings with a solar PPA for an average home in Michigan. The typical electric bill before solar power is super expensive, but with a PPA, your monthly expenses will be lower. You'll be saving money and saving the planet all at the same time!

Here's an estimate of the monthly savings for a solar PPA in Michigan:

Monthly solar PPA savings in Michigan

With a PPA, your solar company essentially becomes a second utility provider, only the solar electricity is sold to you at a lower rate than the fossil fuel electricity you've been buying from the electric company! Note: your PPA won't eliminate your power bill from your regular electric provider, because you'll still need energy from the grid when the sun isn't shining. But it will save you money!

The less-popular cousin of the third-party solar family is the solar lease. It's basically like renting your panels for a set monthly payment, and getting all the energy they produce—however much it is. Don't get spooked by that language, though. A typical solar lease comes with energy production guarantees that will make sure you're getting what you paid for. In fact, if you're not offered a production guarantee with a solar lease, walk away.

Here's the best part of third-party solar: whether you end up with a lease or a PPA, the installation company owns the panels and will do all the maintenance for you. Usually that means just a good cleaning every year, but if any part of that system fails, you're off the hook! That can be a great benefit to homeowners who are risk averse.

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 lease or PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Home Solar Power: PPA vs. Purchasing

To PPA, or not to PPA? Willsolar Shakespanels would be proud we're discussing this. Here's the basic deal. If you choose to lease your panels, you benefit from no out of pocket costs and an immediately reduced total electricity payment. Because of this, many regard this option as a no-brainer, since there isn't any downside to think of. The only hiccup you'll start to experience is when you consider the long term financial benefit of owning the solar panel system yourself.

In many situations, if you can afford the outlay or can easily secure financing, the cost of the install becomes an investment with a return outpacing even the strongest performing mutual funds. In addition, there's significantly less principal risk, since the energy credits you will be producing are tied to the sun coming up in the morning instead of our financial markets!

Additionally, if you go the PPA route, you must forfeit all the credits and performance payments you would receive by owning the system yourself to the solar PPA company (after all, that's how they can afford to give you such a no-brainer proposition in the first place).

orange square  Solar Loans in Michigan

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.

green square  Buying Solar in Michigan

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.

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 Florida—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:


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 electrciity 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!

What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.

An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.

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.

What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.

Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.

For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!

Michigan Electricity Prices


Grade: A

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.

Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.

The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.

Michigan Net Metering


Grade: F

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 utilties 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.

What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.

The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.

Michigan Interconnection Rules


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.

Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.

Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.

Solar Incentives in Michigan

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.

How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.

The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.

Michigan Solar Power 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.

About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.

(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)

The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.

Solar Power 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.

Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!

Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.

Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.

If you don’t know what an SREC is, or how they work, check out this great SREC video

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.

About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Many argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing. Leasing still has a positive impact on the ability to sell your home though, in our opinion).

For many average-sized solar power systems on a house, that can mean $20,000 to your home value. (Edit April, 2014: Some companies, like Solar Mosaic, are starting to offer traditional style equity-based home loans for such a thing). An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!

The availability of a property tax exemption for solar energy was also sourced from the Database of State Incentives for Renewables and Energy Efficiency. The stronger the tax exemption, the higher the grade.

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.

What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).

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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.

39 thoughts on “2018 Guide to Michigan Home Solar Incentives, Rebates, and Tax Credits

  1. Ryan says:

    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 want to sell your property, that could present some challenges.

  2. ALTECHLAB says:

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

  3. J says:

    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 :(

  4. Anonymous says:

    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 credits until you get to zero)… The owner Mark will give you a detailed report before you ever sign, showing exactly what you will produce/when/how much/ect. Our future goal is to go off the grid and add a turbin, but as it looks, it really isn’t necessary, we will have no bill because of the credits you get when it is cloudy from Consumers. In 9 years, we will have paid for the system, and the rest after the 9 years stays in our bank account (pay off day) for future investing.Your resell value on your house will be higher, (Just think, net zero power bill) What a nice way to retire, never having to worry about utility bills. You can also apply for SREC energy credits, more money in the bank. 30% write off on the amount of your bill at tax time, a direct reduction, not like the usual hot water heater credit. Keep in mind, you can only deduct in the first or 2nd year based on how much Fed. tax you pay. If you don’t have much tax, you can carry it over to the next year until you use the credit up. With Michigan Solar, the panels are on a 25year warranty, if one breaks or stops working, they replace it (no work to you)….. I went through the entire install with their install guys and electricians. The system can be monitored daily from my phone or desk top, seeing each array and what it’s putting out. Very cool indeed… They even have a recommended finance agency to help you get over that hill if needed. Very professional, will fix any problem you might have, will work with you fully… example: Wanted an off grid system, so they installed a disconnect after the meter, before my panel so I could shut off

  5. jr says:

    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 panel on ebay also.. consumer lady is great.. i did a googlemap picture and drew lines on it how powerlines came into house and where panels boxes etc are going she said that will work great.. dont need any special program designer to draw frickin lines. save yourself money and learn it.. i think ill have about $4500 give or take into my 5000kw system by doing it myself and using old aluminum square stock i have to build racking system. come on look at there designs and use some common sense.. put panel where u want/ long bolt,nut big or slats of steel for a bigger washer to hold panel down.. who cares if i have a 2 inch gap between them and a extra bolt to hold next panel down.. or if i put them close enough i can get both with one big washer.. save money ebay it and youtube it..

  6. Dan says:

    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

  7. Jeff says:

    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.

  8. MRB says:

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

  9. Anonymous says:

    I just spoke with my local township assessor in regards to property taxes and he said that the solar system is considered personal property, not real property so it is exempt from increasing your property taxes in MI.

  10. Anonymous says:

    solar rocks

  11. Anonymous says:

    “Essentially, you’re renting out your rooftop to a company who then pimps it out with solar panels. Then, you pay a lease payment to them for the power it produces. In each case, this payment added to your existing power bill will be lower than your previous bill, netting you instant savings with nothing down out of pocket! How awesome is that?!”

    1. Patrick Kilhoffer says:

      It’s pretty darn awesome!

  12. Anonymous says:

    I signed up for the Consumers Energy EARP program and installed a 10.1K system…Since November 21,2014 I have generated 4500kwh or $1165 in energy value at .259 /kwh. Very happy with my system…now thinking about solar hot water to preheat my Geothermal tank water to reduce electrical use there…If you are thinking of solar and you are a consumers energy customer fill out the app for EARP and do it…best thing I ever did….feel free to contact me for info on my set up.

  13. DW says:

    Read thru the list of comments and they are somewhat negative, but if you put in solar yourself you can save about half the cost still get back 30% and the payoff is far better than 15 years. I am looking at 5 – 7 right now. First month made over 500 kWh on 5K system. So talk all you want, but solar is great and great for the environment. A $30000 dollar car goes down in value every year but $30000 into solar only goes up in value and lowers your costs for electricity while saving the fossil fuel. The younger you are the better the return over your lifetime!

  14. Anonymous says:

    If only Solar wasn’t so expensive. i started selling solar energy systems back in 1980, thanks to the tax credits that added up to 70%, back then. Only problem we the tax payers end up paying for all the tax credits. We need something that competes with fossil fuels, so far wind is by far the best way to go, as far as electrical prodution goes. I was working at United Solar in Greenville and saw the demise of one of the leaders in solar. They were to dependant upon goverment subsidies in Europe and other countries, Now domestic hot water is still a feasible use for solar , especially if you build your own system.

  15. Jerry says:

    Hello to all..ive been doing solar now for over 7 years.ivd i burnt solar panels up to see what they can handel. I build hi power panels like 32volts @ 40 amps. This is one panel size of panel. 32×37 inches On cloudy days this panls still has volts. Well over 19 volts at 20 amps which is good. Michigan will be great for solar power. I had meeting with grams and Carl Levin i think if u are not lining pockets solar will go no where. I say cut off the hand of lining pockets i had 5 diffrent meetings they rather give uni solar 526 billion so this Company.can file bankruptcy bp bought the solar Company told them to file chapter so they don’t have to pay back anything that was borrow. i will show video soon on you tube so people can see it ive showed some people video from my phone.

  16. jeff anderson says:

    very nice i think we need to start using solar power instead of fuels good job guys

  17. TTT says:


    The current customer-owned SolarCurrents program that is being offered by Detroit Edison accepts only Grid-Tied solar systems, which means the solar system depends on the presence of the utility. When you lose power, the grid-tied solar system will not be able to generate energy. However, to utilize the solar panels when the utility is not presence and still be eligible for the SolarCurrents program, people connected a battery system through an off-grid inverter in addition to the grid-tied inverter. The installation cost for this type of solar system is quite pricey.

  18. M says:

    Tim and others, A great place to start for solar training & just basic info is the Great Lakes Renewable Energy Association (GLREA)in Dimondale.

  19. Tor a.k.a. "Solar Fred" says:


    That feed-in-tarriff has not past, but there are some substantial rebates still. Please see the link below for DTE program.

    We don’t give individual quotes, btw, but we’re happy to set you up with someone in your area who does. :) Please fill out our form. Thanks.

  20. dsb62 says:

    I posted somthign similar to Solar Fred.

    Has the feed in tariff described above passed, I cant find anything

  21. Rick Waite says:

    The details of Consumers Energy Program are on
    The monthly metering charge for residential systems is only $6/month

  22. Dan Hahn says:

    Hi Jeff,

    I actually updated the page today due to your question tonight. So, thanks for your question and I hope you find the info useful!

    – Dan

  23. Jeff Ostrom says:

    In the body of this site you reference a $.65/Kwh feed-in tariff that is contained in a “new energy bill”. I have been unable to find another reference to said bill. Can you help direct my efforts?

  24. Pete says:

    Solar Energy will Fail! Under the guise of Global warming the department of Energy (DOE) is part of the program of spraying to form clouds,some people call them chemtrails. Our future is growing Dimmer everyday, which is man made and the men involved are the(CFR). Call senator Levin and ask him about it.Senator Levin is very smart and very informed, I just wish he was on our side (The side of the People).

  25. Dale says:

    Correct me if I’m wrong here, but isn’t Michigan’s proposed buy back of $.65/kWh for unused Solar Power a mute point? Since most residential solar generation systems only generate about 25% -50% of the total power used by a household, there wouldn’t be any power being sold back to the power companies. It may sound good, but it looks like there is no bite that goes with this bark…

  26. Tim says:

    I have been a residential builder/re modeler for 25 years. Self employed. Business is slow now. How do I become informed and educated as how to offer these to customers and become certified with solar panel system installation installation in Michigan.

  27. cathy says:

    was wondering if we install a solar panel system in Michigan and lose power from DTE like we do every year during the summer storms will our system keep running the house

  28. Rick Middleton says:

    Has there been an update on the progress of these Michigan bills?

  29. Stan Graff says:

    It would be helpful to be able to deduct the cost of the solar installation from any gains when one sells a house. With payback of 8 years, it may not seem worth it. But with a huge deduction when you sell, it would be great.

  30. Keith Warnick says:

    For businesses and government agencies in need of eco-friendly, quiet and trailerable electricity, I represent SolaRover; solar-powered generators. 10kW or 20kW capacity. No noise, fumes and payback in 3 to 5 years. Can be used as a source for electric car recharging. Contact keith(at)keithwarnick(dot)com for more information.

  31. Mark Hagerty says:

    Gerald, you are absolutely correct about Michigan’s wind potential. 14th in the entire nation. Michigan just commissioned two 2 megawatt turbines this month. Although the impression you left about our potential for solar is off. Michigan has 4.2hrs of peak sunlight daily, on a yearly average. This is far more than Germany has. Germany is 50% ahead of their goal of 20% renewable by 2020 because of solar. Solar also produces the most when utility companies are at peak demand, keeping us from needing more coal plants. Please check out for the ‘Fun Facts’ section and the ‘MSS Blog’

  32. Dave says:

    I just found your site and its very interesting!! I am happy to find a site that deals with solar in Michigan and all across the country as well. I am a student at St. Clair Community College in Port Huron, MI, and my field of study is altrnative energy.

  33. Gerald says:

    I’m amazed how Michigan pushes solar having only about 85 clear days a year… We are much better suited for wind having more coastline than any other state….however virtually no incentives for wind power. A single small turbine generates more power, more reliably than a dozen large solar panels…nonetheless at least effort is being made for alternative energy.

  34. Dan Hahn says:


    Thanks for your comment and call to contact those folks in Lansing!

  35. Mark Hagerty says:

    If you truely want Michigan to adopt renewable friendly legistlation please contact your local State Congressman also please contact;

    Jennifer M. Granholm, P.O. Box 30013 , Lansing , Michigan 48909
    Frank Accavitti, Jr., P.O. Box 30014 , Lansing , Michigan 48909

    Please tell them to fully support HB5218, HB5548 and HB5549.

    HB5218, sponsored by State Representitive Kathleen Law 23rd District, is discribed above.
    HB5548 and HB5549 will require the utility companies to include renewable sources in their respective energy portfolios.

    You can make a difference if you act.
    Thank you
    Mark Hagerty

  36. Chad says:

    I think everybody in Michigan should get solar panels. If i can create the energy i use and it also creates jobs lets all jump on the band wagon.

  37. ken wallace says:

    I owned a solar energy co. 1981 to 1985 until the energy tax credits ended (selling airwalls). does anyone think there’s any future in these systems if we can get back our 50% federal tax credits?

  38. alex says:

    check out the new bil just introduced!

    HB 6006 of 2008 Income tax; credit; for the purchase and installation of certain residential renewable energy systems; create.

    Its about time!

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