Michigan Solar Panels

Michigan’s property tax exemption, established under MCL 211.7hh, ensures that when you install a solar energy system on your home, the increased value it adds to your property is not counted in your tax assessment. This means your property taxes will not go up as a result of going solar — a significant long-term benefit for Michigan homeowners.

The exemption applies to residential solar systems up to 150 kW in capacity, which covers virtually all home installations (most Michigan residential systems are 8–12 kW). The exemption also covers battery storage equipment paired with your solar system. At Michigan’s average property tax rate of approximately 1.25%, a $25,000 solar system could otherwise add $300–$435 per year to your tax bill — savings that compound to $6,000–$8,700 over a 20-year system lifespan.

This exemption applies automatically statewide and does not require a separate application by the homeowner. It was reinstated in 2019 under Governor Whitmer and remains fully active in 2026.

When you purchase a solar energy system in Michigan, you are not required to pay the state’s 6% sales tax on the equipment. This exemption applies to the full solar energy system at the point of purchase, including solar panels, inverters, racking hardware, and battery storage components — providing an immediate reduction in your upfront installation costs.

For a typical residential solar system costing $20,000–$30,000, the sales tax exemption saves homeowners $1,200–$1,800 right away, before the system ever generates a single kilowatt-hour. This exemption is applied automatically at the time of sale by the installer or retailer and does not require a separate application from the homeowner.

This is one of Michigan’s most straightforward solar incentives — it requires no paperwork, no income qualification, and no system size minimum. It is available to all Michigan residents purchasing a qualifying solar energy system.

Michigan replaced traditional net metering with the Distributed Generation (DG) Program under Public Act 235 (2023). Under this program, residential solar owners receive bill credits for any surplus electricity their systems export to the grid. For systems 20 kW or smaller — which covers the vast majority of home installations — excess generation is credited at the full retail electricity rate and can be carried forward to the next billing period, effectively spinning your meter backward.

Credit rates vary by utility: DTE Energy credits range from approximately $0.0775–$0.14/kWh, Consumers Energy from $0.09–$0.16/kWh, and Lansing Board of Water & Light from approximately $0.06–$0.10/kWh. For systems between 20 kW and 550 kW, credits are issued at the avoided cost rate, which is lower than the retail rate. A small number of Michigan utilities — including Cloverland Electric Cooperative and Alpena Power — still offer traditional one-to-one net metering.

Michigan raised the statewide DG program cap from 1% to 10% of utility peak load in 2023–2024, significantly expanding access. Residential net metering is available statewide under standard utility interconnection procedures with no additional fees for most customers. Contact your specific utility to confirm current credit rates and enrollment procedures.

DTE Energy’s Solar Currents Program is one of the most generous utility solar incentives in Michigan. Eligible residential customers within DTE’s service territory — which includes Detroit, Ann Arbor, Flint, Livonia, and surrounding areas in southeastern Michigan — receive an upfront rebate of $2.40 per watt of installed solar capacity. For a typical 7 kW residential system, that upfront rebate alone amounts to approximately $16,800, dramatically reducing your net installation cost.

In addition to the upfront rebate, participants receive a long-term production incentive of $0.11 per kilowatt-hour (kWh) for all solar electricity generated under a 20-year contract. This ongoing payment is made regardless of whether you use the power on-site or export it to the grid, providing a reliable income stream over the life of your system.

To apply, contact DTE Energy directly at (313) 235-4786 or email [email protected]. Capacity blocks can fill up, so it is advisable to apply early. The program is available to residential customers only within DTE’s service territory.

Consumers Energy offers its residential solar customers the SolarCurrents program, a performance-based incentive that pays participants for the solar electricity their systems generate. The program is available to customers within Consumers Energy’s service territory, which covers much of Michigan’s Lower Peninsula outside of the DTE Energy service area.

For a 9 kW system in Grand Rapids producing approximately 11,340 kWh per year (based on 4.2 peak sun hours per day), SolarCurrents pays roughly $284–$397 per year over the contract term, totaling $2,840–$3,970 over 10 years. This production incentive is paid on top of the bill credits you receive through Michigan’s Distributed Generation program for excess power exported to the grid.

Contact Consumers Energy directly through their website to confirm current program availability, payment rates, contract terms, and the application process, as program details and capacity availability may change. Visit consumersenergy.com for the most up-to-date enrollment information.

The Lansing Board of Water & Light (LBWL) offers a solar rebate program exclusively for residential customers within its Lansing, Michigan service territory. The rebate is $500 per kilowatt (kW) of installed solar capacity, with a maximum rebate of $2,000 for systems up to 4 kW in size.

Since the average solar array size in the Lansing area is approximately 7 kW, most eligible residents will qualify for the full $2,000 maximum rebate. This upfront cash rebate directly reduces your out-of-pocket installation costs and can be combined with Michigan’s state-level sales and property tax exemptions as well as the LBWL’s net metering credits.

Contact LBWL directly before scheduling your installation to confirm current program availability, eligibility requirements, and the application process, as rebate funding may be limited. Visit lbwl.com for the most current program details and to begin the enrollment process.

WPPI Energy, which serves much of Michigan’s Upper Peninsula through a network of member utility companies, offers a solar photovoltaic (PV) rebate of up to $10,000 or 35% of the total installed system cost, whichever is lower. This rebate is available to residential and small commercial customers of participating WPPI Energy member utilities in the Upper Peninsula.

Participating Michigan utilities include: Alger Delta CEA, Baraga Electric Utility, Crystal Falls Electric Department, Gladstone Power and Light, L’Anse Electric Utility, Negaunee Electric Department, and Norway Power and Light. If you are a customer of one of these utilities, this rebate can significantly offset the cost of going solar in a region where installation costs may be higher due to remoteness.

Contact your specific WPPI Energy member utility directly to confirm current program availability, eligibility requirements, system size limits, and the application process. Program funding and terms may vary by member utility and are subject to change.

Great Lakes Energy Cooperative offers home battery storage incentives to eligible residential customers through its Energy Wise Rebate program. The rebate is available for qualifying two-way communication backup power systems, making it one of the few utility-level battery-specific incentives available in Michigan.

This program is available to Great Lakes Energy customers, whose service territory covers portions of northern and west-central Michigan’s Lower Peninsula. Battery storage systems paired with solar can help homeowners maximize their solar self-consumption, reduce reliance on the grid, and provide backup power during outages — all while potentially qualifying for this rebate.

Contact Great Lakes Energy directly to confirm current rebate amounts, eligible battery models, application requirements, and program availability, as details are subject to change. Visit glenergy.com or call your local Great Lakes Energy office for the most up-to-date information.

Michigan’s Solar Energy Facilities Taxation Act (2023 PA 108) provides a significant tax incentive to owners of utility-scale solar energy generation facilities. A Solar Energy Facility Exemption Certificate (SEFEC) entitles a qualified facility to an exemption from ad valorem real property taxes for a term of 20 years, replacing the standard property tax with a fixed annual payment.

The fixed annual payment equals $7,000 per megawatt (MW) of nameplate capacity (alternating current). To qualify, a facility must be located in a designated solar energy district and use solar energy as the sole source for the generation of at least 2 megawatts of nameplate capacity (AC). This incentive is designed for commercial and utility-scale solar developers, not residential homeowners.

Applications for the SEFEC are processed through the Michigan Department of Treasury. Developers interested in this exemption should visit michigan.gov/taxes for application forms and eligibility details, or contact the Michigan Department of Treasury directly for guidance on the certification process.

Michigan Saves is a nonprofit green bank that offers homeowners access to competitive financing for solar panel and battery storage installations. Through its Home Energy Loan Program, Michigan Saves negotiates favorable interest rates with a network of participating lenders, offering current rates between 4.44% and 7.90% APR — often lower than standard home improvement loans or credit cards.

Eligible loan amounts range from $1,000 to $50,000, with repayment terms of up to 15 years, making it possible to finance a full solar-plus-storage system with manageable monthly payments. The program is available to Michigan homeowners statewide and can be used for new solar installations, battery storage additions to existing systems, or solar system upgrades.

To apply, visit michigansaves.org to find a participating lender and contractor in your area. Michigan Saves-approved contractors have been vetted for quality and can help guide you through both the installation and financing process.

Property Assessed Clean Energy (PACE) financing, administered in Michigan by Lean & Green Michigan, is a powerful tool for commercial, industrial, multifamily housing, agricultural, and nonprofit property owners looking to install solar panels or battery storage with no upfront out-of-pocket costs. Under PACE, the cost of the solar installation is repaid through an assessment added to the property’s tax bill over a period of up to 25 years.

Because repayment is tied to the property rather than the individual borrower, PACE financing can be easier to qualify for than traditional loans and does not require a large down payment. If the property is sold before the loan is repaid, the remaining balance can transfer to the new owner along with the solar system — a feature that can also be a selling point for the property.

PACE is available for commercial, agricultural, and nonprofit properties in Michigan — it is not available for standard single-family residential properties. Contact Lean & Green Michigan directly at leanandgreenmichigan.com to learn more about eligibility, participating lenders, and how to begin the application process.

The USDA Rural Energy for America Program (REAP), significantly expanded under the Inflation Reduction Act, provides grants to help agricultural producers and rural small businesses in Michigan offset the cost of installing solar energy systems and battery storage. Grants can cover up to 50% of total eligible project costs under IRA-funded REAP rounds, or up to 25% under base Farm Bill funding. Grants for renewable energy systems like solar PV are generally capped at $1 million per project.

REAP is particularly valuable for Michigan’s farming communities in the Lower Peninsula and rural Upper Peninsula. Eligible applicants include agricultural producers (farms, greenhouses, orchards, wineries) and small businesses with gross revenues under $1 million located in rural areas outside cities with populations over 50,000. Battery storage systems paired with solar are also eligible for REAP funding.

Applications are accepted on a rolling basis through USDA Rural Development. Michigan agricultural producers and rural businesses should contact their local USDA Rural Development state office for current funding availability, application deadlines, and eligibility requirements. Visit rd.usda.gov for more information and to find your local USDA Rural Development office.

Michigan does not have a formal Solar Renewable Energy Credit (SREC) market like some other states, but Michigan solar owners can create an account with the Michigan Renewable Energy Certification System (MIRECS) to track and potentially sell the Renewable Energy Credits (RECs) their systems generate. Each REC represents one megawatt-hour (MWh) of solar electricity produced and can be sold to utilities or other buyers seeking to meet renewable energy goals.

RECs in Michigan have a lifetime of only three years from the date of generation, so it is important to sell or retire them in a timely manner. A typical 10 kW residential solar system in Michigan can generate estimated annual REC income of approximately $300–$1,000, depending on market conditions and buyer demand at the time of sale.

Note that Michigan does not have a mandatory SREC market or a state Renewable Portfolio Standard that specifically requires solar, so REC prices and demand can be variable and are not guaranteed. Some Michigan homeowners in border areas may also explore selling RECs into Ohio’s market depending on utility rules. Contact the Michigan Public Service Commission or visit the MIRECS registry for more information on how to register your system and begin tracking your RECs.

The Ann Arbor Solarize Program is a community-driven bulk-buy initiative that leverages group purchasing power to help residents secure significant discounts on solar installations. By aggregating demand from many homeowners at once, the program negotiates lower per-watt pricing with vetted local solar installers — resulting in discounts of up to 15% compared to standard market rates.

The program has expanded beyond Ann Arbor and now covers participants in Grand Rapids, Lansing, Kalamazoo, and Oakland, Washtenaw, and Wayne counties. Since its launch, Ann Arbor Solarize has helped hundreds of Michigan residents reduce their solar costs while increasing the region’s renewable energy capacity. The savings depend on the number of participants, the selected installer, and other applicable incentives — and can be stacked with Michigan’s state tax exemptions and utility rebate programs.

Solarize campaigns run periodically throughout the year. Contact the City of Ann Arbor’s Office of Sustainability or the Great Lakes Renewable Energy Association (GLREA) to find out when the next campaign is open for enrollment. Visit a2gov.org for current program status and sign-up information.

The Ann Arbor Sustainable Energy Utility (SEU), authorized by approximately 80% of Ann Arbor voters, is a groundbreaking city-owned program designed to make solar and battery storage accessible to all residents — including renters, low-income households, and those who cannot afford the upfront cost of a traditional rooftop solar installation. Unlike standard solar programs, the SEU owns the equipment and customers pay a predictable monthly rate for access to solar and battery storage benefits.

The SEU model eliminates the need for homeownership or a large upfront investment, making clean energy accessible to a much broader segment of the Ann Arbor community. Pilot projects targeting lower-income neighborhoods are expected to launch in 2026, with citywide expansion planned for 2027. The program is particularly significant for the estimated 50%+ of Ann Arbor residents who rent their homes and have historically been unable to participate in rooftop solar programs.

For the most current information on program launch dates, eligibility, monthly rates, and how to sign up, visit the City of Ann Arbor’s sustainability pages at a2gov.org or contact the Ann Arbor Office of Sustainability directly.