Michigan
Solar in Michigan
Michigan homeowners face rising electricity costs, with rates jumping 19% from 2020 to 2024. At 19.29 cents per kWh, solar panel installation offers a smart way to lock in lower energy costs despite the state’s cloudy reputation.
Ready to explore your options? Our guide to home solar panels covers everything Michigan residents need to know about solar installation.
Key Takeaways
- Michigan electricity rates increased 19% from 2020 to 2024, making solar an attractive way to lock in lower energy costs.
- Federal tax credits cover 30% of solar installation costs through 2032, plus Michigan offers property tax exemptions.
- Average Michigan homeowners save $54,190 over 25 years with solar, despite the state’s cloudy reputation.
Solar Cost in Michigan
Our Michigan solar cost calculator uses real installation data from Detroit, Grand Rapids, Ann Arbor, and cities across the state. Get accurate pricing estimates based on actual Palmetto installations in your area.
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Looking for More Detailed Michigan City Guides?
Explore our comprehensive solar guides for major cities across Michigan to find location-specific information on incentives, installers, and solar potential.
Michigan Electricity Prices
Michigan electricity rates have climbed steadily, impacting household budgets across the state with costs above national averages.
Michigan residents pay 19.3 cents per kWh in 2024, up from 17.5 cents per kWh in 2021—a 10.3% increase over three years.
Solar panels generate electricity at a fixed cost, helping homeowners avoid future rate increases while reducing dependence on the traditional power grid.
Over 25 years, solar systems can provide predictable energy costs, protecting Michigan families from continued electricity rate fluctuations and rising utility bills.
Price of Energy: Michigan vs National Average
Michigan Area Utility Providers
Michigan’s major utilities—Consumers Energy, DTE Energy, and Indiana Michigan Power—charge varying electricity rates that impact your monthly energy bills based on 2023 data.
DTE Energy leads at 19.7¢ per kWh, while Indiana Michigan Power offers the lowest at 15.7¢. All three exceed the 2023 national average of 16.0¢ per kWh.
These higher rates reflect Michigan’s energy infrastructure costs and fuel mix. Solar installation helps homeowners reduce dependence on utility rate increases while generating clean energy.
Michigan Utilities Electricity Rates
Michigan Solar Incentives
Michigan residents can reduce solar installation costs through federal and state programs. Explore available solar incentives in Michigan below.
The federal solar tax credit covers 30% of installation costs through 2032. Michigan also offers property tax exemptions and net billing programs.
These incentives change frequently and may have deadlines. Research current programs thoroughly and consider acting promptly to maximize savings.
$6,102
Average savings in Michigan solar rebates
| Incentive | Type | Description | Source |
|---|---|---|---|
| Residential Clean Energy Credit | Federal tax credit | A federal tax credit worth 30% the cost of a solar panel system in the year it’s installed | Learn More |
| Property Tax Exemption | State tax exemption | Exempts your solar system’s added value from property tax assessment. Annual savings based on local tax rates. | Learn More |
The Residential Clean Energy Credit lets people claim a tax credit worth 30% the cost of a solar panel system in the year it’s installed. The credit can only be used against taxes you owe or have already paid that year, but any excess credit can be rolled over to future years.
The credit is broadly available, though there are a few restrictions — you must own the panels and they must be on a house you live in — so be sure to consult a tax professional about your situation.
I apologize, but the document you’ve provided does not contain information about a solar property tax exemption program in Michigan. The document is actually Senate Bill 821 from 2022, which deals with emergency services authorities and their powers to issue bonds and levy taxes for emergency services purposes.
This legislation appears to be unrelated to solar energy incentives or property tax exemptions for renewable energy systems. To provide you with accurate information about Michigan’s solar property tax exemption program, I would need the correct official documentation that specifically addresses solar energy property tax exemptions for homeowners.
Michigan’s Distributed Generation Program (Net Billing) is a statewide policy that allows homeowners with solar panels to receive credits for excess electricity they send back to the grid. Unlike traditional net metering where you receive full retail value for your solar exports, this program credits you at a reduced rate that varies by utility company and time of day. The solar energy you use directly in your home still helps you avoid paying the full retail electricity rate.
The financial benefits depend on your utility company. DTE Energy customers receive approximately 8.5 cents per kWh for off-peak exports and around 14 cents per kWh during summer peak hours (4-7pm). Consumers Energy credits range from 9-16 cents per kWh depending on season and time, with the highest rates during summer peak (2-7pm). Indiana-Michigan Power offers 12.4 cents per kWh, while Lansing Board of Water & Light provides 6-10 cents per kWh plus an additional 1.3 cents per kWh for the first five years. Any unused credits roll over month to month as dollar amounts that can be applied to future electricity bills.
This program is available to all residential solar customers in Michigan, though specific eligibility requirements may vary by utility company. There are no current expiration dates for this program, but it’s worth noting that Lansing Board of Water & Light transitioned from traditional net metering to this net billing structure in November 2022. Homeowners should understand that while they’ll receive less credit for excess solar production compared to what they pay for grid electricity, the immediate savings from using solar power in their homes remains at full retail value.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Michigan incentives.
Get a Free QuoteMichigan Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Michigan’s variable weather and seasonal sun angles create unique solar conditions. Despite cold winters and cloudy days, proper system design maximizes year-round energy production effectively.
What Can the Average Michigan Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average Michigan homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average Michigan homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Installations in Michigan
We’ve mapped every solar installation across the United States to show Michigan communities embracing clean energy. Explore this interactive map to discover how many neighbors in your area have already made the switch to solar power!
Leasing Solar Panels
Michigan residents have access to Power Purchase Agreements (PPAs) through most major utilities, including DTE Energy and Consumers Energy. With a PPA, you pay a set price per kilowatt-hour for the solar energy your panels generate, rather than a fixed monthly payment.
Palmetto’s LightReach program offers PPAs that eliminate upfront costs, maintenance responsibilities, and system ownership complexities. Unlike traditional solar purchases, you start saving immediately without loan payments or equipment concerns, while Palmetto handles installation, monitoring, and repairs at no cost to you.
This approach works well for homeowners who want predictable energy costs without the investment risks of ownership. Learn more about solar financing options to determine if a PPA fits your situation better than purchasing or traditional leasing arrangements.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes sense in Michigan despite the state’s cloudy reputation. With electricity rates at 19.3¢ per kWh and rising, solar helps lock in lower energy costs.
Michigan homeowners save an average of $54,190 over 25 years with solar, while the 30% federal tax credit and property tax exemptions reduce upfront costs significantly.
No, Michigan does not have traditional net metering. The state uses a `net billing` or `distributed generation` program where solar exports are credited at rates lower than retail electricity prices.
Credits vary by utility: DTE Energy offers 8.5-14¢/kWh, Consumers Energy provides 9-16¢/kWh, and Indiana-Michigan Power credits 12.4¢/kWh. Unused credits roll over monthly as dollar amounts applied to future bills.
Yes, solar panels typically increase home value in Michigan. A Zillow study shows solar panels increase home value by 4.1% on average across the United States.
For a typical Michigan home valued at $200,000, this could mean an additional $8,200 in home value. Michigan’s property tax exemption also means you won’t pay extra taxes on this increased value from your solar installation.
Solar installation costs in Michigan average $14,238 after the 30% federal tax credit for a typical 6.38 kW system that covers most home energy needs.
Before incentives, the system costs approximately $20,340, but federal credits and Michigan’s property tax exemption significantly reduce your investment while providing long-term energy savings.
Yes, solar is financially worth it in Michigan. Despite cloudy weather, homeowners save an average of $54,190 over 25 years while paying 19.3¢ per kWh for electricity.
With a typical payback period of 8.5 years and the 30% federal tax credit reducing upfront costs, solar provides predictable energy savings that protect against rising utility rates throughout the system’s 25+ year lifespan.
We’re proud to serve Michigan homeowners with quality solar installations and financing options. Since 2020, we’ve completed 826 installations across the state, helping families reduce energy costs.
Our team provides comprehensive support from design to installation, plus some of the industry’s best financing options. We focus on delivering reliable solar solutions that work well in Michigan’s climate conditions.