Michigan
Solar in Michigan
Solar panel installation in Michigan makes smart financial sense. With electricity rates at 19.29 cents per kWh and prices rising 19% since 2020, homeowners are turning to solar for reliable savings.
Ready to explore home solar panels? Understanding solar installation in Michigan starts with knowing your options and local benefits.
Key Takeaways
- Michigan electricity rates have risen 19% since 2020 making solar panels a smart investment for long-term energy savings.
- Federal tax credits and state incentives can save Michigan homeowners approximately $6,000 on solar installation costs.
- Solar panels work well in Michigan despite cloudy weather, generating enough energy to power your home year-round.
Solar Cost in Michigan
Our solar cost calculator uses real installation data from Michigan homeowners in Detroit, Grand Rapids, Ann Arbor, and beyond. Get personalized estimates based on actual local projects, not generic national averages.
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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 costs keep climbing, putting pressure on household budgets and making energy independence more valuable than ever.
Michigan electricity rates have risen from 17.5 cents per kWh in 2021 to 19.3 cents in 2024—a 10.3% increase that outpaces inflation.
Solar panels help Michigan homeowners generate their own electricity, reducing dependence on utility companies and protecting against future rate increases over time.
With solar systems lasting 25+ years, Michigan families can lock in predictable energy costs while utility rates continue their upward trend.
Price of Energy: Michigan vs National Average
Michigan Area Utility Providers
Michigan’s major utility companies charge varying electricity rates. In 2023, DTE Energy averaged 19.7¢ per kWh, Consumers Energy 18.8¢, and Indiana Michigan Power 15.7¢.
These rates exceed the 2023 national average of 16.0¢ per kWh due to Michigan’s aging infrastructure, coal dependency, and transmission costs across the state’s large service areas.
Higher electricity costs create greater potential savings with solar panels. Fixed solar energy costs protect Michigan homeowners from future utility rate increases and seasonal price fluctuations.
Michigan Utilities Electricity Rates
Michigan Solar Incentives
Michigan homeowners can reduce solar installation costs through valuable solar incentives in Michigan at federal and state levels.
The Property Tax Exemption protects you from increased property taxes on your solar system’s added home value, providing ongoing annual savings.
Net billing programs let you earn credits for excess solar energy, though utility buyback rates vary significantly.
$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 appears to be about emergency services authorities and municipal bond financing, not a solar property tax exemption program. The text discusses how municipalities can form authorities to provide emergency services and issue bonds to finance buildings, equipment, and facilities for those services.
This document does not contain information about solar energy systems, renewable energy incentives, or property tax exemptions for solar installations. To provide you with an accurate description of Michigan’s solar property tax exemption program, I would need the correct legislative text or official documentation that specifically addresses solar energy property tax benefits for homeowners.
Michigan’s Distributed Generation Program (Net Billing) is a state-wide 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 exported power, this program credits your excess solar generation at rates lower than what you pay for electricity from the grid. The program operates across multiple utilities including DTE Energy, Consumers Energy, Indiana-Michigan Power, and Lansing Board of Water & Light, each with slightly different credit rates.
The financial benefits vary by utility company. DTE Energy customers on the Standard Time of Use rate 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 of day, with the highest rates during summer peak hours (2-7pm). Indiana-Michigan Power offers 12.4 cents per kWh for all exports, 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 when you transfer your renewable energy credits to them. All utilities allow you to roll over unused credits month to month as dollar amounts that apply to future supply charges.
The program is available to all residential solar customers, though Lansing Board of Water & Light ended their 1:1 net metering program on November 1, 2022, meaning new customers after that date fall under the net billing structure. Monthly settlement periods mean your credits and charges are calculated each month. An important consideration is that solar energy you use directly in your home still avoids the full retail electricity rate, making self-consumption of your solar production particularly valuable under this billing structure.
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 seasonal sunlight changes and snowy winters create unique solar conditions. Despite weather concerns, proper system design makes Michigan surprisingly effective for solar energy production.
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 create this interactive heatmap of Michigan. Click any hexagon to discover how many neighbors in that area have already made the switch to clean energy!
Leasing Solar Panels
In Michigan, Palmetto offers Power Purchase Agreements (PPAs) through our LightReach program for customers served by DTE Energy and Consumers Energy. With a PPA, you pay a set price per kilowatt-hour for the electricity your solar panels generate, rather than a fixed monthly amount.
Unlike traditional solar ownership where you handle maintenance and repairs yourself, LightReach includes everything: installation, monitoring, maintenance, and repairs at no additional cost. We guarantee your system will produce at least 90% of its projected energy, crediting you the difference if it falls short.
This approach offers predictable energy costs without the upfront investment, loan payments, or maintenance responsibilities of ownership. Compare your solar options to see if a PPA makes sense for your situation and utility provider.
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 excellent financial sense in Michigan. With electricity rates at 19.3¢ per kWh and rising 19% since 2020, solar panels provide predictable energy costs and substantial savings.
Michigan homeowners save approximately $54,000 over 25 years with solar. The 30% federal tax credit and state property tax exemption reduce upfront costs, while net billing programs provide credits for excess energy production.
Michigan does not have traditional net metering. Instead, the state uses net billing programs where utilities credit excess solar energy at rates below retail electricity prices.
DTE Energy credits 8.5-14¢/kWh depending on time of day, Consumers Energy offers 9-16¢/kWh, and Indiana-Michigan Power provides 12.4¢/kWh. Credits roll over monthly and apply to future supply charges.
Yes, solar panels increase home value in Michigan. Research from Zillow shows solar panels increase home value by 4.1% on average nationwide.
In Michigan’s housing market, this translates to approximately $8,000-$12,000 in added value for typical homes. Additionally, Michigan’s property tax exemption means you won’t pay higher property taxes on your solar system’s added value, maximizing your financial benefit.
Solar installation costs in Michigan average $14,238 after the federal tax credit. Before incentives, a typical 6.38 kW system costs around $20,340, but the 30% federal tax credit reduces this by $6,102.
Michigan’s property tax exemption provides additional ongoing savings by protecting you from increased property taxes on your solar system’s added home value, making solar an even more attractive investment.
Yes, solar is financially worth it in Michigan. With electricity rates at 19.3¢ per kWh and rising 19% since 2020, solar provides predictable energy costs and protection from future rate increases.
Michigan homeowners typically save $54,000 over 25 years with solar. The 30% federal tax credit and property tax exemption reduce upfront costs, while an 8.5-year payback period makes solar a solid long-term investment.
We’re Palmetto Solar, and we believe we offer the best solar installation experience in Michigan. Since 2020, we’ve completed 826 installations across the state, serving homeowners from Detroit to Grand Rapids with professional service and competitive financing options.
Our national expertise combined with local focus means we understand Michigan’s unique solar conditions, utility programs, and incentives. We offer some of the industry’s best financing options and maintain a trusted network of certified installers throughout the state.