Is solar worth it in Michigan?
For a typical Michigan home in 2026, solar is a close call: about a 16-year payback and $9,418 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.
- Payback, typical home
- 16 yrs3 kW, paying cash
- Electricity price
- 21.1¢per kWh, U.S. 18.0¢
- Solar production
- 1,290kWh per kW per year
- Exports credited at
- ~43%Net billing (reduced export credit)
The numbers for a typical Michigan home
| Electricity use | 629 kWh a month (Michigan average) |
|---|---|
| Best-value system | 3 kW, producing 3,870 kWh a year (51% of use) |
| Price | $11,900 at about $3.30/W |
| First-year savings | $684 |
| Payback | 16.0 years |
| 25-year net | $9,418 (4.5% a year return) |
| Rate increase assumed | 3.3% a year, from Michigan's 2015–2025 history |
Paying cash, no federal credit, 5% discount rate, microinverters, $25 per kW a year for maintenance and repairs. Methodology.
Why it comes out this way
- Electricity is expensive: 21.1¢ per kWh over the last 12 months, 17% above the U.S. average (18.0¢).
- Exported solar is typically credited at about 43% of retail, so systems pay best when sized for what you use yourself.
- A typical system here produces about 1,290 kWh per kW per year (ranked #42 of 51).
- There is no federal tax credit for homeowners who buy in 2026, which adds several years to payback compared with 2025.
Net metering and export rules in Michigan
Net billing (reduced export credit). Michigan's IOUs use a 'distributed generation' inflow/outflow tariff: you save the full retail rate on solar you use directly, but power sent to the grid is credited only at roughly the power-supply portion of the rate (about 8-15 cents depending on rate/time).
Outflow credited at the power supply component of the customer's rate (DTE subtracts transmission; Consumers includes transmission since 2023). Consumers RSP ~8.5 cents off-peak, ~15 cents summer on-peak.
- Netting: instantaneous
- Unused credits: Outflow bill credits go into an excess generation bank that carries forward and does not expire (DTE); can offset all charges except securitization.
- System size limit: 150 kW
- Fixed charges: Standard monthly service charges (~$8-10). Category 1 systems <=20 kW.
- Last major change: DG program replaced net metering after 2016 PA 342 (DTE 2019, Consumers 2020); 2023 clean energy law raised cap from 1% to 10%.
- Pending: Utility rate cases periodically change power supply rates (and thus outflow credit).
Read net metering explained to see why export rules can swing payback by years.
| Utility | Export credit | Notes |
|---|---|---|
| DTE Electric | 9¢/kWh | Outflow = power supply minus transmission; 2019 value 7.477 cents; current value likely higher after rate cases (not verified). TOU (D1.11) default for residential. |
| Consumers Energy | 8.5¢/kWh | Tariff (Apr 2025): RSP outflow $0.085252 Oct-May, $0.150563 summer on-peak; includes transmission. Summer TOU default. |
Solar incentives in Michigan
The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.
| Program | Type | What you get | Status |
|---|---|---|---|
| Property tax exemption (distributed generation) | property tax exemption | Residential solar (<150 kW) exempt from increasing property value assessment (2018 PA 397/398 as commonly reported) - verify with assessor. Eligibility: Residential systems <150 kW | unknown |
| Michigan Saves | loan program | Green bank financing for solar/batteries via approved contractors. Eligibility: Residential | active |
| Sales tax | sales tax exemption | Some sources claim a sales tax exemption on solar equipment; not verified - likely no general exemption. Eligibility: unclear | unknown |
What solar costs in Michigan
A fair cash price is around $3.30 per watt before incentives. For the 3 kW system that fits a typical home, expect roughly $8,400 to $11,900; smaller systems cost more per watt.
How many homes have solar
- Homes with net-metered solar (2025)
- 26,849
- Share of homes
- 0.6%
- Residential solar capacity
- 192 MW
- Growth over the past year
- +10.0%
Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.
Electric utilities in Michigan
| Utility | Homes served | Price (2026 est.) | Typical use | Typical-home verdict |
|---|---|---|---|---|
| DTE Electric | 2,078,328 | 21.3¢ | 623 kWh/mo | Close call |
| Consumers Energy | 1,662,741 | 21.7¢ | 649 kWh/mo | Close call |
| Great Lakes Energy Cooperative | 123,277 | 21.3¢ | 632 kWh/mo | Close call |
| Indiana Michigan Power | 112,973 | 18.2¢ | 848 kWh/mo | Not worth it |
| City of Lansing | 87,026 | 20.4¢ | 537 kWh/mo | Not worth it |
| Upper Peninsula Power | 47,805 | 29.4¢ | 447 kWh/mo | Close call |
| Cloverland Electric Co-op | 36,144 | 15.0¢ | 705 kWh/mo | Not worth it |
| Cherryland Electric Cooperative | 35,548 | 18.2¢ | 706 kWh/mo | Not worth it |
| Upper Michigan Energy Resources | 33,339 | 18.4¢ | 578 kWh/mo | Not worth it |
| Presque Isle Electric & Gas Cooperative | 32,519 | 25.1¢ | 448 kWh/mo | Close call |
| Midwest Energy Cooperative | 29,359 | 20.4¢ | 973 kWh/mo | Close call |
| City of Holland | 27,007 | 12.0¢ | 613 kWh/mo | Not worth it |
| Tri-County Electric Cooperative (MI) | 23,136 | 19.3¢ | 830 kWh/mo | Close call |
| City of Bay City | 17,994 | 16.1¢ | 598 kWh/mo | Not worth it |
| City of Marquette | 15,202 | 17.6¢ | 527 kWh/mo | Not worth it |
| Alpena Power | 13,754 | 19.6¢ | 533 kWh/mo | Not worth it |
| City of Grand Haven | 13,290 | 15.9¢ | 581 kWh/mo | Not worth it |
| Wyandotte Municipal Serv Comm | 11,746 | 17.8¢ | 556 kWh/mo | Not worth it |
| City of Traverse City | 10,097 | 14.1¢ | 525 kWh/mo | Not worth it |
| Alger-Delta Cooperative Electric Association | 9,837 | 24.4¢ | 465 kWh/mo | Close call |
| Northern States Power | 7,567 | 16.1¢ | 722 kWh/mo | Close call |
| Coldwater Board of Public Util | 6,420 | 16.4¢ | 597 kWh/mo | Not worth it |
| City of Sturgis | 6,112 | 16.9¢ | 674 kWh/mo | Not worth it |
| City of Zeeland | 6,058 | 10.5¢ | 686 kWh/mo | Not worth it |
Solar by city in Michigan
- Detroit15.9-yr payback · Close call
- Grand Rapids15.7-yr payback · Close call
- Warren15.8-yr payback · Close call
- Sterling Heights15.9-yr payback · Close call
- Ann Arbor15.9-yr payback · Close call
- Lansing17.4-yr payback · Not worth it
- Dearborn15.8-yr payback · Close call
- Livonia15.9-yr payback · Close call
- Troy15.8-yr payback · Close call
- Westland15.8-yr payback · Close call
- Farmington Hills15.8-yr payback · Close call
- Flint15.7-yr payback · Close call
- Wyoming15.6-yr payback · Close call
- Rochester Hills15.9-yr payback · Close call
- Southfield15.9-yr payback · Close call
- Kalamazoo15.5-yr payback · Close call
- Novi15.8-yr payback · Close call
- Pontiac15.8-yr payback · Close call
- Taylor15.9-yr payback · Close call
- Dearborn Heights15.9-yr payback · Close call
- St. Clair Shores16.1-yr payback · Close call
- Royal Oak15.8-yr payback · Close call
- Kentwood15.8-yr payback · Close call
- Battle Creek15.5-yr payback · Close call
- Portage15.6-yr payback · Close call
- Roseville15.8-yr payback · Close call
- East Lansing17.3-yr payback · Not worth it
- Saginaw15.5-yr payback · Close call
- Midland15.6-yr payback · Close call
- Lincoln Park15.9-yr payback · Close call
- Muskegon15.5-yr payback · Close call
- Holland15.6-yr payback · Close call
- Eastpointe15.9-yr payback · Close call
- Bay City20.1-yr payback · Not worth it
- Jackson15.5-yr payback · Close call
- Burton15.5-yr payback · Close call
- Southgate15.7-yr payback · Close call
- Oak Park15.8-yr payback · Close call
- Forest Hills15.8-yr payback · Close call
- Port Huron16-yr payback · Close call
- Madison Heights15.9-yr payback · Close call
- Allen Park15.8-yr payback · Close call
- Hamtramck15.8-yr payback · Close call
- Garden City15.8-yr payback · Close call
- Allendale15.7-yr payback · Close call
- Okemos15.5-yr payback · Close call
- Inkster15.8-yr payback · Close call
- Walker15.6-yr payback · Close call
- Holt15.6-yr payback · Close call
- Auburn Hills15.8-yr payback · Close call
- Norton Shores15.7-yr payback · Close call
Protect yourself when buying
- Check the license. LARA residential builder or maintenance & alteration contractor license plus electrical contractor license (Bureau of Construction Codes). Look up an installer
- Cancellation rights. Federal law gives you 3 business days to cancel most door-to-door sales over $25. How to cancel
- HOA and solar access. No comprehensive statewide HOA solar protection identified; verify.
- Community solar. No statewide program (bills pending); utility programs (DTE MIGreenPower, Consumers Solar Gardens).
Questions about solar in Michigan
Is solar worth it in Michigan in 2026?
For a typical Michigan home, solar is a close call. A 3 kW system costing about $11,900 after state incentives saves about $684 in the first year and pays back in about 16 years. Your result depends on your roof, usage, utility and price, so run the calculator for your address.
How much do solar panels cost in Michigan?
A reasonable cash price is around $3.30 per watt before incentives, or roughly $8,400 to $11,900 for a 3 kW system.
Does Michigan have net metering?
Michigan's IOUs use a 'distributed generation' inflow/outflow tariff: you save the full retail rate on solar you use directly, but power sent to the grid is credited only at roughly the power-supply portion of the rate (about 8-15 cents depending on rate/time).
Is there a solar tax credit in Michigan?
The 30% federal credit for homeowners ended for systems installed after 2025. Michigan does not offer a state income tax credit for solar that we're aware of. Solar may be exempt from property tax.
How do I check a solar installer's license in Michigan?
LARA residential builder or maintenance & alteration contractor license plus electrical contractor license (Bureau of Construction Codes).. Look up any installer with the state's license search at https://aca-prod.accela.com/MILARA/.
Policy research current as of October 2026; sources include michigan.gov, canarymedia.com, solarpowerworldonline.com. Electricity data: EIA, through July 2026. Found something out of date? Tell us.