Michigan Solar Incentives, Cost & Payback (2026)
Written by Aditya Patil · Last updated 2026-09-24
Going solar in Michigan has changed in recent years. With true net metering retired in favor of the Distributed Generation tariff, homeowners need to carefully consider how their utility credits excess power to get the best return on investment.
$151
Avg. monthly bill
22.99¢/kWh
Avg. rate
+13.6%
Rate YoY change
See Calculator
Est. payback
typical household
Cost of solar in Michigan
We are currently updating our database with the latest installed cost figures for Michigan. While exact state-level averages are being refreshed, national trends suggest falling equipment prices. Because your unique roof profile and energy usage determine the system size, we recommend using our solar calculator to get an estimate tailored to your home.
Distributed Generation (Net Metering) Rules
Michigan retired traditional 1-to-1 net metering for the state's largest utilities (DTE Electric and Consumers Energy). New solar customers are placed on a Distributed Generation (DG) tariff overseen by the Michigan Public Service Commission (MPSC). Under this system, inflow and outflow are metered separately.
When your panels produce more electricity than your home is using, that excess (outflow) is sent back to the grid and credited at a reduced rate—specifically, the power-supply component of the retail rate minus distribution costs. Consequently, maximizing self-consumption (using the power as it is generated, or storing it in a battery) yields a significantly higher financial return than exporting it to the grid.
| Policy | Distributed Generation (DG) Tariff |
| Outflow value | Power-supply portion of retail rate (plus PSCR factor) |
| DTE outflow credit | ~8.8¢ - 10.1¢/kWh (residential) |
| Consumers outflow credit | ~8.3¢/kWh (winter) to 15¢/kWh (summer on-peak) |
| Program cap | 10% of utility average in-state peak load (prior 5 years) |
Outflow credit rates are utility- and rate-schedule-specific, change with each MPSC rate case, and are well below the full retail rate. Effective March 5, 2026 (MPSC Case No. U-21860), DTE Electric's standard residential (Rate D1) outflow credit is $0.08782/kWh for the first 17 kWh/day and $0.10081/kWh for excess, with different values for time-of-use and EV rate plans. Effective May 1, 2026 (MPSC Case No. U-21870), Consumers Energy's standard residential (Rate RSP) outflow credit is $0.082996/kWh (Oct-May), rising to roughly $0.10-$0.15/kWh on time-of-use summer on-peak plans; commercial/industrial outflow rates differ again by rate class and voltage level. These figures come directly from each utility's current MPSC-filed tariff sheets, not a single statewide number.
Michigan Solar Incentives & Financing
Michigan does not offer a direct state rebate for residential solar, but there are strong property tax protections and state-sponsored financing options to help lower the barrier to entry.
| Program | Amount / Benefit | Status |
|---|---|---|
| Michigan Saves Home Energy Loan Program | Fixed-rate loans from about $1,000 to $100,000 (varies by lender), roughly 5.99%-6.99% APR depending on creditworthiness, terms up to 15 years (180 months), with no early-repayment penalty. | open |
| Lean & Green Michigan PACE Financing | Long-term, fixed-rate Property Assessed Clean Energy (PACE) financing for renewable energy and efficiency projects, repaid through a voluntary special assessment on the property tax bill; loan size and term are set per project (statewide totals cited by the administrator: 93+ projects and over $332 million financed). | open |
| Alternative Energy System Property Tax Non-Consideration (Mathieu Gast Act, 2019 PA 116 & 117) | A qualifying alternative energy system (solar PV, solar-thermal, wind, or battery storage up to 150 kW, sized so annual output does not exceed the home's annual usage) is not counted by the local assessor as an increase in the home's taxable value. This protection lasts until the property is sold; after a sale, the assessor may then factor in the system's value. | open |
| Alternative Energy Personal Property Tax Exemption (2019 PA 118, MCL 211.9i) | Full exemption from personal property tax collection for a qualifying alternative energy system (up to 150 kW) used to offset the owner's own commercial or industrial energy use. For systems installed after November 15, 2019, the exemption also requires the system's true cash value, combined with other MCL 211.9o-exempt personal property, to stay under $80,000. | open |
Top utilities in Michigan
| Utility | Residential rate | Customers |
|---|---|---|
| DTE Electric Company | 20.13¢/kWh | 2,067,758 |
| Consumers Energy Co - (MI) | 19.11¢/kWh | 1,657,843 |
| Great Lakes Energy Coop | 19.17¢/kWh | 120,645 |
Residential rate and customer counts are from EIA-861.
Estimate your own numbers
Ready to see how these policies impact your specific home? Use the solar calculator with your own usage data to build a custom estimate.
FAQ
Does Michigan still have true net metering?
No. Michigan replaced true net metering with a Distributed Generation (DG) tariff for its major investor-owned utilities, DTE Electric and Consumers Energy. Under this program, the power you pull from the grid is billed at the full retail rate, but the excess solar power you send back to the grid is credited at a lower "power supply" rate. This means you do not receive a one-to-one credit for the power you export.
Are there state tax credits for solar in Michigan?
Michigan does not offer a statewide income tax credit or rebate for residential solar. However, under the Mathieu Gast Act, the added value of a solar energy system is excluded from your property tax assessment, meaning installing solar will not increase your property taxes until the home is sold. There is also a Michigan Saves loan program that provides accessible financing for energy upgrades.
How much are electricity rates increasing in Michigan?
Michigan electricity rates have been rising significantly. Over the past year alone, average rates increased by over 13% to 22.99¢/kWh. As utility bills climb, the savings potential from generating your own solar power becomes stronger, even with the reduced export credits under the DG tariff.
Data sources
Last updated 2026-09-24
- U.S. Energy Information Administration — Electricity Data Browser — accessed 2026-09-24
- NREL PVWatts — accessed 2026-09-24
- NREL Solar Resource Data — accessed 2026-09-24
- LBNL Tracking the Sun (public data file, host-owned residential systems) — accessed 2026-09-24
Written by Aditya Patil