Trystan Casey
Solar power is becoming an increasingly popular source of energy in Michigan, with the state adopting a renewable portfolio standard in 2008, requiring 10% of its electricity to come from renewable resources by 2015. Distributed solar is not yet widely used, but customer participation is increasing, with a 53% increase in capacity in 2019. Utility companies in Michigan offer solar buyback programs through the Distributed Generation Program, allowing customers to sell excess solar energy back to the grid. The cost of solar panel installation in Michigan ranges from $16,022 to $21,678 on average, but this can be reduced by thousands of dollars through incentives and rebates.
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What You'll Learn
- Solar power in Michigan is increasing, with a 53% capacity increase in 2019
- The largest solar farm in Michigan is Assembly Solar, with a capacity of 347 MW
- Utility companies in Michigan offer solar buyback programs through the Distributed Generation Program
- Solar installations in Michigan can be costly, ranging from $16,022 to $21,678
- Solar incentives and rebates can reduce the cost of installing solar in Michigan
Solar power in Michigan is increasing, with a 53% capacity increase in 2019
Solar power in Michigan is on the rise, with a notable 53% increase in capacity in 2019. This growth is driven by various factors, including government initiatives, customer demand, and the emergence of community solar projects.
The Michigan government has actively promoted solar energy adoption through legislative measures. In 2018, a bill was passed to exempt solar installations from property tax assessment, making it more financially attractive for residents to invest in solar power. Additionally, the state's net metering program, introduced in 2008, allowed customers with on-site electrical generation to roll over excess energy to the next month, providing further economic incentives for solar adoption.
The increase in solar capacity is also fuelled by a growing number of customer installations. Despite distributed solar not being widely used in Michigan, with only about 8,331 to 14,446 installations, customer participation is rapidly increasing. This trend is supported by the availability of financing options, such as loans, making solar power more accessible to those who cannot afford the upfront investment.
Community solar projects have also played a significant role in Michigan's solar expansion. Several proposals for community solar farms were introduced in 2015, and by 2019, a 1 MW community solar project at Western Michigan University was completed. The state is exploring additional avenues to expand solar access, such as community solar programs, which would enable third-party solar developers to sell or lease solar power to individuals who cannot install their own systems.
The state's major utility companies, DTE and Consumers Energy, have also contributed significantly to the increase in solar capacity. In 2019, DTE reported 152 customers with batteries, totalling 760 kW of storage capacity. Furthermore, these companies have been involved in large-scale solar projects, such as the Assembly Solar Project, which added 110 MW of capacity in December 2021.
Michigan's progress in solar power is evident, and the state is on a positive trajectory towards embracing renewable energy sources. The combination of government initiatives, customer demand, and the growing accessibility of solar power is driving this transition, positioning Michigan to further develop its solar energy capabilities in the coming years.
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The largest solar farm in Michigan is Assembly Solar, with a capacity of 347 MW
Michigan has various incentives to encourage solar energy use within the state. For example, the federal solar tax credit can help Michiganders reduce the cost of solar by thousands of dollars. Utility companies in Michigan also offer solar buyback programs through the Distributed Generation Program, although the catch is that they only offer partial credit for every kWh. This means that you are selling electricity to them at a significant discount compared to what they will charge you to buy it back.
In 2015, Consumers Power built a 3 MW solar farm at Grand Valley State University, which became the largest solar farm in Michigan at the time. However, as of 2020, the largest solar farm in Michigan is Assembly Solar, with a capacity of 347 MW. The first 50 MW phase of Assembly Solar Farm was brought online in December 2020.
Michigan's transition to clean energy is well underway, with Governor Whitmer signing bills in November 2023 to transition the state to clean energy by 2040. The state also has the authority to override local decisions to allow farmers and property owners to house wind and solar projects on their land.
The state currently ranks 27th in the US in terms of solar capacity, and the energy storage market in Michigan is prime for exponential growth. Regulators and utilities are working to accelerate the procurement of storage systems, expand funding, and reduce market barriers for homeowners and businesses.
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Utility companies in Michigan offer solar buyback programs through the Distributed Generation Program
In 2008, the Michigan Public Service Commission (MPSC) created a net metering program that applied to all utilities in the state. This program was very successful, with solar installations in Michigan increasing from less than 100 to over 5,000 between 2008 and 2018. However, in 2016, new laws were enacted requiring the MPSC to phase out the net metering program and create a new Distributed Generation Program. This program is based on the inflow/outflow billing mechanism, which measures and prices a customer's incoming and outgoing electricity flows separately.
The Distributed Generation Program is not as financially beneficial as net metering, but it still offers savings for those who own solar panels in Michigan. Under this program, solar panel owners get credit for all excess energy their systems send to the grid during the day. This is essentially a solar buyback program, where utility companies in Michigan offer partial credit for every kWh of electricity generated by the customer's solar panels.
To participate in the Distributed Generation Program, customers must install on-site, grid-connected, renewable generation with a capacity of no more than 550 kW. This project may generate up to 110% of a customer's annual electricity consumption. Prior to operating a distributed generation project, customers must properly interconnect the project with the utility, and ensure they have an eligible renewable energy system.
It is important to note that the utility companies are buying back the electricity at a significant discount compared to the retail price of electricity. This means that while solar panel owners in Michigan can still save money and reduce their carbon footprint by participating in the Distributed Generation Program, they are selling their excess electricity back to the utility companies at a lower price than they will pay to buy electricity from the grid.
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Solar installations in Michigan can be costly, ranging from $16,022 to $21,678
Solar installations in Michigan can be expensive, with the average cost of solar panels per watt being $3.34 per watt as of 2025. This means that a typical 7.2 kilowatt (kW) solar system will cost $16,834 after claiming the 30% federal solar tax credit. The cost of solar installations in Michigan can range from $13,307 to $18,003 for a 5 kW system, with an average cost of $15,655. The price per watt for solar panels in Michigan is higher than in most states, but residents generally need a much smaller system, which helps to keep the overall cost relatively low.
The cost of solar energy includes more than just the equipment and installation—it also includes permitting costs, inspection costs, and installer profit margins. These factors can cause the price of solar to fluctuate between installations. Homes that use more electricity will need more solar panels to cover their energy needs, and while solar panels get cheaper on a per-watt basis, the overall cost of the system will increase as more panels are added. However, the higher a home's energy usage, the more solar panels can save on energy bills.
There are ways to bring down the cost of solar in Michigan. Taking advantage of incentives and rebates and shopping around for quotes can reduce the cost of solar. The federal solar tax credit in Michigan allows you to apply 30% of your solar installation and equipment costs toward your federal tax bill. If the amount exceeds your tax bill, you can roll over the remaining credit to the following year. Utility companies in Michigan also offer solar buyback programs through the Distributed Generation Program, where you can earn bill credits when your solar panel system generates excess electricity and sends it to the grid. However, utility companies only offer partial credit for every kWh, so you are selling the electricity to them at a significant discount compared to what they will charge you to buy it back.
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Solar incentives and rebates can reduce the cost of installing solar in Michigan
Solar panels are worth it in most areas, including Michigan. Incentives and rebates can help to bring down the price tag of solar panels considerably. The average Michigan solar shopper can save $4,699 on solar panels with rebates and incentives.
The federal solar tax credit, for example, offers Michigan residents a 30% tax credit through 2032 when they purchase solar panels. This credit is available to all solar customers without any eligibility requirements. The only downside is that it affects your tax burden rather than acting as a solar rebate. That means you can’t take advantage of the perk if you don’t owe money on your taxes.
Another incentive is net metering, which allows residents to obtain credit for any excess renewable energy that their solar panels generate. This incentive is known as a solar buyback program, and it can reduce your electric bills to almost nothing. However, utility companies only offer partial credit for every kWh, so you're selling the electricity to them at a significant discount compared to what they'll charge you to buy it back later. As of 2022, only Upper Michigan Energy Resources Corporation, Cloverland Electric Coop, Alpena Power Company, Ontonagon County REA, and Xcel Energy continue to offer net metering.
The Lansing Board of Water & Light (LBWL) offers residential energy efficiency rebates of up to $500 per kW installed, up to $2,000 total. Lean and Green Michigan's Property Assessed Clean Energy (PACE) program is another financing opportunity that can help owners of commercial, industrial, multifamily housing, agricultural, and nonprofit properties reduce energy costs and install a solar system with no upfront costs.
The cost of solar panels in Michigan is a bit higher than the national average, but residents' relatively low energy needs mean that most customers can get away with a 7 kW system, which is much smaller than the US average of 9 kW.
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Frequently asked questions
Solar panels in Michigan can reduce your carbon footprint and your reliance on the utility electric grid. Additionally, with the federal solar tax credit, you can cut the cost of solar by thousands of dollars, speeding up your payback period and increasing the value of your investment.
First, you need to choose a contractor/installer who will work with you to develop and plan your solar array based on your electric needs and cost specifications. Then, the contractor/installer will do the physical work of planning and mounting your solar array.
One incentive is net metering, where you earn bill credits from your utility company when your solar panel system generates excess electricity and sends it to the grid. This is a solar buyback program where you will owe very little or nothing on your electric bills. Another incentive is the renewable portfolio standard (RPS) that was adopted in 2008, which requires that a certain percentage of Michigan's electricity come from renewable resources.
