Here's what you need to know about solar costs, installers and the payback period in the Great Lakes State.
Michigan winters are chilly, but sunlight still makes a generous showing there for over half the year. Michigan's solar energy generation lags behind that of other states, but keeps making gains, like when the largest solar farm in Michigan, Assembly Solar, went live in 2022. From the Motor City to Muskegon, residents of the Upper and Lower Peninsula are using solar panels on their homes to create energy and lower their electricity costs.
The average electricity rate in Michigan also rose modestly in the last year. According to SaveOnEnergy, CNET's sister publication, the average Michigan electric bill in October 2022 was over $121, making it the 15th highest nationwide.
Here's a look at the average cash price for a 5-kilowatt system before factoring in tax credits incentives, according to data from FindEnergy.com.
|System size (kW)||Price per watt||Total cost|
Paying for solar panels in Michigan is typically done via cash, solar loans, solar leases or power purchase agreements. Cash is the only interest-free way to pay for solar panels, but requires a large amount of upfront capital. A solar loan is an alternative way to buy a solar array and qualify for tax incentives, but you will have to pay interest. You could also consider taking out a personal loan through your bank or opening a home equity line of credit. Solar leases and power purchase agreements will typically save less money over their lifetime than the above options and you won't qualify for tax incentives, but they're often more financially accessible than a purchase.
Advertiser Disclosure: SaveOnEnergy, owned by CNET's parent company Red Ventures, can help you find the right energy fit for your home. The SaveOnEnergy marketplace helps you search, compare, sign up and save on the right energy fit for your home -- all for free. If you're interested in solar, answer a few questions to get an exact price quote from our solar advisers.
The most substantial solar incentive in Michigan is the residential clean energy credit. This federal solar tax credit applies to solar panels purchased between 2022 and 2032, and allows you to claim 30% of the total cost of your system back in tax credits.
|Alternative Energy Property Tax Exemption||This bill excludes solar systems from property tax "as long as they offset all or a portion of the energy use on the property they are installed, and if the combined true cash value of all exempt property is below $80,000."|
|Distributed Generation Program||This Michigan program replaces net metering. Instead of a set rate for excess solar sent to the grid, the program measures incoming and outgoing electricity separately to create a more appropriate cost-of-service billing.|
|Lansing Board of Water & Light Solar Rebate||"BWL offers a solar PV rebate of $500 per installed kilowatt, up to $2,000." You can apply with the solar rebate application.|
|Michigan Saves Home Energy Loan Program||This loan program gives the "best rates and terms" for over 150 energy-related home improvements, including solar panels.|
|Residential Clean Energy Credit||A 30% federal tax credit for systems installed from 2022 to 2032. The credit decreases in 2033.|
According to the Solar Energy Industry Association, over 60 solar installers are available for Michigan residents. Below, we've called out five top solar installers operating in Michigan based on data from customer reviews and buying trends.
The Green Panel is one of the few solar companies with brick-and-mortar solar showrooms, with locations in Grand Rapids and Brighton. The Green Panel is an authorized retailer and installer of many leading solar products from Enphase, Panasonic, SolarEdge, Tesla and more. You can purchase your system outright or finance it through a loan. The product warranty will depend on the brand of components you pick for your system.
Michigan Solar Solutions is known for its "cash-back energy guarantee," which includes free system monitoring by Omnidian for three years. According to their brochure (PDF) "if your system generates less than 95% of forecasted energy, we pay you for annual energy loss even if you experienced a bout of bad weather." The company also has 4.9 out of 5 stars with GuildQuality, which surveys customers in the home building industry.
Palmetto operates in 24 states and is one of the largest solar installers nationwide. It installs solar panels from REC and QCells, Palmetto offers a personalized service experience from start to finish. Palmetto also offers a range of subscriptions to monitor your system after installation.
SunPower has been around for over three decades and operates in all 50 states. Although quotes tend to be on the higher end of the spectrum, SunPower's in-house products and services are some of the best in the industry. You can purchase or lease your system and enjoy a 25-year warranty.
Tiger Solar is a regional solar company that serves Idaho, Maryland, Michigan and Virginia. The company promises a "non-pushy" sales force and works with "non-profits and credit unions whose sole purpose is to connect you with green financing options."
Besides deciding on your budget, solar installer, purchase and financing method, consider these five aspects of your home when considering residential solar panels.
Own or rent. Homeowners are set up to get the best incentives and return on investment with solar panels. Renters who want to use renewable energy are better off looking into community solar programs, such as Arcadia.
Roof condition. If your roof needs repairs before solar panel installation, factor that expense into your budget. Make sure your installer advises you on how the size and slope of your roof will affect panel placement and performance.
Location. A roof oriented toward the sun with an unobstructed view will generate more electricity.
Neighborhood and HOA rules. Michigan does not have solar rights laws, which means home owner associations can ban solar panels. Check your neighborhood bylaws before proceeding with solar installation. Your installer may help you navigate this.
Homeowners insurance. Consult your home insurance company to ensure a solar system can be covered under your policy.
Solar panels in Michigan can be worth investing in if your energy costs are high and your home has the conditions for efficient solar performance. A reliable solar installer can provide you with an estimate of the cost and return on your investment for solar panels. Get three to four quotes from different solar companies to accurately estimate whether solar panels are worth it for your home.
Completely free solar panels are not an option in Michigan. However, several federal and state incentives exist that benefit homeowners and businesses when purchasing solar panel systems in the state.
Solar panels in Michigan cost about $24,815 for an average system size of 6 kW, according to Find Energy. The cost of solar panels in Michigan is slightly higher than the US national average.