Is Solar Worth It in Michigan in 2026?
Michigan is not the Sun Belt, but it isn't a bad solar state either. A Detroit-area roof produces roughly 1,227 kWh per installed kilowatt per year — less than Florida or Arizona, but enough to matter, especially since Michigan electricity has gotten expensive: residents pay about 20¢ per kWh in 2025, up 138 percent since 2005. A high, climbing rate makes every kWh your roof makes worth more than the same panel would earn somewhere cheaper.
But 2026 changed the deal for everyone. The 30 percent federal tax credit that used to make solar math easy ended for systems completed after December 31, 2025. And Michigan was never generous on its own — no state tax credit, no cash rebate, and no true net metering anymore. New solar customers get paid a reduced rate for exported power, not the full retail rate. That doesn't make solar a bad idea here; it means the honest answer depends heavily on how much of your own solar you actually use versus sell back, and this page runs the real numbers instead of a sales pitch.
Michigan Electricity Prices Keep Climbing
Solar is a bet against future electricity prices, so the first question is where Michigan rates are headed. Here's the last few decades, from federal EIA data.
Full Michigan electricity price data (1990–2025)
| Year | Michigan (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 7.8 | 7.8 |
| 1991 | 8.1 | 8.0 |
| 1992 | 8.1 | 8.2 |
| 1993 | 8.2 | 8.3 |
| 1994 | 8.3 | 8.4 |
| 1995 | 8.3 | 8.4 |
| 1996 | 8.5 | 8.4 |
| 1997 | 8.6 | 8.4 |
| 1998 | 8.7 | 8.3 |
| 1999 | 8.7 | 8.2 |
| 2000 | 8.5 | 8.2 |
| 2001 | 8.3 | 8.6 |
| 2002 | 8.3 | 8.4 |
| 2003 | 8.4 | 8.7 |
| 2004 | 8.3 | 9.0 |
| 2005 | 8.4 | 9.5 |
| 2006 | 9.8 | 10.4 |
| 2007 | 10.2 | 10.7 |
| 2008 | 10.8 | 11.3 |
| 2009 | 11.6 | 11.5 |
| 2010 | 12.5 | 11.5 |
| 2011 | 13.3 | 11.7 |
| 2012 | 14.1 | 11.9 |
| 2013 | 14.6 | 12.1 |
| 2014 | 14.5 | 12.5 |
| 2015 | 14.4 | 12.7 |
| 2016 | 15.2 | 12.6 |
| 2017 | 15.4 | 12.9 |
| 2018 | 15.5 | 12.9 |
| 2019 | 15.7 | 13.0 |
| 2020 | 16.3 | 13.2 |
| 2021 | 17.5 | 13.7 |
| 2022 | 17.9 | 15.0 |
| 2023 | 18.8 | 16.0 |
| 2024 | 19.3 | 16.5 |
| 2025 * | 20.0 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
Michigan residential electricity averaged about 20¢ per kWh in 2025 (EIA preliminary), up 138 percent since 2005 — and the pace over just the last decade has run about 3.3 percent a year, a steeper climb than plenty of sunnier states. A high, rising rate is exactly the environment that makes the electricity you generate yourself worth protecting — which is also why how Michigan pays you for excess power (see below) matters more here than in a cheaper-baseline state.
The Michigan Sun, Month by Month
Panels respond to how high the sun climbs and how long it stays up, not to air temperature. Michigan sits at about 42.9°N — noticeably farther north than Florida or Texas, so winter days are short and the sun stays low, while summer days stretch long. That swing shows up directly in monthly output.
Michigan monthly solar production data
| Month | kWh per installed kW |
|---|---|
| Jan | 65 |
| Feb | 76 |
| Mar | 116 |
| Apr | 121 |
| May | 129 |
| Jun | 124 |
| Jul | 131 |
| Aug | 128 |
| Sep | 112 |
| Oct | 97 |
| Nov | 76 |
| Dec | 54 |
| Year | 1227 |
Source: NREL PVWatts typical-year estimate (Detroit), per installed kW at latitude tilt.
The practical read: May through August is where a Michigan system earns its keep; December and January produce a fraction of that. Lake-effect cloud cover on the state's western side (Grand Rapids, Muskegon) trims output further than the Detroit-area number above. And because Michigan doesn't offer full-retail net metering anymore, a system sized to your winter usage floor — not your peak summer production — tends to pencil out better than "go big and sell the rest back."
What Solar Costs in Michigan in 2026
Most Michigan residential installs run about $2.85 to $3.50 per watt as of mid-2026, with most estimators clustering around $2.97 to $3.05/W (a few run as high as $3.34/W or as low as $2.45–$2.85/W, reflecting installer, equipment tier, and roof complexity).
| System Size | Typical 2026 Cost | Roughly Offsets | Fits |
|---|---|---|---|
| 5 kW | $14,250 to $17,500 | ~6,100 kWh/yr (~$102/mo at 20¢) | Smaller home, lower usage |
| 8 kW | $22,800 to $28,000 | ~9,800 kWh/yr (~$163/mo) | Average Michigan home |
| 12 kW | $34,200 to $42,000 | ~14,700 kWh/yr (~$245/mo) | Large home, electric heat or EV charging |
Michigan's average residential system runs closer to 11–12 kW, putting a typical gross install around $30,000 to $40,000 before incentives. Because the federal 25D credit is gone for installs completed after 2025-12-31, there's no 30 percent haircut off that price for a cash or loan purchase in 2026 — the number above is close to what you actually pay.
Estimate Your Michigan Payback
The calculator below starts from Michigan's average electricity rate and Detroit-area sun production. Enter your own monthly bill to see an estimated system size, payback period, and 25-year savings. Michigan rates have climbed roughly 3.3 percent a year over the last decade — a reasonable starting value for the inflation field, though you can drag it to test a faster or slower future.
Michigan Solar Incentives in 2026
Here's what's gone, and what's actually still available.
- Gone — the 30 percent federal credit: The federal Residential Clean Energy Credit (25D) was repealed under the One Big Beautiful Bill Act for installations completed after December 31, 2025. If a Michigan installer's quote still nets out a federal credit for a system you own, ask them to rerun it.
- No state tax credit, no state rebate: Michigan has never had a state-level solar tax credit or a statewide cash rebate program, and that hasn't changed for 2026.
- Michigan Saves financing: A nonprofit, state-authorized (not state-funded) green bank offering low-interest home energy loans, roughly $1,000 to $50,000 over terms up to about 15 years, usable for solar. It's financing, not a credit or rebate.
- No sales tax exemption for your rooftop system: Michigan's industrial-processing exemption (MCL 205.54t / 205.94o) covers solar equipment only when the electricity is consumed in an industrial process or sold at retail — not a homeowner's own household power. Some marketing sites claim otherwise; that doesn't match Treasury's actual guidance. Budget for Michigan's 6 percent sales tax on your equipment.
- No property tax shield either: MCL 211.7h offered a property tax exemption certificate for solar, but closed to new applicants after 1983. The newer Solar Energy Facilities Taxation Act (2023 PA 108) only covers utility-scale facilities of 2 MW or larger — nowhere near a 5–15 kW rooftop system. Your assessment can legally rise with no statutory shield, despite a few SEO articles claiming a "150 kW residential exemption."
- Local utility rebates, sometimes: A few municipal utilities offer small rebates historically — Lansing BWL has offered up to roughly $2,000 per system in past years. These change year to year, so ask your installer what your utility currently offers.
How Net Metering Works in Michigan (It Isn't What You Think)
This is the part most out-of-state solar advice gets wrong. Traditional net metering — where excess solar simply rolls back your meter at the full retail rate — is closed to new residential customers. It was phased out under the Michigan Public Service Commission's Distributed Generation (DG) Program, implemented through MPSC Case No. U-18383 and later orders following Public Act 342 of 2016. Legacy net-metering customers were grandfathered for 10 years from enrollment; everyone installing today goes into the DG program instead.
Under DG, the power you draw (inflow) and the power you send back (outflow) are metered and priced separately, not simply netted. Outflow credit rates are set utility-by-utility in MPSC-approved tariffs, and run meaningfully below full retail:
- DTE Energy: roughly $0.078–$0.14 per kWh exported
- Consumers Energy: roughly $0.09–$0.16 per kWh
- Lansing BWL: roughly $0.06–$0.10 per kWh
Compare that to Michigan's roughly 17–20¢ retail rate, and exported solar is worth about 40 to 60 percent of what you'd pay to buy that kWh back — better than pure avoided cost, but a real haircut versus full retail net metering. The DG program is also capped at 10 percent of each utility's average in-state peak load (raised from 1 percent after 2023 legislation); DTE and Consumers have both pushed near that limit and are expanding as the cap phases in, so confirm your utility's current enrollment status.
The upshot: in Michigan, self-consumption beats export. A system sized to your baseline usage, paired with smart appliance timing (or a battery, if the math supports one), generally beats a bigger system built to sell the surplus back.
Michigan HOAs Can No Longer Just Say No
One genuinely new piece of good news: the Homeowners' Energy Policy Act (2024 PA 68), effective April 1, 2025, bars homeowners associations from outright banning solar panels. HOAs must adopt a written solar review policy with limited, specific denial reasons — they can't just refuse on aesthetic grounds anymore. That matters in a state with heavy subdivision and HOA density across metro Detroit and west Michigan suburbs, where a blanket "no panels" rule used to be a common dealbreaker before a homeowner ever got a quote.
How to Go Solar in Michigan
- Pull your last 12 electric bills and find your true average — Michigan's heating-driven winter bills and AC-driven summer bills swing more than a single month suggests.
- Confirm your roof faces south, east, or west with minimal shading, and has at least 10–15 years of life left.
- Ask each installer to show inflow/outflow numbers for your specific utility (DTE, Consumers, or your municipal provider), not a generic net-metering promise.
- Check your HOA's written solar review policy under the 2024 Homeowners' Energy Policy Act before you sign anything.
- Get at least three quotes, and confirm none of them bake in a phantom 30 percent federal credit for a system you own.
- Compare a Michigan Saves loan against the installer's in-house financing; low-interest green-bank loans are often cheaper.
For how panels work, sizing, and buying versus leasing in general, read our main solar panels guide. If your roof needs attention before or after an install, see our roofing guide, and for how a system interacts with your home's wiring and panel capacity, see our electrical guide.
Sources
Figures on this page are 2026-current. Rates: US EIA, Electric Sales, Revenue, and Average Price (2025 values preliminary). Production estimates: NREL PVWatts. Net metering / Distributed Generation Program: Michigan Public Service Commission and DSIRE — Michigan Net Metering. Property tax statutes: MCL 211.7h and the Solar Energy Facilities Taxation Act, 2023 PA 108. HOA policy: Homeowners' Energy Policy Act, 2024 PA 68. We review these figures every six months.