Michigan Solar Calculator
Estimate your solar savings in Michigan under the 2023 Distributed Generation Program. Get personalized payback period, 25-year savings, and system size recommendations.
DISCLAIMER: All estimates are approximations based on regional averages. Actual savings vary by location, roof orientation, utility provider, and installer. This calculator does not guarantee specific savings.
Electricity rates last updated: August 2026 (source: EIA)
Michigan Solar Calculator 2026
Michigan overhauled its solar compensation rules with Public Act 235 (2023), replacing old net metering with a new Distributed Generation (DG) Program. For most homeowners — anyone with a system 20 kW or smaller — the practical result is familiar: excess solar generation earns full retail-rate credits that carry forward month to month. Add active sales tax and property tax exemptions, and Michigan's solar economics hold up reasonably well in 2026, even without the now-expired federal tax credit.
Estimate Your Solar Savings
Find out how much you can save based on your location and current energy usage.
Michigan's Distributed Generation Program (PA 235, 2023)
Michigan's DG Program replaced traditional net metering under Public Act 235, which took effect in 2023. The key rules for residential homeowners:
- •Systems 20 kW or smaller (virtually all residential rooftop installations): excess generation credited at the full retail electricity rate, with unused credits carrying forward to your next billing period. This is functionally equivalent to traditional 1:1 net metering.
- •Systems 20 kW–550 kW (the project cap was raised to 550 kW in 2025): credits paid at a lower avoided-cost rate rather than retail. This affects larger commercial installations, not typical home systems.
- •Legacy grandfathering: customers enrolled in the old net metering program before PA 235 took effect are grandfathered onto their prior terms for 10 years from their enrollment date.
- •Enrollment cap expanded: the old program limited participation to 1% of each utility's peak load. PA 235 raised this to 10% — a real access improvement that ensures far more Michigan homeowners can participate before any enrollment limits apply.
Michigan Utility Landscape
DTE Energy
Serves southeast Michigan including the Detroit metro area, Oakland County, Macomb County, and surrounding regions. Residential electricity rates approximately 21.2 cents/kWh as of 2026 (approximate — confirm your current rate on your bill or at dteenergy.com). Subject to Michigan DG program rules; systems under 20 kW receive full retail-rate credits.
Consumers Energy
Serves much of the Lower Peninsula outside DTE's territory — a large footprint covering mid-Michigan and many rural communities. Residential rates approximately 23 cents/kWh as of 2026 (approximate — confirm current rate with Consumers or on your bill). Also subject to Michigan DG program rules; same 20 kW retail credit threshold applies.
Municipal Utilities and Co-ops
Lansing Board of Water & Light, Traverse City Light & Power, and rural electric cooperatives serve other areas of the state. These utilities may have DG program terms that differ from DTE and Consumers. If you are not a DTE or Consumers customer, confirm your utility's interconnection process, credit rates, and any system size limits directly with your provider before installation.
Michigan State Incentives (Active in 2026)
Sales Tax Exemption — 6%
Michigan exempts solar energy equipment from the state's 6% sales tax at the time of purchase. Covered components include solar panels, inverters, racking, mounting hardware, and battery storage components. The exemption applies at point of sale — no separate application required. On a typical $25,000–$35,000 system, this saves $1,500–$2,100 directly off your purchase price.
Property Tax Exemption — Systems Under 150 kW
Michigan's Residential Property Tax Exemption prevents any increase in your property tax assessment due to a solar installation for systems under 150 kW. Even if solar adds real market value to your home, that added value is excluded from your taxable assessment. This exemption applies automatically statewide — no separate filing required. It was reinstated in 2019 and remains active. You capture the home-value benefit without paying higher property taxes for it.
No State Income Tax Credit
Michigan does not offer a state income tax credit for residential solar. State-level financial incentives are limited to the sales tax and property tax exemptions above.
Federal Residential Solar Tax Credit (Section 25D)
This credit expired December 31, 2025 and is not available for systems installed in 2026 or later.
The 30% Residential Clean Energy Credit (Section 25D) applied to solar and battery storage systems placed in service through December 31, 2025. Systems installed in 2026 or later do not qualify. Many online calculators and contractor quotes still include this credit — be sure any estimate you receive reflects current law. The commercial Investment Tax Credit (ITC, Section 48) has different rules and may still apply to certain business or commercial installations.
Michigan Electricity Rates and Solar Resource
Michigan's residential electricity rates are notably high for the Midwest — roughly 21 to 23 cents/kWh as of 2026, approximately 17% above the national average. DTE Energy customers pay approximately 21.2 cents/kWh; Consumers Energy customers approximately 23 cents/kWh. These are approximate figures that change with utility rate cases — confirm your exact rate on your bill or with your utility. Higher rates directly strengthen solar payback: every kWh your system offsets saves you the full retail rate under the DG program's 1:1 credit.
Michigan averages roughly 4 peak sun hours per day on an annual basis — on the lower end nationally, primarily due to Great Lakes cloud cover, especially in winter. Production is notably seasonal: summer months generate significantly more than winter months. Despite this, solar remains economically viable given Michigan's above-average utility rates and solid net metering equivalent under the DG program. Treat 4 hours/day as an approximate regional figure; actual production depends on your roof's orientation, pitch, shading, and local microclimate.
Frequently Asked Questions
Everything you need to know about solar incentives, costs, and savings.