Solar in Michigan: market, incentives and distributed generation reality
Ranked 12th in the US for installed solar capacity.
Michigan is the twelfth-largest US solar market with over 4,500 MW installed. The state replaced retail net metering with the Distributed Generation (DG) tariff in 2018: solar exports are credited at the utility's power-supply rate rather than retail, which has made system sizing precision important and shifted the economics compared to retail-NEM states.
Market snapshot
Solar in Michigan by the numbers
- Installed capacity
- 4,500 MW
- Homes powered
- 550K
- Solar share of electricity
- 4%
- Solar jobs in state
- 4,800
- Typical cost per watt
- $2.80
- US ranking
- #12
Michigan's solar market is dominated by utility-scale and community solar; residential growth has been slower than peer states partly because the Distributed Generation tariff makes retail-rate export math worse than in full-NEM states. Growth has still been positive, concentrated in the Detroit, Grand Rapids and Ann Arbor metros.
Rates and net metering
Electric rates and how solar export is credited
Net metering status
Partial net metering
Michigan's Distributed Generation (DG) tariff, in effect since 2018, replaced retail net metering. Residential solar exports are credited at the utility's power-supply rate (typically $0.03 to $0.05 per kWh), which is lower than the retail rate for consumption. Grandfathered customers on the pre-2018 net-metering programme kept their original rates.
Average residential rate
$0.17/kWh
Michigan residential rates average around $0.17 per kWh. DTE Energy and Consumers Energy both use tiered rates that increase with usage. Time-of-use rates are optional. Michigan rates have risen roughly 25 percent since 2020.
Major utilities
DTE Energy, Consumers Energy, Various municipal utilities and co-ops.
Incentives
State and local solar incentives in Michigan
Beyond the 30 percent federal Residential Clean Energy Credit, which applies in every US state through 2032, Michigan has these state and local programmes.
- Property-tax exemption
- Michigan exempts the added value of a residential solar system from property-tax assessment under MCL 211.9. Automatic; no application required.
- No state income tax credit
- Michigan does not currently have a state income-tax credit for residential solar. The main tax-based incentive is the 30 percent federal Residential Clean Energy Credit.
- DTE Energy MIGreenPower
- DTE Energy's green-power programme lets residential customers subscribe to renewable energy for a monthly premium, not a solar installation but often cited as an alternative for customers whose homes do not suit rooftop solar.
- Low-income solar programmes
- Michigan Saves and several utility partnerships offer financing and installation support for low-income households, with eligibility set annually. Scope varies year to year.
Permits and interconnection
Permits and interconnection
Permit timelines in Michigan vary by municipality. Detroit and Oakland County typically 3 to 5 weeks for residential; smaller jurisdictions can be faster or slower depending on inspector availability. SolarAPP+ adoption is limited. Interconnection with DTE Energy and Consumers Energy typically runs 4 to 8 weeks post-install, longer than most states.
Running a solar company here
Running a solar company in Michigan
Running a solar company in Michigan means operating in a market where the Distributed Generation tariff makes system sizing precision important: a system sized too large exports excess at the low power-supply rate rather than retail, which hurts payback. Installers who have grown in Michigan tend to size systems closer to self-consumption rather than targeting 100-plus percent offset, and to pair solar with battery storage more often than peer states. Lead costs on Google Search are moderate ($110 to $170 range for residential).
Questions people ask
Solar in Michigan: FAQ
- Does Michigan have net metering?
- Not in the retail-rate sense since 2018. Michigan's Distributed Generation (DG) tariff credits solar exports at the utility's power-supply rate (typically $0.03 to $0.05 per kWh) rather than the retail rate. This makes self-consumption more valuable than export and shifts the system-sizing calculus compared to full-NEM states.
- How much does solar cost in Michigan?
- Residential solar in Michigan averages around $2.80 per watt installed, meaning a typical 7 kW system costs about $19,500 gross. After the 30 percent federal tax credit, net cost is around $13,700. Costs are competitive with other Midwest states; higher than Sun Belt leaders due to winter installation challenges and permit variability.
- Is solar worth it in Michigan?
- Yes for most Michigan homes with suitable roofs, but with longer payback than full-NEM states: 10 to 14 years for most residential installations with the federal tax credit. Pairing solar with battery storage, sized to maximise self-consumption, shortens payback meaningfully under the DG tariff.
- Does Michigan have a state solar tax credit?
- No. Michigan does not currently have a state income-tax credit for residential solar. The main state-level benefit is the property-tax exemption. The 30 percent federal Residential Clean Energy Credit still applies.
For Michigan solar installers
Running a solar company in Michigan?
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