Michigan Solar Incentives, Tax Credits and Rebates

Michigan solar incentives at a glance

The following table highlights available solar incentives in Michigan and who qualifies for these programs.

Michigan residential solar property tax exemption

Qualifying residential solar systems are generally exempt from additional property taxes in Michigan. This means installing solar may increase your home’s value without increasing its taxable value by the same amount.

The exemption generally applies to systems up to 150 kW that are designed to offset some or all of the energy used on the property. A typical residential installation is well below that limit.

Lansing Board of Water & Light solar rebate

Lansing Board of Water & Light customers may receive $500 per installed kilowatt of solar capacity, up to $2,000. A 4-kW or larger qualifying installation can therefore receive the maximum rebate.

Confirm that rebate funding is still available before signing an installation contract.

The system must use eligible panels and inverters, receive BWL permission to operate and meet the utility’s interconnection requirements. The rebate is offered for a limited time, while funds are available, and BWL may change or end it without notice.

Other Michigan solar policies

Public Act 235 expanded Michigan’s Distributed Generation Program by raising the statewide program cap from 1% to 10% of each utility’s average in-state peak load. It also allows qualifying systems to be sized to produce up to 110% of the customer’s electricity use during the previous 12 months.

How can I pay for solar panels?

You can pay cash, but most people finance solar panels. A solar loan works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest).

Leasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you generally won’t be eligible for state and utility ownership-based incentives, since those programs typically require you to own your system. You also might qualify for the Michigan Saves or PACE financing programs.

Michigan Saves financing

Michigan Saves connects homeowners with participating lenders that finance solar panels, battery storage and other eligible energy improvements. You generally must work with a Michigan Saves-authorized contractor.

As of July 2026, advertised starting rates range from approximately 5.99% to 7%, depending on the lender. Available loan amounts range from $1,000 to $100,000, and some lenders offer terms up to 15 years. Your actual rate and loan limit depend on the lender, location and creditworthiness.

PACE financing for larger properties

Lean & Green Michigan offers PACE financing for qualifying commercial, industrial and multifamily properties. It is generally not an option for a typical owner-occupied, single-family home.

Eligible projects may receive long-term financing repaid through a property assessment. Because minimum property values, utility expenses and project costs apply, this program is most relevant to apartment buildings and other large properties.

Federal solar programs

The 30% Residential Clean Energy Credit is not available for systems placed in service after Dec. 31, 2025. However, a few federal provisions may still help some Michigan property owners.

• Unused credit carryforward: If you installed qualifying solar by the end of 2025 but could not use the full credit, you may be able to carry the unused amount into 2026.
• FHA solar and energy financing: Eligible homeowners may be able to include solar panels and other energy improvements in an FHA-insured mortgage or refinance.
• Utility subsidy tax treatment: Certain utility energy-conservation subsidies may be excluded from federal taxable income, although they can affect how qualifying project costs are calculated for tax purposes.

What to know about net metering in Michigan

Michigan has replaced traditional net metering for most new solar customers with a Distributed Generation Program. You can reduce your bill by using the electricity your panels generate, and your utility provides a credit for excess power sent to the grid. However, that export credit is generally lower than the full retail rate you pay for electricity.

The exact credit depends on your utility and rate plan. For example, DTE bases its outflow credit on the power-supply portion of the customer’s retail rate rather than the complete retail rate, which also includes delivery charges.

Public Act 235 expanded the program by:

• Increasing the statewide enrollment cap from 1% to 10% of utility peak load;
• Allowing eligible systems as large as 550 kW; and
• Allowing customers to size systems to produce up to 110% of their electricity use during the previous 12 months.

Because export rates vary, Michigan homeowners should ask their utility how solar inflow and outflow are calculated before estimating savings.

How much are solar panels in Michigan?

Solar panel costs in Michigan typically range from $14,550 to $29,100 before incentives.

Your system size affects how much you pay overall. The typical system size for solar systems in Michigan is 11.9 kW. You might need a larger or smaller system, depending on your average household energy usage. The following table shows average solar cost by system size in Michigan and two of its cities.

How much can I save with solar panels in Michigan?

On average, Michigan homeowners with solar panels avoid $53,052 in utility costs over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money versus paying traditional utility bills. In Michigan, solar panels usually pay for themselves within 9.6 years.

» EXPLORE: Where solar savings go the furthest

Find solar companies in Michigan

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Michigan’s top solar companies to learn more.

FAQ

Bottom line

Although there aren’t as many incentives as in some other states, appealing tax breaks, low interest loans and other initiatives make going solar worthwhile for many Michigan homeowners.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, it’s worth it for many homeowners, particularly for homeowners in Michigan. The table below shows some solar costs vs. savings in Michigan and nearby states.