Cost of solar panels in Michigan (2024)

How much do solar panels cost in Michigan?

With professional installation, a typical 10-kilowatt residential solar panel system in Michigan costs $31,500. That price drops to $22,050 after the full federal solar investment tax credit (ITC). On the high end, Brenda in Saint Louis, Michigan, told us she spent $52,000 on a system.

The size of your solar panel system is another big factor in your overall solar costs. The average size of solar systems in Michigan is 9.81 kW (kilowatts). Depending on your household energy usage, you might need a smaller or larger system.

Average solar installation cost by system size in Michigan

Are solar panels worth it in Michigan?

Despite the state's cloudy days and snowy northern climate, solar panels can be worth it in Michigan. But it's important to note the cost-effectiveness of solar panels depends on several factors, including your household energy needs, the condition of your roof and where you live in Michigan. Some feel that systems are priced too high for the savings they get.

For instance, George in Port Huron, Michigan, told us the value wasn't what he expected. “I thought I could save more or it would not be as expensive. It will take years to recoup my cost into what I have paid,” he said.

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

Going solar is really a long-term investment. On average, you’ll spend $11,025 to $31,500 for panels that last about 25 years. Over that same time period, you’d avoid approximately $53,663 in total utility costs.

We suggest using the National Renewable Energy Laboratory's PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery. If your house is a good candidate for solar, it’s worth it if you like the idea of lower monthly utility bills and more energy independence.

» STILL NOT SURE? Solar energy pros and cons

Solar panel installation cost factors in Michigan

Before jumping into solar, you need to understand the full cost of installing a solar energy system. It isn’t just the cost of panels. You also have to pay for any roof repairs, permits and more.

The equipment — solar panels, inverters, mounting hardware and other electrical accessories — is typically the largest portion of your overall total costs (approximately 25% to 50%). Labor, which includes planning, preparing and connecting your system to the grid, accounts for 10% to 30%. Local permits and fees are a small part of your overall costs.

» BEST STATES FOR SOLAR: Michigan ranked 40th in 2024

Solar panels

Most of your solar equipment costs come down to how much you pay for solar panels. You’ll hear installers talk about how “efficient” their panels are.

Solar panel efficiency is a measure of how well a panel makes electricity. The more efficient the solar panels you buy are, the fewer panels you need. While more efficient panels cost a little more, you save by buying fewer panels.

In general, monocrystalline panels are considered the best bang for your buck. Cheaper solar panels are typically polycrystalline. The difference comes down to efficiency and materials: Monocrystalline panels are made from pure, single silicon crystals; various silicon fragments melted together are used to make polycrystalline panels.

Additional solar equipment costs

Solar arrays also contain mounting equipment, wiring and other devices, such as inverters, batteries or a monitoring system.

• Solar batteries: A battery stores energy for later use. It’s a must if you want real energy independence, and they sometimes cost as much as the panels. Prices often depend on the battery’s storage capacity, life span, brand and other factors. Expect to pay between $7,000 and $18,000, though some cost $30,000 or more.
• Solar inverter: Inverters convert the electricity generated by your solar panels from direct current (DC) to alternating current (AC). Inverter costs usually range from $1,000 to $3,000.
• Monitoring system: Some companies include a solar monitoring system to track how much energy your system produces and if there are any problems. If not, you can buy a stand-alone system for $80 to $400.

Size of your system

The size of your system plays a big factor in how much you pay overall. You can easily determine what size system you need. First, find out the amount of electricity you used in the last year in kilowatt-hours (kWh). You’ll find this information through your electric company’s online account dashboard.

Check the amount of electricity you used last year in kWh. You’ll find this information in your electric account dashboard online. Then divide your annual kWh by 1,200 to find the system size you need. For example, if your home used 15,000 kWh last year, you would need a 13-kW system.

Condition of your roof

Quality solar panels should last 25 to 30 years, and your roof needs to last just as long. If you want to ensure a seamless and cost-effective solar journey, your roof must match the system's longevity. Get your roof inspected, fixed or replaced before you go solar.

ConsumerAffairs often hears from disgruntled solar customers who felt blindsided by expensive roof repairs needed after their solar panel installation was complete. This is a frustrating and expensive process you should avoid if you can.

Labor costs

Solar equipment costs are going down, but labor costs are higher than ever in some areas. Installing solar panels yourself might initially seem cheaper because you'll save on labor costs. However, it's crucial to consider several factors for safety before going the do-it-yourself route. If not installed correctly, solar panels pose safety risks, causing roof leaks and other problems.

Local permits and fees

Permits and interconnection fees, though relatively cheap, are worth mentioning. In most parts of Michigan, the costs associated with permits can range from a few hundred dollars to a few thousand, depending on the specific requirements and regulations of the local jurisdiction. Michigan State University’s Solar Planning and Zoning guide is a helpful resource for more information.

» GREENEST STATES: Michigan ranked 44th in 2024

Solar incentives, tax credits and rebates in Michigan

Solar incentives in Michigan include rebates and loan programs, but the federal solar investment tax credit (ITC) is still the best financial incentive for going solar in Michigan. The ITC credits 30% of the system’s total cost — including equipment, labor and permits — toward what you owe on federal income taxes.

The ITC drops to 26% in 2033 and then 22% in 2034.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $15,000 in taxes, the credit reduces your debt to $12,000. The ITC only offsets your tax liability; you can't take advantage of it if you don’t owe taxes in the first place.

How to pay for solar panels in Michigan

Affordable financing makes the upfront costs of solar more manageable. A solar loan works like any other type of home improvement loan — there’s an application and approval process, and you pay it back over time (with interest) each month. In an ideal financing scenario, your system generates enough extra power to pay off the loan. Solar loan terms typically last eight to 20 years. Additional options in Michigan include:

• Michigan Saves: The nonprofit Michigan Saves has partnered with lenders offering loans up to $100,000 for residents going solar. Rates are typically around 7.5% APR, and terms are available for up to 15 years.
• Lean and Green Michigan: Lean and Green Michigan’s Property Assessed Clean Energy (PACE) program that lets commercial, industrial and multifamily property owners finance energy improvements with no upfront costs.
• Lease: Leasing solar panels is a great way to set up a system without the high upfront costs. A potential downside is that you are not eligible for the same tax incentives.
• Home equity: Using a home equity line of credit or loan to finance a solar installation can be a financially beneficial option — home equity interest rates are relatively low, and homeowners can still take advantage of the federal solar investment tax credit.
• Power purchase agreement: A solar power purchase agreement (PPA) is similar to leasing. A solar developer buys, installs and maintains solar panels on your property. You buy the power generated by the system on a per kWh basis. It’s a fixed price, and the cents per kWh is usually cheaper than the utility’s rate for the same amount of electricity.

» SOLAR PANELS: Lease vs. buy

How to save money on solar panels in Michigan

There’s no way around it — solar panel installations are expensive. Here are some tips to maximize your savings on solar panels in Michigan:

• Compare quotes: Get quotes from at least three or four different solar companies in Michigan. This lets you compare different proposed equipment, pricing, financing terms and estimated energy production to find the best overall value. Don't just go with the cheapest option without vetting quality and services.
• Lower your electrical load: Before going solar, it’s smart to upgrade any old appliances. For example, replacing an old refrigerator with a more eco-friendly one reduces your electric load, which also helps lower your utility bill. If you use less electricity, you need fewer solar panels, making the whole system cheaper.
• Use incentives: In addition to federal incentives and state initiatives, you might be able to take advantage of solar panel manufacturer rebates. While these may not be specific to Michigan, they can still provide additional savings.

» MORE: Why are solar panels so expensive?

Compare solar installation companies in Michigan

We compared ratings and reviews, equipment options, warranties, availability and other factors to pick the top solar companies in Michigan.

Bottom line

Michigan is overall a great place to go solar. The ConsumerAffairs Research Team has conducted extensive research to compare the costs of going solar in Michigan and other states.

Solar costs vs. savings: Michigan and nearby states