Solar Panel Cost in Michigan (2022 Local Savings Guide)
Here’s a quick look at the estimated cost of solar in Michigan:
- Average Cost Per Watt: $2.81
- Cost of Average System: $14,556*
- Cost of Energy Without Solar: $43,322
- Payback Period: 10 Years**
- Lifetime Savings of Going Solar: $23,652
*Average system size is calculated using data from the Energy Information Administration. This price is after tax credit.
**Payback period is calculated assuming the system is purchased in cash.
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Cost of Solar Panels in Michigan
Solar panel systems in Michigan are sold by the watt, at an average price of $2.81 per watt. This is above the national average of $2.66, so the cost of going solar in Michigan is a bit higher than in most other states. The typical system size recommended for Michigan homes is 7 kW, for which the average price is around $14,556 after the federal tax credit is taken.
The average monthly electric bill in Michigan is well above the national average at around $143. While energy costs aren’t comparatively that expensive, homeowners throughout the state use a lot of it. The slightly above-average cost of going solar, the rising electricity rates and the large amount of energy used make solar energy a great option in Michigan.
Solar Panel System Installation Cost in Michigan
Solar panel systems in Michigan typically range anywhere from around $10,000 to well over $20,000. The most significant factor to consider when determining where within that range your total will fall is the size of your system. Systems are priced according to watts, and every additional kilowatt will add approximately $2,810 to your total. The table below provides some average pricing for typical system sizes in Michigan.
|Size of Solar Panel System||Michigan Solar Panel Cost||Cost After Federal Tax Credit|
Interested to see the best solar companies in Michigan that offer affordable, high-quality systems? Click below.
What Determines the Cost of Solar Panels in Michigan?
Solar panel systems in Michigan usually cost around $14,556 but can reach prices as high as $30,000 or more. The reason for the price variance lies in a number of factors that influence the cost of your system based on the installer and equipment you choose.
We’ll discuss the most significant cost factors below.
As you might expect, the equipment you choose for your solar energy system will play a major role in your pricing. This is the case for two reasons: Solar panel brands vary in quality, efficiency and price, and different equipment options can bring your price up or down by thousands of dollars.
Not all solar panel brands are created equal, so choosing one that suits your budget and your energy needs is important. Michigan residents only enjoy around 170 sunny days per year, which pales in comparison to the national average of 205.
With the relative lack of sunlight, high-efficiency panels are often needed for the production necessary to offset your energy bills. Efficient panels are more costly, so you’ll end up paying more for solar, on average, than you would in most other states.
Michigan is also home to some severe weather, including tornadoes, severe snow storms and intense thunderstorms. In many cases, these weather events can lead to power outages that are inconvenient and, in the worst-case scenarios, dangerous for residents.
That’s why many Michiganders opt to install solar batteries with their panels, despite these add-on pieces of equipment being more expensive. Again, this raises the average price of solar panel systems statewide.
Solar Financing in Michigan
Many people choose their financing method based on their budget, which is understandable, but if you have the option, you should consider choosing based on what will generate the most valuable long-term returns. This usually involves maximizing what you pay upfront.
A cash purchase requires the highest upfront payment, but you won’t pay interest, and you’ll save the most money on energy over time. As such, cash purchases are the most ideal way to finance your system.
A solar loan reduces or eliminates your upfront costs, but they add interest to your total, which reduces your long-term savings. Solar leases and PPAs eliminate your upfront payment as well, but they save the least and end up being the most costly over time.
Michigan offers Property Assessed Clean Energy (PACE) funding to homeowners, which is a great option for securing an accessible solar loan while keeping your interest rates low.1
Unfortunately, there are no financing options for low-income households to acquire solar that are backed by the state government. However, there are private community solar companies that can allow low-income customers to take advantage of clean energy.2
Michigan Solar Installation Company
Many aspiring solar customers don’t realize that the cost of their solar system depends on their installer, even if they choose specific equipment and brands beforehand. Each company will have its own installation fees and equipment charges, so identical systems can cost different amounts depending on the company.
It’s important to assess installers based on more than just cost, though, as not every installer provides access to the same equipment. For example, The Green Panel, a local solar installer in Michigan, installs panels made by affordable manufacturers like Panasonic and Tesla, so the average price from this vendor may be relatively low.
SunPower, a national company that serves Michigan, only installs high-quality Maxeon panels. These are more costly than most options from local companies, so the average vendor price will be higher. However, the overall quality is also more appealing, as is the warranty, efficiency and appearance of the panels.
Additional Considerations and Costs in Michigan
Michigan residents should also consider some of the below more minor aspects of installing solar panels, as these can affect your overall experience as well.
- Permits: Acquiring a building permit for your solar panel system is a requirement in Michigan before any work is completed. You should check with your installer if it will be pulling permits, which is standard practice but not universal.
- Interconnection: In order to connect your system to the grid in Michigan, you’ll need permission from your electricity provider in what’s called an interconnection agreement. These agreements can come with fees for the services of your utility (like inspections and meter installations) and range from $25-$500 depending on your area.
- Warranties: Solar warranties can guarantee the performance of your panels, the durability of your system and the quality of the installation. Some of the best warranties cover all three, plus roof leaks caused by roof penetration. Sometimes, extended warranties have to be purchased separately, so keep that in mind when you choose your brand.
- HOAs: Unfortunately, Michigan is one of the few states that doesn’t have solar rights and easement laws in place. As such, you will need to get permission from your HOA if you have one before installing solar panels.
- Environmental zoning: The zoning laws in Michigan rarely restrict rooftop solar installations, but you could run into issues if you’re looking to install ground-mounted panels. You should check with your local building department for guidance.
Michigan Solar Incentives
Luckily, there are many governmental programs available at the federal and state level to make switching to renewable energy more accessible for Michigan homeowners. Below are all of the solar incentives, rebates and credits you can take advantage of in the Great Lakes State.
Federal Solar Tax Credit for Michigan Homeowners
The federal solar investment tax credit (ITC) is a credit offered by the federal government to all Michigan homeowners who convert to solar energy in their homes. This is one of the most appealing solar incentives, as it provides a rebate in the amount of 26% of your total cost to install your solar system. In Michigan, with an average system cost of $19,670, that equates to an effective savings of $5,114.
The federal tax credit is scheduled to dip to 22% for installations completed in 2023 and then be eradicated for residential solar projects in 2024. Congress has the option to renew the bill, but even if it does, the rebate rates will almost certainly be lower than they are now.
Net Metering Policies in Michigan
Net metering is a billing option that allows two-way movement of energy via an inverter. When your home is demanding more energy than your solar panels are producing, the electrical grid will supplement electricity to meet the demand.
When your panels are producing more than your home is consuming, the excess energy will be sent to the grid and you’ll be compensated in some way. Compensation can be in the form of credits to your electric bill or in direct payment from the energy company.
Unfortunately, net metering is not mandated by the state government in Michigan, so some power companies throughout the state do not offer it, and many offer a less appealing net metering option where they charge retail prices for energy sent to your home but pay wholesale prices for overproduction you send them.
For example, Detroit Energy (DTE) is planning on decreasing net metering from retail to wholesale and switching to an in-flow, out-flow model. This new system will be less beneficial to solar customers and decrease savings over time.
Before you sign any contracts or agree to switch to solar, make sure you check the net metering policy offered by your electric company, as this single factor can change how much you save in the long run and how long it takes to pay off your solar system.
PRO TIP: When you’re choosing a solar panel installation company, check to make sure it has worked with your power company in the past. Installers that aren’t familiar with utility companies often cause delays in the process. Check the company’s net metering policy as well to determine how much benefit you’ll get from your solar conversion.
Local Solar Rebates in Michigan
Finally, there are some local rebates provided by the State of Michigan to incentivize residents to go solar.
First, the state offers a property tax exemption. Solar panel installation raises the value of your home, provided you buy or finance the system. Normally, an increase in home value would affect the assessed value and, consequently, your property taxes. To reduce the effective cost of installing solar, the state refuses to tax any added home value from your solar system, potentially saving you thousands or tens of thousands of dollars over time.
Second, the Michigan Saves Home Energy Loan Program is an organization that negotiates loan terms and APR to secure affordable financing for customers in Michigan. Provided you opt for an approved installer within the program’s network, you could save hundreds or thousands of dollars in financing costs by getting a lower APR through the program.
Third, the Michigan Local PACE program is another that helps secure affordable financing for Michigan residents for photovoltaic equipment. It allows you to pay off a low-APR loan via special assessments on your tax bills, making renewable energy more accessible for everyone.
For more information about additional incentives, you can check the Database of State Incentives for Renewables & Efficiency (DSIRE) website before you commit to going solar.
The Best Solar Panel Brands Available in Michigan
You’ll have access to lots of solar panel brands in Michigan, so you’ll be able to optimize your selection based on your budget and energy production expectations. The table below provides a quick overview of how the pricing of some of the best solar panel brands compares.
|Panel brand||Avg cost ($-$$$$$)|
Ready to get a quote for your solar panel system? Check out our preferred providers below, and we’ll have a local installer provide a free, no-obligation estimate for a system designed to suit your home and your energy needs.
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FAQs: Solar Panel Cost Michigan
The EcoWatch team gets tons of questions about home solar PV systems from Michigan residents. Below are some of the questions we see most often. If you have specific questions that aren’t answered here, reach out to our team of solar experts at email@example.com.
The average system in Michigan on the typical home will be around 7 kW. At an average price of $2.81 per watt, the standard system will cost approximately $19,670 or $14,556 after the federal tax credit is received. However, the price you can expect to pay can vary wildly. Some factors to consider include the size and energy efficiency of your home, your typical monthly electric bill, the size of your roof, and more.
The cost of going solar is higher in Michigan than the average, but residents use more energy than in most other areas, so converting to solar power is often worth the initial investment.
Yes, absolutely. Provided you buy or finance your solar panel system, experts from Zillow estimate that your home value will jump an average of 4.1%. The average home value in MI is $219,930 at the time of publication, which means you stand to increase your property by about $9,017 just by going solar. Estimates from other sources, like the Berkeley Lab, are even higher.
Unfortunately, you won’t experience the boost in home value from solar if you lease solar panels or enter into a Power Purchase Agreement (PPA).
Solar leases have their place in the solar industry, but we always recommend buying your panels outright or financing when you have the option.
Leases are good for some solar customers who cannot secure financing, as they reduce the barrier to entry by limiting upfront costs. However, leases save you the least over time and don’t allow you to take advantage of solar incentives.
On the other hand, purchases and financed systems can sometimes be more costly upfront but always lead to more significant savings over time. With the solar financing options available in Michigan — like Michigan Saves and the PACE program discussed above — solar financing is accessible to most residents. When you buy or finance your solar panel system, you can take advantage of all solar incentives and rebates, plus you’ll enjoy a large bump in home value.
Yes, it is possible to eliminate your energy bills using a solar panel system, and many residents throughout Michigan do precisely that. However, it is more difficult in MI than in many other states because of the varying and sometimes unappealing net metering policies and electricity prices.
The size of your roof, your utility company’s policies, your average energy production, and several other factors will affect how easy it is to reduce your electric bill to $0. Contacting a reputable solar company in MI to assess your home is the best way to determine if this is possible for you.
Cost is the most crucial factor for most Michigan homeowners, but there are some other crucial considerations to make. These include local incentives, your utility company’s net metering program, increasing utility rates in your area, and the cost of adding on solar batteries, which are recommended for most MI homeowners to overcome power outages.
Paying a high upfront cost for a system might not seem worth it, but if the panels are high efficiency and your electric company offers a decent net metering policy, you could produce enough to save even more in the long run.