Michigan Solar
Incentives & Rebates

Updated March 7, 2021

Michigan’s Voluntary Renewable Portfolio Standards

RPS (Renewable Portfolio Standards) are voluntary in the state of Michigan. They are merely a goalpost for utility companies, not a requirement. As goals go, however, Michigan’s are pretty bold. The goal is to make 40% of energy through renewable sources by 2025, a much steeper goal than many other states have given themselves.

Michigan Electric Ranking

Michigan has the 12th highest electricity rates in the country, making it a solid place to consider generating your own power through a solar panel system.

Michigan Net Metering

Net metering is a system in which solar panels or other renewable energy generators are connected to the public utility, allowing customers to offset the cost of the power they draw from the utility with credits they earn on their own production. If your system produces more energy than you need, the excess power is sold to the grid, which you see as a credit on your power bill. Strong net metering laws are an asset to Michigan residents, smoothing the way to get a solar system connected to the public grid.

Michigan Interconnection Standards

The state’s standards for connecting private solar power systems to the grid are clear and simple statewide. This makes net metering more effective.

Michigan Performance-Based Incentives (PBI)

Michigan offers PBIs, which are incentives based on the actual power your system generates. The state calls them Solar Power Performance Payments. You get paid based on the actual kilowatt-hours (kWh) or BTUs generated by your renewal-energy system. The power produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the law of supply and demand and by location.

Last but Not Least: Federal Tax Credit

In addition to these many incentives in Michigan, of course you also get the hefty tax credit from the Federal government. The solar Investment Tax Credit (ITC) is worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit goes to the owner of the system, so be sure to buy yours with cash or a loan. If you lease a system, then the incentives go to the third-party owner.


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