Michigan State ranked 12th in residential and 13th in commercial electricity rates and consumption in the country, making it a concrete consideration to invest and generate your power through a solar panel system. Though charges for electricity significantly increase, the prices of solar energy systems have remarkably declined by 50% over the last years.
Added to this is the intensification of federal solar incentives, such as net metering and low-cost financing, which makes solar energy systems more economical. As such, the Great Lakes State's solar investment is expected to increase.
Michigan Renewable Portfolio Standards (RPS) is voluntary and not mandatory; simply a goalpost for utility companies. As goals go, however, Michigan 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.
But, property owners in the Great Lakes State can avail of the new distribution scheme, the Distributed Generation Program. This solar incentives program provides credits for distributed energy at a lower than retail rate. It also empowers property owners to cut costs on their electricity bills by acquiring credits for their solar energy systems.
The state's simple, straightforward, and state-wide interconnection standards are regulations for connecting private solar power systems to the grid, a method of "plugging into" the grid. The standards make installation easier and usually less expensive, making net metering more reliable.
Favorably, Michigan provides generous Performance-Based Incentives (PBIs), which are solar incentives based on the actual, metered power that your system generates. Solar Power Performance Payments, or SRECs, are payments based on the amount of electricity your solar power system generates, measured in kilowatt-hours (kWh) or BTUs and recorded by the meter. SRECs are credited for the electricity produced, and their value varies depending on the location and the supply and demand of SRECs. Taking advantage of SRECs is an excellent strategy to help your solar energy system pay for itself.
Michigan property owners can obtain low-cost financing to invest in a solar energy system through a non-profit green bank called the Michigan Saves. The bank provides $1,000-$100,000 in finances, subject to the partner creditor. Presently, the interest rate is 3.99%, with a mortgage tenure of up until 15 years. At the same time, business owners can benefit from a low-cost PACE loan for solar installation.
In 2019, Governor Gretchen Whitmer re-established Michigan property tax exemption for solar energy systems contained in laws of SB 1105 and SB 1106, which exempt solar energy systems from personal property tax and as a replacement for the request on the "Payment Instead of Taxes" (PILT) scheme. Based on this scheme, solar contractors pay only a total PILT rate fixed in the state's law and accordingly on the magnitude of the solar energy system.
Michigan provides ample solar incentives and rebates, and on top of that, the Federal government also offers a significant tax credit for solar investments, referred to as the Solar Investment Tax Credit (ITC), which can reduce the system cost by 26% and will be applied to your Federal income tax. It's important to note that the credit only applies to system owners who purchase their system outright with cash or a loan, and if you lease a system, the incentives will go to the third-party owner.
It's time to go solar in the state of Michigan! Solar energy system investment can save you tons in your electrical bills. Ensure to partner with a dependable solar company to assist you with your decision to go solar and explore options available to make the best of all the Michigan solar incentives and rebates!
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