Solar in Michigan: is it worth it in 2026?
Michigan is a slow-payback state: solar works, but it takes well over a decade to earn back what you paid. Three things decide that: electricity prices rank 13th of 51, it gets less sun than most states (44th of 51), and exported power earns much less than the retail rate. Of the 51 states and DC, Michigan has the 33rd-fastest payback for a typical home.
The average home here pays about $127 a month for 635 kWh. A 5.5 kW system sized for that home would knock about $996 off the first year's bills, 65% of the total.
Checked November 12, 2026
What makes solar pay off in Michigan
- Size the system to what you use during the day, not to your whole year: extra power sent to the grid earns about 50% of the retail rate. A battery, or running the dishwasher, laundry and EV charging while the sun is up, raises the value of every panel.
- The price per watt decides it. At 20.0¢ per kWh, the price per watt matters as much as the sun. At $3.34 per watt, the high end of what companies quote, payback for a typical system here stretches to 18 years.
Payback by system size
An average Michigan home uses about 7,620 kWh a year. Here's how systems sized to cover part or all of that work out, bought with cash at $2.57 per watt:
| Covers | Size | Price | Makes a year | Payback | 25-year savings |
|---|---|---|---|---|---|
| 51% | 3 kW | $7,710 | 3,873 kWh | 17 years | $7,032 |
| 76% | 4.5 kW | $11,565 | 5,810 kWh | 16 years | $11,860 |
| 102% | 6 kW | $15,420 | 7,746 kWh | 15 years | $16,662 |
| 127% | 7.5 kW | $19,275 | 9,683 kWh | 16 years | $17,067 |
The 6 kW system pays back fastest, but the 7.5 kW system saves the most over 25 years, though only if the extra power is used at home. Assumes exported power earns about 50% of the retail rate, prices rise 2.5% a year and one inverter replacement.
How Michigan credits power you send to the grid
Reduced credit (net billing)
Inflow/outflow billing: you pay full price for power you take from the grid, and power you send back earns the supply part of the rate. DTE pays roughly 7.75 to 14 cents and Consumers Energy 8 to 16 cents per kWh, depending on the rate plan.
By utility
- DTE Energy: Outflow credits at the power-supply rate: about 7.75 to 14 cents per kWh, depending on the rate plan and time of day.
- Consumers Energy: Outflow credits at the power-supply rate: about 8 to 16 cents per kWh, depending on the rate plan and time of day.
Before you sign in Michigan
Check the license. Look the company up with the Michigan Department of Licensing and Regulatory Affairs (LARA), by its legal name or license number, and ask for the electrician's license number too.
Michigan has no solar-specific sales law that we know of, so its general consumer protection law applies.
In every state, the FTC Cooling-Off Rule lets you cancel a contract signed at your home until midnight of the third business day.
How to choose a solar company · Contract checklist · Before you sign
Michigan compared with its neighbors
| State | Electricity | kWh per kW | Typical payback | Exported power |
|---|---|---|---|---|
| Michigan | 20.0¢ | 1,291 | 15 years | Reduced credit (net billing) |
| Ohio | 16.9¢ | 1,296 | 13 years | Monthly netting |
| Indiana | 16.0¢ | 1,332 | 19 years | Reduced credit (net billing) |
| Wisconsin | 18.1¢ | 1,334 | 14 years | Monthly netting |
Questions about solar in Michigan
How long does solar take to pay for itself in Michigan?
About 15 years for a typical 5.5 kW system bought with cash at the 2026 median price of $2.57 per watt, with no federal tax credit and one inverter replacement. A bigger or smaller system, a different price, or your own usage will change that; the table above shows other sizes.
Does Michigan have net metering?
Not full net metering. Inflow/outflow billing: you pay full price for power you take from the grid, and power you send back earns the supply part of the rate. DTE pays roughly 7.75 to 14 cents and Consumers Energy 8 to 16 cents per kWh, depending on the rate plan.
Is there a solar tax credit in Michigan in 2026?
Not from the federal government for buyers: the 30% homeowner credit ended for systems installed after December 31, 2025. For a typical 5.5 kW system in Michigan, that credit was worth about $4,241 and brought payback down to 10 years, instead of 15 years now. Leasing companies can still claim a business credit, so ask for a lease or PPA price too. Your state energy office lists any state rebates.
Is a solar battery worth it in Michigan?
On bill savings alone, not quite: a 13.5 kWh battery at about $15,650 would move about 3,548 kWh of solar power a year from the grid to your evenings in a typical Michigan home, adding about $4,890 of savings over 15 years. That doesn't cover its price, so the system's payback goes from 15 years to 23 years; the rest is paying for backup during outages. Time-of-use rates, battery rebates and utility payments for sharing your battery can tip it; try your numbers in the payback calculator.
Is plug-in solar legal in Michigan?
Not yet. A bill (HB 5764) is pending: in committee.
How do I check a solar company's license in Michigan?
Look the company up with the Michigan Department of Licensing and Regulatory Affairs (LARA) (michigan.gov/lara) by its legal name or license number, and ask for the electrician's license too.
More guides: What changed for solar in 2026 · Lease or buy? · Plug-in solar · Is my solar system working?
Sources: U.S. Energy Information Administration (EIA), final 2025 data: Annual State Historical Spreadsheets (Form EIA-861, released October 7, 2026) and Electric Power Annual (October 21, 2026); NREL PVWatts (National Solar Radiation Database), statewide averages; Palmetto: Michigan utility guide; Solar.com: Plug-in solar, the 2026 guide; EnergySage: median quoted price, first half of 2026.