Michigan Solar Incentive Programs

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Michigan experiences a diverse climate with approximately 180 sunny days annually, providing a reasonable amount of sunlight for solar energy initiatives. The solar incentive programs in Michigan as stated below are designed to encourage the adoption of solar energy, offering financial benefits to homeowners and businesses that invest in solar power systems.

Federal Incentives

Federal Investment Tax Credit (ITC)

Commercial solar energy systems installed in Michigan can take advantage of the Federal Investment Tax Credit 48E, which provides a tax credit of 30% of the total cost of the system, provided prevailing wage and apprenticeship requirements are met. 

Residential systems can no longer claim any federal solar tax credit, as the One Big Beautiful Bill eliminated it for systems installed after January 1st, 2026. 

Commercial Depreciation

Commercial asset owners can write off 100% of a project’s value in depreciation in the first year. The One Big Beautiful Bill reinstated the 100% bonus depreciation, while simultaneously eliminating the Modified Accelerated Cost Recovery System (MACRS) that previously depreciated solar energy systems over 5 years. 

The depreciable basis of a project is reduced by half of the ITC value when combined with the 30% ITC. Here’s a quick example:

• Project cost = $800,000
• 30% credit = $240,000
• Reduced depreciation basis: $800,000 – ($240,000 / 2) = $680,000

A company’s tax rate is then taken into account to calculate the exact amount they’re able to write off. .

Michigan Property Tax Exemption

In 2019, Governor Gretchen Whitmer signed a bipartisan bill that reinstated a property tax exemption for renewable energy systems in Michigan. Homeowners with solar won’t have to pay heightened property taxes, despite the increased value of their home.

Distributed Generation and Net Metering in Michigan

Michigan has transitioned from net metering to distributed generation, which many find unfavorable. However, existing net-metering customers were grandfathered in, receiving the net-metering rate for 10 years before they’ll have to switch to distributed generation.

Solar Panel Costs in Michigan

The cost of solar panels in Michigan is influenced by various factors, including system size and installation complexity. While there are no state-specific tax rebate programs, local incentives and federal programs help to keep down the cost of solar panels.

Residential Loan Programs

The Michigan Saves loan program assists homeowners in securing financing ranging from $1,000 to $50,000 for home energy upgrades and installations. The term of this financing can extend as long as ten years.

Rebates from Utility Companies

In Michigan, rebates are administered by WPPI Energy and offered by seven different utility companies in the state. Rebates include $30 per square foot of collector area for solar-thermal systems and $2-$3 per projected annual kWh for photovoltaic systems.

Michigan’s solar incentives, including the Federal Solar Tax Credit, property tax exemption, and financing options, make solar energy systems more accessible and affordable for residents. While the state may not offer as many incentives as others, these programs still provide significant financial benefits to those looking to invest in solar energy.

Further information and programs can be found at the Programs.Dsireusa.org