Solar panels in Michigan: cost, payback and the rules that matter
Michigan homes pay 21.5¢ per kWh for electricity, the 13th highest of 51, up 8.8% in a year. A typical home needs 15 panels. With no federal tax credit they pay for themselves in about 11.1 yrs.
Four facts that decide solar in Michigan
1. The sun. One kilowatt of panels makes about 1,251 kWh a year in the median Michigan city, from 1,228 in Wyoming to 1,256 in Ann Arbor.
2. The price of electricity. Every kWh your panels make is worth what you would otherwise pay: 21.5¢ in Michigan today.
3. What your utility pays for exports. Most Michigan utilities still credit exported solar close to the retail rate, but rules differ by utility and change often.
4. Incentives. The 30% federal Residential Clean Energy Credit (IRC §25D) ended for systems whose installation is completed after December 31, 2025 (One Big Beautiful Bill Act, P.L. We don't know of a statewide income-tax credit for home solar in Michigan.
Michigan's homes
4,076,369 households; 73.2% own their home. 2,767,641 owner-occupied single-family houses: the main market for rooftop solar. The median home was built in 1972; 12.1% heat with electricity.
ACS 2020–2024 5-year estimates, U.S. Census Bureau.
Plan a specific Michigan home
Solar in every Michigan city with 50,000+ people
| City | Sun hrs/day | kWh per kW | Best tilt | Typical kW | Payback (NM) | Payback (NB) | Solar ¢/kWh |
|---|---|---|---|---|---|---|---|
| Detroit | 4.3 | 1,251 | 35° | 6.3 | 11.1 yrs | 18.4 yrs | 12.4 |
| Grand Rapids | 4.2 | 1,229 | 34° | 6.3 | 11.3 yrs | 18.5 yrs | 12.6 |
| Warren | 4.3 | 1,253 | 35° | 6.3 | 11.1 yrs | 18.4 yrs | 12.4 |
| Sterling Heights | 4.3 | 1,249 | 35° | 6.3 | 11.1 yrs | 18.4 yrs | 12.5 |
| Ann Arbor | 4.3 | 1,256 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Lansing | 4.3 | 1,249 | 36° | 6.3 | 11.2 yrs | 18.4 yrs | 12.5 |
| Dearborn | 4.3 | 1,251 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Livonia | 4.3 | 1,254 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Troy | 4.3 | 1,250 | 35° | 6.3 | 11.1 yrs | 18.4 yrs | 12.5 |
| Farmington Hills | 4.3 | 1,255 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Westland | 4.3 | 1,254 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Flint | 4.3 | 1,243 | 36° | 6.3 | 11.2 yrs | 18.4 yrs | 12.5 |
| Wyoming | 4.2 | 1,228 | 34° | 6.3 | 11.3 yrs | 18.5 yrs | 12.7 |
| Rochester Hills | 4.3 | 1,247 | 35° | 6.3 | 11.2 yrs | 18.4 yrs | 12.5 |
| Southfield | 4.3 | 1,254 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Kalamazoo | 4.3 | 1,236 | 34° | 6.3 | 11.2 yrs | 18.4 yrs | 12.6 |
| Novi | 4.3 | 1,255 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Pontiac | 4.3 | 1,249 | 35° | 6.3 | 11.1 yrs | 18.4 yrs | 12.5 |
| Taylor | 4.3 | 1,251 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Dearborn Heights | 4.3 | 1,253 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| St. Clair Shores | 4.3 | 1,252 | 35° | 6.3 | 11.1 yrs | 18.4 yrs | 12.4 |
| Royal Oak | 4.3 | 1,253 | 35° | 6.3 | 11.1 yrs | 18.3 yrs | 12.4 |
| Kentwood | 4.2 | 1,230 | 35° | 6.3 | 11.3 yrs | 18.5 yrs | 12.6 |
| Battle Creek | 4.3 | 1,242 | 35° | 6.3 | 11.2 yrs | 18.4 yrs | 12.5 |
NM = exports credited at retail (net metering); NB = exports at ~30% of retail (net billing). Systems sized to the Michigan average home. $3.00/W, cash, 25 years.
Rule changes that affect Michigan
All changes and deadlines →- Federal: In-service deadline for the lease/PPA solar credit · Tax credits
- Federal: National data: solar prices fell to a median $3.60 per watt · Prices
- Federal: Construction-start deadline passed for the lease/PPA credit · Tax credits
- Federal: The 30% homeowner solar tax credit is gone · Tax credits
Questions about solar in Michigan
How much do solar panels cost in Michigan?
A 6.3 kW system, the size the average Michigan home needs, costs about $15,750 to $23,625 before incentives in 2026.
Is solar worth it in Michigan?
In the median Michigan city, solar pays for itself in about 11.1 yrs if exported power earns the retail rate, or 18.4 yrs if it earns about 30% of retail. Most utilities here still offer some form of net metering; check yours.
Is there a solar tax credit in Michigan?
We know of no statewide income-tax credit for home solar in Michigan; utilities and cities sometimes offer rebates. The 30% federal credit ended for homeowner systems installed after December 31, 2025.
How many solar panels does a Michigan home need?
About 15 panels of 420 watts for the state-average 618 kWh a month. Sunnier cities need fewer: Ann Arbor gets 1,256 kWh per kW a year, Wyoming 1,228.