Is Solar Worth It in Michigan in 2026?
Complete analysis of solar costs, incentives, net metering, and payback for Michigan homeowners — without the federal ITC.
Cost Per Watt
$3.00
installed
Electricity Rate
$0.172
per kWh
Payback (No ITC)
14.4 yr
current reality
Payback (With 30% ITC)
10.1 yr
hypothetical
25-Year ROI
73%
return on investment
Incentive Breakdown — Michigan
Available incentives for a typical 7kW residential solar system in Michigan
Federal ITC (25D)
ExpiredThe federal solar Investment Tax Credit expired on January 1, 2026. No federal credit available for new installations.
State Tax Credit
NoneMichigan does not offer a state tax credit for solar installations.
SREC Market
Not AvailableMichigan does not have a traditional SREC market.
Property Tax Exemption
Solar system value excluded from property tax assessment
Sales Tax Exemption
No statewide sales tax exemption for solar
Key Incentives: Property tax exemption for solar.
Solar Math — With vs Without Federal ITC
Cost breakdown for a typical 7kW residential system in Michigan
2026 Reality (No Federal ITC)
- System Size
- 7 kW
- Cost per Watt
- $3.00/W
- Gross Cost
- $21,000
- Federal ITC
- $0
- Net Cost
- $21,000
- Annual Savings
- $1,455/yr
- Payback Period
- 14.4 years
Hypothetical (With 30% ITC)
- System Size
- 7 kW
- Cost per Watt
- $3.00/W
- Gross Cost
- $21,000
- Federal ITC (30%)
- -$6,300
- Net Cost
- $14,700
- Annual Savings
- $1,455/yr
- Payback Period
- 10.1 years
Impact: Without the federal ITC, Michigan homeowners face a 4.3-year longer payback period — paying $6,300 more out of pocket.
Net Metering Policy — Michigan
How Michigan compensates your excess solar production
Reduced export credits or net billing — you earn less than retail for excess solar. Moderate impact on payback.
Michigan transitioned from net metering to an inflow/outflow billing mechanism. Export credits are below full retail rate.
Cost Per Watt Benchmark — Michigan
Michigan Average
$3.00/W
National Average
$3.05/W
Typical 7kW System
$21,000
Michigan's average installed cost is below the national average of $3.05/W
Breakeven Timeline
Without the federal ITC, a typical 7kW system in Michigan breaks even in 14.4 years. With the former 30% ITC, payback would drop to 10.1 years.
Without Federal ITC
14.4
years to break even
With Former 30% ITC
10.1
years to break even
Production Details
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