Michigan Solar Panels: Pricing and Incentives


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Solar energy in Michigan is on the rise. The cost of solar panels in Michigan have fallen by 43 percent over the last five years. Currently, there are over 83,000 homes powered by solar energy in Michigan. What’s more, in the coming years, solar usage is expected to increase significantly across the state.

There are many reasons why people choose to invest in residential solar panels. Using solar energy can reduce your electric bill. In some cases, you can even sell your excess electricity to the grid. Beyond the financial benefits, solar energy is a renewable power source and is generally considered one of the most environmentally-friendly methods for generating electricity.

Michigan solar panel cost

Solar panel costs are measured in how many watts per dollar the system can deliver. On average, a residential solar panel system costs between $3 and $5 per watt. When added up, this leads to an average solar cost of $15,000 to $25,000. Keep in mind, this price is before solar rebates and tax credits are taken into account. And solar panels will eventually pay for themselves through energy cost savings. The average amount of time it takes for a residential solar system to pay for itself is 6 to 9 years. 

The cost of solar panels in Michigan has been going down in recent years, but this upfront cost can still be a significant barrier. With rebates, tax credits, and the options for leasing and community solar projects, these costs are becoming increasingly manageable.

Why choose Michigan solar power?

Lower energy costs

One of the top reasons people choose solar is to save on their energy bills. When your home is powered by the sun, you can reduce your energy bill by as much as 50 percent. Throughout the life of your solar panels, you will likely see a significant return on your initial solar investment through your lower energy costs.

But not only do solar systems reduce utility costs, they also add to a home’s value. In fact, having a working solar system installed increases a home’s resale value by up to $15,000. This increased value alone could be enough to cover the initial cost of solar. 

Establish energy independence

Energy independence is another strong reason to go solar. With your own solar electricity supply, you no longer have to worry about peak load times on the local electrical grid. This can save even more on energy costs during times of high demand. It can also mean having electricity even if there are power outages or electrical issues in the local grid from weather or construction.

Go green

Using clean energy, like solar, is one of the best ways to reduce your home’s carbon footprint. While traditional power sources such as oil or gas emit fossil fuels into the atmosphere, solar panels do not. This means that you can power your home with clean solar energy – both saving on your energy costs and benefiting your environment.

Michigan solar panel incentives or rebates

While initial installation can be costly, there are rebates and incentives to help offset that upfront cost. When it comes to Michigan solar incentives, there are a few different components to consider.

There are several such incentives and rebates at the federal level. A 26 percent federal solar tax credit is available for homeowners who install solar panels on their primary or secondary residence in 2021. As of now, this tax credit is set to expire in 2024 unless Congress renews it. While this has happened before, there is no guarantee that it will be renewed. With that in mind, homeowners interested in solar should consider purchasing a system sooner rather than later to guarantee that they benefit from the tax credit.

The state of Michigan also offers some incentives and rebates. The state offers low-interest loans to purchase and install residential solar systems. Homeowners who generate more electricity than they use can also sell some back to the local grid through a program called net-metering.

Should I buy or lease my solar panels?

Buying solar panels requires a hefty upfront investment, which isn’t always feasible for some homeowners. Leasing solar panels can still save homeowners money on utility bills. While leasing solar panels will cost less money upfront, buying them will save more over time. If you lease a solar system, you won’t be able to benefit from the savings offered by tax credits or incentives. 

What’s more, leasing a solar system does not increase your home’s value. In fact, opting into a solar lease may make it more difficult to sell your home since the potential buyer would have to take over your contract. That being said, solar leases can make solar power more accessible for some families. 

There is also a third option. Some programs exist for shared or community solar systems in Michigan. These programs can save individuals money on the system by sharing the cost with others. Another option is a solar purchase power agreement (PPA), which operates similarly to a solar lease. Whether signing a lease or a PPA, there are important factors to consider first.

Michigan solar panel companies

There are a variety of Michigan solar panel companies available offering solar installation. Before choosing the best solar installer in Michigan, be sure to thoroughly review your options. During your search, it’s important to read customer reviews, research business history, and ask the solar companies about warranties and guarantees for the solar system. SaveOnEnergy’s solar guides and resources can help you understand the solar industry and prepare you to find the right solar panel company for your energy needs.

The history of solar power in Michigan

The first solar cell rooftop panels, though, were created in 1883. Michigan currently ranks 26th in solar power generation in the country, and that amount is growing. With solar powering just over 83,000 homes, there’s plenty of room for growth. For instance, Michigan is ranked 18th for solar power growth potential. Michigan is expected to grow by 1,802 MW in solar over the next five years.

Of its solar farms, Michigan has at least fifty that generate 0.5 MW or more. The largest of these can generate more than 28 MW, although most are closer to 1-2 MW. Also among the state’s solar projects are multiple community solar projects.

Important solar installation factors to consider

Solar is a remarkable technology, but it does have some limitations. Several factors can impact how effective solar panels would be for your home, including:

  • The angle of your home’s roof: Panels work best in direct sunlight. Roof angles don’t always align with the sun’s path and can limit how much direct light reaches the solar panels.
  • How much sunlight your home gets: The more sunlight your state receives per year, and the more sun your roof gets, the better your panels can work. Solar panels only work when they can capture sunlight. While panels can still generate energy during cloudy days or in indirect light, they are much more effective when the sun shines directly on them.
  • HOA and neighborhood rules: Depending on your neighborhood rules or an HOA, there may be limitations on what kind of panels you are permitted to install.

Solar power FAQs

How much would solar cost in Michigan?

 Solar system costs are measured in dollars per watt. On average, residential solar systems cost $3-5 per watt. This comes out to an average cost of $15,000 to $25,000. These numbers don’t include rebates or tax credits.

Is solar power a good investment in Michigan?

Many variables go into determining how much money solar could save you in the long run. How frequent and bright the sunlight is at your location, local weather patterns, home energy usage, and more can all impact the viability of a solar system. However, solar panels have the potential to reduce your energy costs by up to half. If solar panels can work for your home, they can be a very worthwhile investment.

How much could I save by investing in solar?

 After the system has paid itself off (an average of 6-9 years), solar systems can theoretically save up to 100% on residential electricity bills if they cover your home’s energy usage entirely. However, most homes will use more electricity than they produce. Estimates predict solar energy can cut your energy costs in half.

Where can I find a good solar panel installer in Michigan?

There are a variety of good solar panel installers in Michigan. Begin your search here by reading SaveOnEnergy’s solar guides. When you’re ready, you can begin receiving quotes from solar companies in your area with a working knowledge of the solar industry.

How does solar power help the environment?

Solar panels’ process to generate electricity doesn’t emit carbon dioxide and is completely renewable. Using home solar panels can reduce your home’s carbon footprint and encourage the energy industry towards a more eco-friendly direction.