Michigan Solar Incentives & Rebates Guide 2026

The federal Investment Tax Credit (ITC) allows Michigan homeowners to deduct 30% of the total cost of a solar energy system from their federal income taxes. For a typical 6kW system costing $17,280 in Michigan, that's a direct tax credit of $5,184. This isn't a deduction — it's a dollar-for-dollar reduction of your tax bill.

The 30% ITC is available through 2032 under the Inflation Reduction Act, then steps down to 26% in 2033 and 22% in 2034. There's no maximum cap on the residential credit. If your tax liability is less than the credit amount, you can roll the remaining credit forward to the next tax year. The system must be installed on your primary or secondary residence, and you must own it (leased systems don't qualify for the homeowner credit).

Michigan does not currently offer a state-level solar tax credit. However, Michigan homeowners still benefit from the substantial 30% federal ITC, worth $5,184 on a typical 6kW system. Even without a state credit, solar is economically attractive in Michigan with electricity rates averaging 20.01¢/kWh — well above the national average.

Great news for Michigan homeowners: Solar energy systems are exempt from property tax assessments. Must file for exemption certificate Studies show solar adds 3-4% to home values. For a $300,000 home, that's roughly $12,000 in added value — and with Michigan's property tax exemption, you save approximately $132 per year in property taxes you'd otherwise owe on that increased value.

Michigan does not currently exempt solar equipment from state sales tax. This means you'll pay the applicable sales tax on your solar system purchase. However, the 30% federal ITC and other available incentives more than compensate for this cost in most cases.

Net metering policy: Varies by Utility. DTE and Consumers Energy offer distributed generation tariffs; legacy net metering customers grandfathered The current system size cap is 20 kW.

Net metering policies in Michigan vary by utility. Contact your local electric provider to understand the specific buyback rate and any system size limitations that apply to your service territory.

Michigan has a mandatory Renewable Portfolio Standard (RPS) target of 15% by 2021 (met), 60% clean by 2035, 100% by 2040. This legally binding target drives continued investment in renewable energy infrastructure and often supports solar-friendly policies like net metering and SREC programs. A strong RPS is generally good news for solar homeowners, as it creates market demand for renewable energy and helps maintain favorable solar policies.