Michigan’s Key Solar Incentives: A Breakdown

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Michigan’s solar energy landscape is evolving rapidly, with various incentives aimed at making solar power more accessible and affordable for residents. As the state shifts towards cleaner energy solutions, homeowners and businesses are increasingly looking to harness the benefits of solar power. This guide provides a detailed breakdown of Michigan’s key solar incentives, highlighting how they can reduce the upfront costs of installation, enhance long-term savings, and support the state’s transition to renewable energy. From tax credits to utility rebates, understanding these incentives is essential for anyone considering solar in Michigan.

The Residential Clean Energy Credit

The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.

Michigan’s Renewable Energy System Property Tax Exemption

The reinstated renewable energy system property tax exemption ensures that homeowners with solar or other renewable energy installations will not face increased property taxes due to the added value these systems bring to their homes. While homeowners will still be required to pay regular property taxes, they will be exempt from any additional tax burden resulting from the installation of renewable energy systems.

By eliminating the potential for heightened property taxes on homes with renewable energy systems, Michigan aims to remove a potential barrier to the widespread adoption of these technologies. This exemption recognizes the environmental benefits associated with renewable energy sources and encourages homeowners to invest in sustainable solutions without facing undue financial burdens.

Net Metering 

Michigan no longer provides a net metering program, a change that has impacted the financial appeal of going solar for many residents. Instead, homeowners who install solar systems can participate in the state’s Distributed Generation Program, which offers credits for excess electricity sent back to the grid. While these credits can still help solar owners save a moderate amount on their electricity bills, they are not as generous as those in states with stronger net metering policies. As a result, the financial benefits of solar energy in Michigan are not as immediately compelling, making it a less obvious choice compared to states with more robust solar incentives.

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
• The MI Healthy Solar for All (SFA) program is a comprehensive statewide initiative aimed at deploying residential rooftop and other solar projects to benefit low-income and disadvantaged households throughout Michigan. By tackling existing barriers, the program aims to enhance solar energy accessibility for eligible households. Through collaborative planning efforts, the state will establish specific criteria for financial and technical assistance tailored to best serve Michigan households, while leveraging complementary public and private funding sources to support residential rooftop installation, storage, and upgrades for homes in need. 
• The Midwest Tribal Energy Resources Association, Inc. (MTERA), along with coalition partners GRID Alternatives (GRID), the Alliance for Tribal Clean Energy (ATCE), and the Native CDFI Network (NCN), will implement Tribally-owned residential solar projects, including storage and essential upgrades, benefiting the 35 Tribes located in Michigan, Minnesota, and Wisconsin. Based in Wisconsin, the coalition will capitalize on the extensive expertise and experience of its members to develop a program that empowers Tribes and tribal energy advocates. It will offer technical assistance for project deployment to aid in planning and constructing residential solar projects on Tribal Lands in the Midwest, while also focusing on workforce development to bolster Tribal self-determination and self-sufficiency.
• Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings, and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification. 
• Based in Ohio, the Industrial Heartland Solar Coalition brings together 31 communities across eight states, spanning from the Midwest to the rustbelt. Led by Growth Opportunity Partners (Growth Opps), the coalition is committed to propelling a just and clean energy transition in America’s industrial heartland communities. Its Solar for All (SFA) program, centrally managed by Growth Opps, is locally guided and implemented by 18 coalition members. Through our SFA initiative, the coalition aims to deliver energy savings to households, reduce greenhouse gas emissions, and provide training through solar workforce development programs.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.