Michigan Solar Power Facts in 2022

Michigan Solar Program

With 170 sunny days a year, Michigan receives some 8.5% more sunlight than Germany, Europe’s leader in solar energy production. Solar panels in MI can produce more than enough solar power to satisfy this state’s electricity needs. Great geographical location and enough insulation mean that the solar panels stay cool and are very efficient year-round. 

Michigan is, unfortunately, one of the slow adopters of solar power systems. However, the Great Lake state seems to be focused more on wind energy, as it makes up around 60% of its total renewable energy systems. However, solar has seen a sharp increase in solar installations, as the majority of the 12,000 + installations are residential solar installations. 

Michigan Solar Energy Data

Michigan ranks 25th by the total solar capacity installed. By solar capacity, it falls right between Solar Panels in Illinois and solar panels in Idaho. With a total of 590.6 MW of total solar capacity installed, solar arrays in Michigan still produce significant amounts of electricity. This much solar power can supply as many as 93,000 Michigan households. 

With 215 solar companies working in the Great Lake state, it also creates a lot of solar jobs. 76 of these companies are solar manufacturers, producing solar panel mounting systems and complex solar panels. 82 of these companies are solar installers and 57 deal with other solar jobs. Every solar system installed is a joint effort of the three company tiers who work hard to provide you with renewable energy

Solar industry in Michigan has received over $780 million in solar investments. In the state of Michigan, there are over 12,000 solar installation projects. The majority of these are residential solar. Solar in Michigan is becoming progressively cheaper, so that the average cost of a 5 kW solar power system can cost as little as $13,400 – $18,200

Solar systems are also a great way to save money. The initial investment pays itself off within 7.5 to 10.5 years and all energy produced over this threshold means direct savings for you. An average Michigan resident can expect to save a total of $35,600 – $48,300 on their electric bill in their first 20 years of using Michigan solar power

This much money saved translates to 15% yearly ROI. This return on investment cannot be achieved even in the best stock market or ETF. It is also way higher than the measle <1% interest rate offered by many banks. Solar power in Michigan is the best investment that you can make. 

An average Michigan home can see a 5 kW system offset at least 75% + of their electric bill. Energy efficiency is the key here: the more energy efficient a home is, the greater the offset in their electric bill. Larger homes and homesteads will also need more electricity, but the beauty of any solar installation is that they can be customized to your particular needs. 

Michigan Solar Statistics

DescriptionStatus
Michigan National Ranking25th
Solar Panels Installed(MW)590.6 MW
Can Supply Power to: (No. of Homes)+93,000
% of State's Electricity from Solar0.45%
Solar Companies in the State215: 76 Manufacturers, 82 Installers and Developers, and 57 Others
Solar Jobs Created3,379
Total Solar Investment in the State$784 million
Out of Pocket Cost for a 5kWh system$13,400 – $18,200
Net 20-year savings$35,600 – $48,300
Average Payback Period7.5 - 10.5 years
Electricity Bill Offset for a 5kWh system+ 75%
Number of Solar Installations+ 12,270

Source: Michigan Solar | SEIA 

Notable Solar Installations in Michigan

The Great Lake state can boast their 12,000 + solar installations. However, solar power in this state is also produced by utility-scale solar projects. A part of consumers’ energy in Michigan is produced in: 

  1. Watervliet Solar Power. This solar plant has a total solar capacity of 4.6MW and is enough to power 692 Michigan homes. 
  2. Domino Farms Solar. The solar installation can satisfy the energy usage of over 150 Michigan homes. 
  3. Some notable retailers in Michigan have also decided to go solar, in part encouraged by their positive experience in other states. Among these retailers are IDEA, Ford and General Motors. 

There are other notable solar projects in Michigan that are being developed or negotiated with the local government: 

  1. 1,100 MW of solar power has been proposed as the solar quotes keep getting lower and almost every electric company wants to include more renewables into their energy plans. 
  2. Cypress Creek Renewables proposed 2,600MW of solar plants in Michigan. Only 584 MW got a licence to connect to the network by 2023. This would double the current Michigan solar capacity. 
  3. Consumers power has estimated that building additional 6,200 MW of solar capacity would be enough to satisfy the majority of energy needs by 2040. 

Encouraging green power and pushing for renewables is a great opportunity for both the environment and every utility company that decides to join the efforts. Utility companies and the consumers have the final say in how much renewable energy will be created and how many new solar projects will be undertaken. 

In any case, Michigan installed capacity will experience an upwards trend, especially as more homeowners decide to satisfy their home’s energy usage from renewable sources. A number of solutions, such as solar lease or solar PPAs are available for those that want to make the switch. 

Is it Worth it to Buy Solar Panels in Michigan?

Yes, it is worth it to buy solar panels in Michigan. Solar in Michigan is a great way to reduce your energy bill. Combined with a solar battery storage, it is also a way to energy independence and resilience against power outages. The cost of solar has never been this low, so going for solar now, with significant tax deduction programs (in the form of tax credits) brings down the cost per kilowatt hour of installed power. 

Average Cost of Solar Energy Systems

Solar panels cost less now than ever. The 2010-2020 decade has seen an 80% decrease in the price of solar panels. The past five years saw the average solar cost drop by 45%. All this means that solar panels are the best investment that you can make. 

An average homeowner can expect to pay as little as $3.12 per Watt of DC power installed. This means that a 10 kW solar system can cost around $31,200. This price includes the work of solar installers but is presented with no local solar incentives and federal tax credit. Even without these two solar rebates, solar systems have never been cheaper and the savings more attractive. 

Solar Panel Energy Production in Michigan

Solar Panel Energy Production in Michigan has been growing since the data started being tracked. Back in 2007, this state had a humble solar capacity of 0.4 MW of solar panels installed. As local solar companies grew, the solar capacity grew as well: in 200, the Michigan solar capacity was 6.5 times higher: 2.6 MW. 

From 2010 to 2015, the solar capacity grew to ~32.4MW and in the next five years to 290.7. Currently, Michigan has around 590 MW of total solar capacity installed. This number will go up, as the notions from the renewable portfolio standard have to be followed as well. 

Utility companies and residents want to invest more and rely more on renewable energy. Clean energy is the energy of the future and lower cost in comparison to other forms of energy production have already kicked one 1,100 MW natural gas power plant out of the planning offices. 

The average price of solar is now below that of natural gas, coal and oil and is likely to keep going down as new generations of solar panels are manufactured. Each new generation promises higher conversion efficiency and more excess energy to be stored for later use. Michigan still has a long way to go to reach the national average for renewable power, but the chances look bright. 

Michigan Solar Incentives, Rebates, and Tax Credits

There are not many Michigan Solar Incentives, Rebates, and Tax Credits, so being wise when deciding on your solar panels and solar installer pays off significantly. Getting at least three quotes is the way to go, as you can save up to 20% on the initial costs by simply browsing more. 

Furthermore, the system size needs to be optimised, as more panels do not necessarily translate into more power. The orientation of your solar panel installation and the geographic location are exactly what you need to focus on. Tax breaks on your solar PV are the second most important factor to consider, as these solar loans or a cash purchase comes with a higher price tag. 

Federal Solar Investment Tax Credit

The Federal Solar Investment Tax Credit offers tax breaks for those who would like to part with their electricity rates by installing a solar PV system. The federal ITC will then give back as much as 26% of your initial costs back. This generous offer is available through 2021 and 2022. 

In 2023, the tax credits drop down to 22% and from 2024 onwards they will not be available for residential solar projects any more. Large-scale projects, such as utility-scale solar PV can keep counting on 10% Federal ITC in 2024. Solar panel installation is likely to keep being one of the favorite investments in Michigan as the price of solar PV is expected to decline even further. 

The federal tax credit only makes sense if you make enough money to be eligible to pay federal taxes. The incentive can be taken as a means of taxes owed deduction or as a tax return if your employer deducts taxes from your paycheck. You can roll over the remaining tax credit or tax return for up to 10 years. 

Michigan Saves Home Energy Loan Program

This program allows you to take solar loans and other home efficiency and weatherization loans with an APR that ranges from 2.99% to 6.99%. The APR depends on your credit score and you can space out your payments anywhere from 12 months to 10 years. The low APR guarantees that you do not have to overpay for your solar efforts. 

Michigan Net Metering

Michigan Net Metering is a great way to save some serious cash. In this program, your electric company installs a smart meter on your house. The meter moves forward when you use electricity from the grid. You do this during nights and cloudy days, when there is not much sunlight and you use more energy than you can make. 

However, when there is plenty of solar power produced, such as on sunny days, you send the electricity back to the grid and the meter goes backwards. At the end of the month or year, you pay the net energy spent. This is a great way to justify solar cost without investing in a pricey solar battery storage

Michigan Property Tax Exemption 

Under the Michigan Property Tax Exemption, solar panels on your rooftop are not counted towards the property tax required payments. This means that any increase in the property value of your solar home will not result in higher taxes. 

Michigan Solar Rebates

There are no state-wide solar rebates in Michigan. However, you may be able to find rebates on your solar panels by contacting solar companies, such as your best solar installer or the municipality office. In general, solar installers know of any local rebates that are offered, such as LG’s $600 rebate for those who decide to purchase their equipment to lower their electric bill. The solar industry is full of such small rebates so do not shy away from asking. 

DescriptionEquivalent Cost
The Cost of PV - 10kWh at an average of $3.12 per Watt of Solar Installed$31,200
The Federal Solar Tax Credit @26% by the end of 2022$8,112
Net-Metering Savings per year$1,546.84
TOTAL system cost for a 10kWh home solar system at the end of year 1$21,541.16
Years before a 10kWh system pays off if all Michigan solar incentives are taken 12 years*

* – please bear in mind that a 10 kWh system may be best for a larger household with a higher energy consumption needs. In this case, for a household that consumes 1,500 kWh of electricity per month, the payoff period on a 10 kW system is 6.72 years. 

Top Solar Companies in Michigan

There are many solar companies installing solar panels in the Great Lake State. To find the best, we propose a list of top 10 solar installers in Michigan: 

  1. Strawberry Solar, Detroit
  2. Solar Chief, Ypsilanti
  3. Michigan Solar Solutions, Commerce 
  4. Sumpter Solar Services, Belleville
  5. YellowLite, multi-state
  6. POWERHOME Solar, multi-state
  7. Michigan Solar and Wind Solutions, Oakland County
  8. Windfree Solar, multi-state
  9. Altenergy, Comstock Park
  10. Agathon Solar, Hart

FAQs

Is it better to lease or buy solar?

It is always best to buy a solar panel system. Your electric company may offer you some lease options and you will enjoy a reduced electricity price for years to come, but owning solar panels makes that energy free. Most solar arrays pay themselves off within 10 years and all energy you use after that comes with a handsome price-tag of $0/kWh. 

What is the maximum temperature a solar panel can withstand?

Most solar panels are tested and certified to withstand temperatures of up to 185 degrees Fahrenheit. This does not mean that this is the maximum temperature they can withstand. They are, after all, designed to stay on a hot rooftop for over 20 years without degrading. 

What size inverter do I need to run a household refrigerator?

Most fridges use no more than 600 watts to run, but they also need three times that power to start their motor. This wattage is only needed for a fraction of the second. To run a fridge you would need an inverter that can produce 1,800 watts of surge power for a fraction of a second. 

What problems do solar panels cause?

There are no known issues that solar panels cause. Some people worry that their roofs may collapse under the weight of a solar array, but their weight is less than 5% of the roof’s bearing capacity. Large-scale solar arrays can cause issues with the environment, such as deforestation, so careful urbanistic planning and respect for the environment are needed. 

Conclusion

Michigan is one of the states in the USA that receives more sun per year than Germany. Considering this, it goes without saying that solar in MI has a lot of potential that should be tapped into at a faster pace. The price of a solar system has never been lower, so there is no excuse not to go for a green option. Contact your green energy provider to see what other green incentives they have for you. 

Significant federal and local incentives are enough to cover around 30% of the cost of a rooftop solar array, so going solar is the way to go for those who want to protect the environment and reduce their carbon footprint. Contact your local electric company and see what you can do today to offset your initial investment, part with fossil fuels and lower your energy bills. 

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