Michigan has over 200 companies in the solar energy market. With the industry in the Great Lakes State massively expanding, it’s a wonder that homeowners have little access to benefits.
Still, there are ways to save money on solar panels in Michigan if you know where to look. Read on for a detailed breakdown of the state’s existing opportunities.
How to Save Money on Solar Panels in Michigan: Overview
Homeowners in Michigan benefit from a decent price on solar equipment and adequate sunlight. Because of high electricity rates, homeowners can discover savings of as much as $20,000 or more. However, this is where the benefits end; the Great Lakes State offers few renewable incentives, and those that exist are diminishing.
However, there are still ways to save money on solar panels in Michigan. By looking for incentives in the form of federal returns, state rebates, and government regulations, homeowners can lower the cost of an installation. Let’s go into further detail below.
Solar Panels in Michigan: Federal Incentive
The most influential benefit available to Michiganders is the federal solar tax credit. This program offers a 30% return on all solar purchases including equipment, labor, and taxes. Those using this benefit can see returns of more than $5,000.
The program has a few prerequisites. Of these, it’s most important to know that the resident must own their array. This means that leasing programs disqualify solar panel systems from the federal return. Additionally, homeowners must live at the place where the array is installed, and all equipment must be new.
Michigan’s State Credits and Rebates
Some of the best incentives that states can offer come in the form of financial incentives. Whether it’s tax credits or equipment rebates, homeowners can find benefits to help pay off their new system. Unfortunately, Michigan does not offer these incentives.
However, some cities in the Great Lakes State have their own agendas. For example, residents of Lansing can receive a $500/kW rebate for their solar array up to 4kW. This could reduce the cost of a solar panel system by up to $2,000 in addition to the federal credit.
Generally, states have a form of net metering and interconnectivity. These mandates require utility companies to pay homeowners for excess solar energy when connected to the grid. Michigan has net metering laws, but they’ve recently been altered. In 2019, the Michigan Public Service Commission opted to reduce the retail rate by the amount of transmission costs. This lowers the average payout by about half the original retail rate.
Solar Panels in Michigan: Government Regulations
One of the primary reasons Michigan has few state-level benefits is that it lets its renewable portfolio standards (RPS) expire. These regulations help us determine how dedicated the state is to the infrastructure of renewable energy. Because Michigan hasn’t updated its RPS since 2015, there’s little chance that the legislature will enact new incentives.
Unique to the Great Lakes State, however, many cities have their own RPS, and they’re pretty aggressive. For example, Grand Rapids has a renewable goal of 100% energy production by 2025. Therefore, homeowners in this city might find more benefits in the coming years. Other cities in Michigan with an RPS include Ann Arbor and Lansing.
As a small victory for Michiganders, the Great Lakes State does offer a property tax exemption. In 2019, the state’s governor reinstated the old policy, ensuring that an increased value on homes with solar panels won’t incur a raise in taxes. This will save homeowners thousands of dollars over the course of 20 to 25 years.
Should Michiganders Lease Solar?
In some states, residents can choose to lease a solar panel system from an installation company. While this disqualifies them from many incentives, including the federal return, it does act as an affordable choice to help improve carbon footprints.
Michigan is one state that allows for solar leasing, although it’s not recommended to those hoping to save money on utilities. After paying the monthly lease, homeowners end up paying about the same amount as they would for traditional electricity.
Solar Panels in Michigan: Incentive Summary
|Federal Tax Incentive
|Michigan Tax Credits / Rebates
|None / city-level rebates
|Retail rate minus transmission fees
|Renewable Portfolio Standard
|15% by 2020 (expired)
|Property Tax Exemption
|Sales Tax Exemption
|Performance Payment Program
How to Save Money on Solar Panels in Michigan: Further Reading
While the Great Lakes State doesn’t offer many benefits for renewable energy, homeowners can still find incentives in some cities. Even with just the federal return, residents can save money with solar panels in Michigan. For more information on the state’s views on emerging technology, check out these articles below.
How to Save Money on Solar Panels in Massachusetts – Here’s how Michigan’s solar benefits compare to one of the best states for renewable energy.
Owning an EV in Michigan: Charging Cost, Incentives, and More – Although the Great Lakes State doesn’t offer much for solar, there’s much more available for those with electric vehicles.
Top 10 Internet Providers in Michigan – Wherever you are in Michigan, these internet providers can make sure you stay connected when you need it.
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