A good discount can make any purchase much better. Solar panels are no exception – you can save quite a bit by taking advantage of solar incentives in Michigan. And we’ll tell you how.
Key takeaways
- Michigan state offers several federal and local solar incentives, solar rebates and solar loans to help homeowners and companies with financing residential and business solar panel installation and saving on lower bills over time and increasing their energy efficiency.
- Michigan residents can benefit from a 30% federal tax credit on the total cost of their eligible solar panel system project including solar panels, inverter, energy storage and costs to install it.
- Investor-owned utilities and rural electric cooperatives offer net metering. Credits are valued at the full retail electricity price for systems 20kW or less, and avoided cost rate for larger systems. Credits roll over indefinitely. Utilities cannot apply discriminatory rates. Utilities with over 1 million customers must provide compatible meters. Application and interconnection review fees cannot exceed $100.
- RECs are earned for generating clean energy, regardless of selling electricity. RECs can be stored and sold through MIRECS. Potential annual income of $300-$1,000 for a 10kW system. Requires approval from the Michigan Public Service Commission. RECs expire after 3 years.
Save 30% of your PV system cost with Federal Solar Tax Credit
The US government wants more people to go solar: it’s a modern and green way of getting energy. This is why the Solar Investment Tax Credit (ITC) program was developed. It allows American citizens to claim 30% of the cost of their installation as an income tax deduction. The cost here is not only solar panels, but also shipping, installation expenses and more. For example, if your system overall made you spend $10,000, the government returns you $3,000. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.
Sell excess electricity with net metering program
Solar laws in Michigan make net metering programs available to customers of investor-owned utilities and rural electric cooperatives. The program gives households an opportunity to send any excess electricity back to the grid instead of storing it with batteries.
When you sell your solar power to the utility, you receive credits that can be used to offset your next bills. In Michigan, their value is equal to full retail electricity price for the systems with a capacity of 20kW or less. Avoided cost rate is used for larger systems. The credits may be rolled over indefinitely, the companies neither retire nor purchase them.
Also, the utilities may not apply discriminatory rates to net metering customers. In Michigan, companies serving more than 1 million customers are required to supply a compatible meter if requested by a client. Application and interconnection review fees may not exceed $100.
Save up to $1,000 a year trading RECs
Renewable Energy Credits are certificates granted to any person or entity upon generation of each Megawatt-hour of clean electricity. Unlike with net metering, you don’t need to sell any electricity to get credits. The value of RECs is always changing, which makes them similar to stock market assets. Based on the available data, selling RECs could mean anywhere from $300 to $1,000 annually for a 10kW solar system.
To participate, you have to apply for approval from the Michigan Public Service Commission. After that, you can create a REC account with the Michigan Renewable Energy Certification System (MIRECS) to begin tracking and selling your credits. Keep in mind that in Michigan RECs have a lifetime of only three years.
Raise your property value but not your taxes
4%
– this is how much solar panels increase the value of your house
In November 2019, Michigan established a property tax exemption for renewable energy systems. To qualify for the exemption, systems must be no larger than 150 kW in capacity and must offset all or a portion of the energy used on the property.
Save with Michigan Saves – Home Energy Loan Program
Michigan Saves financing is financial capital made available to customers through a network of lenders that offer favorable terms based on a negotiated contract. Homeowners make the upgrades with the help of authorized contractors through an authorized lending partner. Homeowners are eligible for rates ranging from 4.44% to 7.90% APR, though most customers finance at 5.50% APR. Terms are available up to 15 years with loan amounts ranging from $1,000 to $50,000.
What are solar incentives, and why do they exist?
Solar incentives are essentially financial tools, like discounts or cash-back offers, provided by governments to make installing solar panels on homes and businesses more affordable. They exist because governments recognize the importance of transitioning to clean energy and understand that the initial cost of solar systems can be a significant obstacle.
To overcome this, various forms of financial assistance are offered. One common type is the tax credit, which allows individuals and businesses to deduct a portion of the solar system's cost directly from their tax liability, effectively reducing the amount owed. In some cases, if the credit exceeds the tax owed, a refund may be issued.
Another prevalent incentive is the rebate, which is a cash refund received after the solar system is installed, either as a direct payment or a reduction in the system's purchase price. Additionally, feed-in tariffs enable solar system owners to sell surplus electricity generated back to the grid, creating a revenue stream.
Governments offer these incentives for several reasons. Primarily, they aim to reduce pollution and promote environmental sustainability by decreasing reliance on fossil fuels. Furthermore, the solar industry stimulates economic growth by creating jobs in manufacturing, installation, and maintenance. Increased solar adoption also enhances energy security by reducing dependence on imported fossil fuels. Finally, reduced pollution contributes to improved air quality and public health.
For homeowners and businesses, solar incentives translate to reduced upfront costs, lower electricity bills, and the potential to generate income through feed-in tariffs. Essentially, these incentives make solar energy more financially accessible, encouraging its widespread adoption and contributing to a cleaner, more sustainable energy future.
Is it the right time to go solar?
Tired of those ever-increasing electricity bills? It feels like you're constantly paying more for the same amount of power. Solar panels offer a way to break free from that cycle. The cost of these panels has dropped significantly, making them much more affordable. It's like finding a sale on something you really need.
Essentially, you're creating your own personal power source on your roof. It's a source that taps into sunlight, a resource that's abundant and free. And these solar panels are becoming more efficient, meaning they capture more of that sunlight and turn it into usable electricity.
Now, what happens when the sun isn't shining? That's where battery storage comes in. Think of these batteries as reserves of energy, ready to be used when you need them. And these batteries are getting better at storing power, so you can rely on them even during cloudy days or at night.
By switching to solar, you're making a choice that's good for the environment. You're reducing your reliance on fossil fuels, which helps to keep our air cleaner. It's a way to contribute to a healthier planet without making drastic changes to your daily life.
And here's another benefit: solar panels can increase the value of your home. It's like adding a desirable feature that potential buyers will appreciate. So, if you ever decide to sell your house, it could be worth more.
There's also a sense of independence that comes with generating your own electricity. You're less dependent on the power company, which can be reassuring, especially during power outages. With a solar system and battery backup, you might still have lights and power when others don't.
And don't worry if you don't live in a super-sunny area. Solar panels are designed to work in various climates. They can still generate electricity even on cloudy days.
In a nutshell, going solar is like making a smart investment. You're saving money on your electricity bills, helping to protect the environment, and increasing the value of your home. It's a practical and beneficial choice.
Check out solar panels near you!
Looking to build a home solar system? Check out solar panels that we have for sale in Michigan
SHOP SOLAR PANELSYears of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.
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