Is solar worth it in Michigan in 2026?

How Michigan pays for your solar power

Net billing (exports credited below retail). Michigan's Distributed Generation program bills inflow at full retail and credits outflow at the power supply rate minus transmission; it replaced net metering in 2019 (DTE) and 2021 (Consumers).

In the calculator, 40% of your solar output is used at home at the retail price and the rest is exported at about 45% of retail, so each solar kWh is worth 67% of the retail price on average. Change it if your utility pays more or less. Method

How exports are credited

Michigan replaced net metering with the Distributed Generation (DG) program under 2016 PA 342. The Michigan Public Service Commission (MPSC) set up an inflow/outflow system. Inflow, the power a home pulls from the grid, is billed at the full retail rate. Outflow, the power a home sends to the grid, is credited at the power supply part of the rate minus transmission charges. Under the old net metering, exports were credited at full retail. Inflow and outflow are measured separately, not netted over the month, so solar used in the home at the moment it is produced is worth more than solar exported.

DTE Electric’s program (Rider 18) took effect on May 9, 2019 after the MPSC’s order in Case U-20162. At the time the standard residential outflow credit was 7.477 cents per kWh for the first 17 kWh per day. DTE’s own letter to solar customers says outflow is credited at the power supply rate including the Power Supply Cost Recovery factor, and the current credits by rate schedule are in its rate book (sheets D-115.00 and D-116.00). DTE updates the D1 outflow credit in its rate cases, so check Rider 18 for the current figure before relying on a number.

Consumers Energy’s program has run since January 1, 2021. Its tariff, effective May 1, 2026 (MPSC Case U-21870), lists residential outflow credits plus the PSCR factor: on the standard residential Rate RSP, 8.2996 cents per kWh of outflow from October through May, and 15.1904 cents for on-peak and 10.3970 cents for off-peak outflow from June through September. Time-of-use residential rates have their own credits.

Credits are applied to the current bill and any excess carries forward to later billing periods. DTE’s rider limits what credits can offset to power supply charges, and Consumers excludes securitization charges. Consumers’ tariff says unused credit may be paid by check at the company’s discretion.

Customers who enrolled in net metering before the DG program started keep those terms for 10 years from enrollment, and can move to the DG tariff when that period ends.

State incentives in 2026

Michigan does not offer a state income tax credit or a statewide cash rebate for residential solar. Some websites list a property tax exemption, a sales tax exemption, utility production incentives and Michigan Saves loans; those were not verified here, so check the Michigan Department of Treasury and your utility directly. The federal 30% residential credit ended for systems installed after December 31, 2025.

What it means for payback

Since exports earn well under the retail price, the share of production used on site drives the economics. Daytime use, time-of-use rate choices and a battery can raise the value of each kWh. Time-of-use outflow credits are higher in summer on-peak hours than in the off-peak or winter periods, so the rate plan matters. A system sized to the home’s annual use, rather than larger, avoids exporting a lot at the lower credit.

Other rules worth knowing

State law (MCL 460.1173, amended by 2023 PA 235, effective February 27, 2024) limits each customer to generation capacity designed to meet up to 110% of the prior 12 months of use. It lets a utility cap the DG program at 10% of its average in-state peak load, with at least half reserved for systems of 20 kW or less. Older DTE tariff text refers to a lower 1% cap; ask the utility whether capacity is open. Municipal utilities and electric cooperatives may run their own programs.

Berkeley Lab does not publish a Michigan median from enough systems, so the calculator starts from the U.S. median of $3.60/W. Put your own quote in.