Michigan leans on two tax exemptions instead of a state credit
No state credit, but two solid tax exemptions
Michigan does not offer a state income tax credit for solar. It does exempt solar equipment from its 6% state sales tax, and separately, per the Michigan Department of Treasury and State Tax Commission's own bulletin, Public Acts 116 and 117 of 2019 exclude solar panels and other alternative energy systems on residential real property from being counted toward an increase in true cash value during a tax assessment, for systems up to 150 kW, which covers essentially every home installation. In plain terms, your home's market value can rise because of the system, but that increase isn't factored into your property tax assessment, so your tax bill doesn't rise because of it. This exclusion holds until the property is sold. A separate exemption under Public Act 118 of 2019 covers larger, business-owned alternative energy personal property under different terms. Use the property tax exemption savings calculator for a general projection.
Distributed Generation replaced net metering, with a size threshold
Public Act 235, signed into law November 10, 2023, established the Distributed Generation program as Michigan's current framework for crediting exported solar power, though its DG provisions didn't formally take effect until February 27, 2024, and each utility's actual revised tariffs implementing it weren't approved by the Michigan Public Service Commission until March 13, 2025. For residential systems 20 kW or smaller, which covers nearly every home installation, excess power is credited at the full retail electricity rate and carries forward month to month, essentially spinning your meter backward. Systems between 20 kW and 550 kW receive a lower avoided cost rate instead. The 2023 reform also expanded the program's statewide cap from 1% to 10% of utility peak load, broadening access considerably compared to the older, more constrained system. Compare against the Indiana incentive estimator to see how a neighboring state's rules stack up.
DTE and Consumers Energy layer on their own programs
Beyond the standard Distributed Generation credits, DTE Energy offers a Solar Currents program and Consumers Energy offers SolarCurrents, both structured as roughly 10-year performance-based incentive contracts paying per kilowatt-hour produced, on top of and separate from your regular net metering or DG bill credits. These represent genuine additional income on top of the DG structure, though specific rates and enrollment availability change periodically, so confirm current terms directly with whichever utility serves you.
Rising electricity rates make the case stronger every year
DTE Energy and Consumers Energy have both implemented significant rate increases heading into 2026, with residential rates reaching 17 to 20 cents per kWh in many service territories. That upward trend makes solar's fixed-cost production increasingly attractive for long-term budget stability, independent of any single incentive. Check your federal ITC status as well, since federal rules changed considerably for 2026.
If you borrow for the rest of the system, the combined loan and rebate timing tool takes your rebate total and works out the monthly payment on the balance.