How Much Does A Solar Panel Installation Typically Cost In Michigan
Solar panel installation is currently on the rise and rightfully so. With climate change affecting our world right now, it is imperative that everyone exert some effort in trying to save our planet and making use of solar energy is one of the best ways to achieve that goal.
This is especially true for the state of Michigan because the state has its own share of natural wonders which primarily consist of 11,000 inland lakes and, of course, people there want to protect and preserve them.
Luckily, the government of Michigan has done its best to use solar energy in upholding its objective of protecting nature. In fact, the state has actually been able to maintain its place as a leader in solar energy which is an impressive feat considering that it is a cold and snowy state by nature.
So, if you live in Michigan and youre interested in investing in a solar panel installation for your home, youre in luck. But before you make a decision, it is important that you know some facts about solar installation costs in Michigan first.
What Additional Variables Influence The Cost Of Residential Solar Panels
Solar expenses involve installation and equipment they also include permits, inspections, and installer profitability.
These many features are what cause solar prices to vary across installations. Several variables influence the cost of solar energy system installation for particular houses, including the following:
How Much Do Solar Panel Installations Cost In Michigan
Broadly speaking, the average cost of a solar panel installation in Michigan ranges from $13,472 to $18,228. On a cost per watt basis, the cost can range between $2.69 and $3.65. According to Energy Sage, as of September 2020, the average solar panel cost in Michigan is $3.17/W.
However, with that said, you should take note that the estimated costs mentioned above dont include the 26% Federal Investment Tax Credit or other local incentives. The moment ITC and the other incentives are accounted for, the net price that youll have to pay for solar can actually fall by thousands of dollars.
To give you an even better look at the ballpark of solar panel installation costs in Michigan, here is a table of the estimated average solar panel cost by system size in Michigan.
Recommended Reading: What’s The Best Way To Clean Solar Panels
Additional Considerations For Michigan
Michigan has no solar carve-out. A solar carve-out is a guarantee that at least some portion of the energy generated will come from solar. With an RPS in place, there is no mechanism to enforce or plan a solar carve-out.
There are no solar rebates in Michigan. With the expiration of the RPS, there has been no legislation to encourage solar energy. States with rebate programs have seen dramatic increases in residential solar participation.
There are no state tax credits to encourage participation in Michigan. State tax credits are a win for both the state and the consumer. For the state, there is no out-of-pocket cost, and for the consumer, there is an incentive to participate.
Michigan has no property tax exemption for the value of home solar systems. Since 2013, you are taxed for the increased property value of adding solar to your home. Not exempting solar discourages participation.
Michigan has no sales tax exemption for solar. Many states exempt home solar from state sales tax, further reducing the actual cost of the system. Michigan charges state tax on solar. This is a very easy, inexpensive change that would greatly increase participation.
How Does The Cost Of Solar Power Compare To The Electricity Rates Charged By Dte
Levelized cost of power from this typical solar system installed on a home in Michigan over 25 years is 6.9 cents/kWh.
Average cost of utility power over 25 years is 26.9 cents/kWh. This shows that solar is a far cheaper way to power your home in Michigan over the long term. The way we calculate the average cost of utility power is by assuming the current DTE electric rates will grow each year at a compound rate of 3.5%. Actual inflation may be higher or lower than this but either way this analysis shows that solar is a clearly better choice.
You May Like: How Much Does A Solar Roof Cost
Leasing Option For Solar Panels
Solar leasing is a great way to go solar if you are short of cash or if you dont have the ability to take a loan. As you can see above, the immediate returns are not as impressive, but due to the relatively high Missouri energy costs and the normal energy cost inflation, your savings multiply year after year!
With solar leasing, you generally have two distinct options.
With standard leasing, you basically pay a rental payment for a solar roof system. The system is installed and maintained by the solar company on your roof. Depending on the amount of sun you get, the lease payment plus the new, lower electric bill should be less than what you are currently paying.
With a Power Purchase Agreement , you agree to allow a company to install home solar on your roof. You then purchase the energy your panels produce at a substantial discount to your current residential electric rates. As with a lease, the company maintains the system and assumes all risk. You just collect the savings.
Keep in mind that with a lease, you do not get the residual value of the system to your property, as you do not own it. You also do not receive any of the tax credits or other benefits of home solar ownership, other than lower energy costs.
Michigans Renewable Portfolio Standard Guidelines
Michigans RPS took effect in 2008, with a goal of generating 10% of their power with renewable energy by 2015. They have met this goal, but the RPS has run out, and there is no new plan in place.
How Is The Cost Of Solar Panels For Homes In Michigan Offset By Solar Tax Credits
The cost of installation of renewable energy systems in Michigan is supported by the federal solar investment tax credit.
The amount of this tax credit is currently 30% of the value of the solar system and it is claimed on your taxes in the year after installation.
Many people mistakenly refer to this tax credit as the Michigan solar tax credit but it is actually a federal tax credit.
Michigan itself does not offer a solar tax credit.
Solar panel cost calculator
Read Also: How Much Is 1 Solar Panel Cost
Local Solar Rebates In Michigan
Finally, there are some local rebates provided by the State of Michigan to incentivize residents to go solar.
First, the state offers a property tax exemption. Solar panel installation raises the value of your home, provided you buy or finance the system. Normally, an increase in home value would affect the assessed value and, consequently, your property taxes. To reduce the effective cost of installing solar, the state refuses to tax any added home value from your solar system, potentially saving you thousands or tens of thousands of dollars over time.
Second, the Michigan Saves Home Energy Loan Program is an organization that negotiates loan terms and APR to secure affordable financing for customers in Michigan. Provided you opt for an approved installer within the programs network, you could save hundreds or thousands of dollars in financing costs by getting a lower APR through the program.
Third, the Michigan Local PACE program is another that helps secure affordable financing for Michigan residents for photovoltaic equipment. It allows you to pay off a low-APR loan via special assessments on your tax bills, making renewable energy more accessible for everyone.
For more information about additional incentives, you can check the Database of State Incentives for Renewables & Efficiency website before you commit to going solar.
Is It Better To Lease Or Buy Solar Panels In Michigan Center
Leasing solar panels can be an option if you can’t pay upfront or secure a solar loan, but since you don’t own the system, you can’t take advantage of many solar incentives. Also your property value won’t increase, so you’ll have less savings over time. If you can afford to buy a solar system upfront, then buying is the better option if you want the most bang for your buck from going solar.
Read Also: How To Remove Solar Panels
Is There Net Metering In Michigan
The net metering policy is another strong point that favors solar power in Michigan:
– cElectric utilities are required to monitor your energy production and consumption, and give you credit for any surplus at the full retail price.
– redits never expire, so you can accumulate them over several months and use them later. For example, you can take advantage of the extra sunlight in summer to accumulate credits for the winter!
However, keep in mind that you get credits, not cash or a check!
This means that you cant oversize your PV system with the goal of always having an energy surplus and billing your electric company.
If you want to meet all of your energy needs with solar power, your PV system must be sized just right but not over-sized or the utility will be getting free energy to sell to other customers from your investment!
The interconnection policy in Michigan is also favorable for homeowners: electric utility companies cant force you to pay extra insurance fees, and they cant charge you more than $100 for the entire application and reviewing process.
Two Michigan Financing Options For Solar Pv System And Installation
You can apply for a Home Equity Line Of Credit as a low-interest loan for a solar PV system and its installation in Michigan. The advantage of this option is that you can get a tax credit because you are the system owner.
The second option is to use a solar PV system from a third party. You have the option of choosing a Power Purchase Agreement or a solar lease. The tax credit on this option proceeds to the company leasing you the system.
Recommended Reading: How To Switch From Sole Proprietor To S Corp
How To Save On Solar Panels
Since the model of solar panels and the installation company you choose greatly impacts your costs and your system’s efficiency, production, and durability, it’s important to pick the right ones for you. Here are some things to keep in mind to help with your decision:
- Reputation: Make sure your solar installer has a good reputation by verifying it has certifications and licenses, checking its work history and reading reviews by past customers and solar experts like EcoWatch.
- Contract: When looking through your solar installer’s contract, ask for clarification about any terms you’re not sure of and make sure you understand what happens in scenarios like a system component breaking or the company going out of business.
- Installation Process: Homeowners should understand how exactly the installation process will go, as well as important factors like the project completion timeline.
- Solar Panel Brands: Each solar panel brand and model offers varying levels of quality, longevity and efficiency. They will come at different prices as well. The company you choose affects which solar panel brands you have access to.
Refundable Payroll Tax Credit
The refundable payroll tax credit is for businesses that meet specific requirements for alternative energy. Payroll taxes can be considerably reduced for businesses that take these green energy initiatives, saving thousands of dollars annually.
With this refundable payroll tax credit, you will multiply the payroll amount attributable to qualified employees by the income tax rate for that year. A qualified accountant can help with these programs, but it takes time and attention to detail to set this up.
Don’t Miss: What Is The Tax Credit For Solar
Why Solar Panel Cost Should Not Be Your Only Consideration When Buying Solar Panels For Your Home
The most important difference between buying solar panels and any other purchase is that solar panels last 25-30 years. This is a long, long time and you will need customer service over all that time. The reviews below of the two largest corporate solar installation companies indicate larger corporate solar companies are not delivering this support to their customers.
We recommend you find a small or mid-size, local, family-owned solar company. These companies tend to care more about you and your specific job. You don’t want to be on hold to a corporation’s call center for the next 25 years!
People also ask:
Additional Considerations And Costs In Michigan
Michigan residents should also consider some of the below more minor aspects of installing solar panels, as these can affect your overall experience as well.
- Permits: Acquiring a building permit for your solar panel system is a requirement in Michigan before any work is completed. You should check with your installer if it will be pulling permits, which is standard practice but not universal.
- Interconnection: In order to connect your system to the grid in Michigan, youll need permission from your electricity provider in whats called an interconnection agreement. These agreements can come with fees for the services of your utility and range from $25-$500 depending on your area.
- Warranties: Solar warranties can guarantee the performance of your panels, the durability of your system and the quality of the installation. Some of the best warranties cover all three, plus roof leaks caused by roof penetration. Sometimes, extended warranties have to be purchased separately, so keep that in mind when you choose your brand.
- HOAs: Unfortunately, Michigan is one of the few states that doesnt have solar rights and easement laws in place. As such, you will need to get permission from your HOA if you have one before installing solar panels.
- Environmental zoning: The zoning laws in Michigan rarely restrict rooftop solar installations, but you could run into issues if youre looking to install ground-mounted panels. You should check with your local building department for guidance.
Recommended Reading: How Much Does A Sunpower Solar Panel Cost
Michigan Solar Installation Company
Many aspiring solar customers dont realize that the cost of their solar system depends on their installer, even if they choose specific equipment and brands beforehand. Each company will have its own installation fees and equipment charges, so identical systems can cost different amounts depending on the company.
Its important to assess installers based on more than just cost, though, as not every installer provides access to the same equipment. For example, The Green Panel, a local solar installer in Michigan, installs panels made by affordable manufacturers like Panasonic and Tesla, so the average price from this vendor may be relatively low.
SunPower, a national company that serves Michigan, only installs high-quality Maxeon panels. These are more costly than most options from local companies, so the average vendor price will be higher. However, the overall quality is also more appealing, as is the warranty, efficiency and appearance of the panels.
Compare Solar Installation Costs And Find The Best Solar Energy Companies In Grand Rapids Mi
Below is a list of solar companies in Grand Rapids, MI. Reach out to them for quotes, or request pricing from up to four solar companies to compare your options.
POWERHOME SOLAR4652 Danvers Dr SE, Grand Rapids, MI 49512
Mid-America Solar, LLC1971 E Beltline Ave NE, Grand Rapids, MI 49525
Tiger Solar848 W River Center Dr NE STE B, Comstock Park, MI 49321
Quality Solar529 32nd St SE, Grand Rapids, MI 49548
Passive solar techniques make homes more comfortable by harnessing the power of our planets natural resources. Passive systems are made up primarily of materials with favorable thermal mass or light dispersing properties, which store heat from winter nights inside them so it can be released during warm days later on this is why south walls often have dark-colored adobe bricks. There youll also find louvers layered over long grasses growing against them these allow air circulation without removing too much moisture while allowing sunlight through at just enough time each day.
The sun is a powerful source of electricity. Solar energy has been cheaper than fossil fuels since 2021, and itll only get more affordable as time goes on.
Map of Service Area:
Recommended Reading: How Much Does A Solar System Cost
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 brings down the cost per kilowatt hour of installed power.
Net Metering In Michigan
Net metering is a policy that incentivizes homeowners to convert to solar energy by increasing the chances of eliminating electric bills. Solar panels will almost never produce enough energy to disconnect entirely from the grid unless you have an off-grid system designed with plenty of battery storage. As such, most residential solar customers are tied to the grid via interconnection.
When your panels dont produce the energy your home needs, as would be the case at night or when its extra cloudy, you can pull energy from the local power grid. When your panels produce more than youre using, as would be the case on a bright, sunny day, you can send the excess back to the grid. Through net metering, you can receive credits for your extra energy from your utility provider, and these can be used to offset your future electric bills.
Net metering is not mandated by the Michigan Public Service Commission, but many public utilities still offer it to customers. However, the ones that do have net metering programs typically buy energy back at an electricity rate that is below retail value, which is still good but less beneficial than full-retail rates. Some companies adopted a new in-flow/out-flow billing plan in 2016 that is still somewhat beneficial but not nearly as good as a net metering policy at retail energy costs.
Also Check: Do Solar Panels Have To Go On The Roof
