The state of Michigan offers residential and commercial owners a buy-back tariff option for solar panel installations (PV) that generate electricity.
A fixed rate agreement must be signed for up to 12 years and subsequent system access charges may be charged ($6-$50) during that time period, which constitutes metering costs.
Residential systems must be from 1 kW to 20 kW in size and Commercial solar installations must be from 20 kW to 150 kW in size to be eligible.
In 2002, the state of Michigan devised a personal property tax exemption program set to promote the development and manufacturing of alternative energies. Alternative energies are 100% exempt of property tax equivalent to the added value that the system instills on the property.
This exclusion exempts 100% of energy conservation subsidies that come from public utilities. The price of buying/installing any energy conservation measure by a resident of Michigan (e.g. PV, solar water heat or solar space heat) will not be incurred as an expense in the resident’s gross income. If a customer is from an electrical utility company and participates in the utitlity’s energy conservation program, they may be eligible to receive a reduced rate on electricity furnishing or a nonrefundable credit towards the cost of that electrical unit every month on the electricity bill
In this federally created loan program, Michigan residents may use EEM (energy-efficient mortgages) as financing towards renewable energy systems in a house.
Residents with renewable energy equipment are able to receive net metering on wind, geothermal, biomass, solar or hydroelectrical power. Net metering has the ability to calculate the flow of electricity in two directions. This offer is only available to alternative electric suppliers or rate-regulated utilities. A resident receives a credit of the net excess generated at the utitlites price rate if the system is 20KW or less. In order to receive this offer, systems must meet all qualifying criteria set out by the state.
Michigan residents and customers of a number of WPPI Energy utilities that have installed a renewable energy system at their house, may be able to receive reimbursement on their solar system. A $30/sq foot rebate is available for owners of solar thermal systems or solar water heating systems. There is a $3,500 or 35% of the total cost limit on the rebate (whichever number is less). If electricity produces more than 50% of the heat from a solar thermal heating system, the rebate is not applicable. Additionally, a Michigan resident can receive a rebate of $3/KWH on a PV system that goes up to 20 KW and has been installed onto a new construction. If the PV system is installed by a NABCEP certified installer onto a pre-existing structure, Michigan residents may receive up to $2.50/KWH. If the system isn’t installed by a NABCEP certified installer, the rebate drops to $2/KWH. Michigan residents are able to receive a 25% rebate for for a small wind energy system that produces a maximum of 20 KW. This rebate has a limit of $10,000 in reimbursement. For the owners of wind energy, solar water, solar heating or solar water systems, there is a 50% reimbursement for the price of service and repairs on their system.
Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential solar-electric systems, solar thermal systems, fuel cells and labor expenses. Residential wind energy installations and geothermal pumps are also subject to a tax exemption.
With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.
Average Electric Bill: $250/mo
Projected Annual Bill Escalation: 5%
Cost Per Watt: $6.50
- Estimated System Cost: $26,000
- Federal/State Tax Credit: $7,800
- State/Utility Rebate: $0
- Net Cost: $18,200
- Cumulative Lifetime Savings (25 Years): $25,063
- Investment Return: 5.0%
Savings of 30% on the total cost of your solar system through incentives