This Labor Day 2025, many Michigan homeowners are asking: is solar worth it? Explore current solar costs, financing options, the good, the bad, and the future outlook for clean energy in Michigan.
Average Cost of Solar in Michigan Today
As of Labor Day weekend 2025, the average installed cost of solar in Michigan is about $3.10 per watt. A 5 kW system costs around $15,500 before incentives, with a typical range of $13,000 to $18,000 depending on equipment and installer.
With the 30% federal solar tax credit still active through December 31, 2025, that same system drops to around $10,800. In Detroit, a typical 6.3 kW residential installation costs between $11,600 and $19,500 after incentives, saving about $92 per month and paying for itself in roughly 10–11 years.
Should You Finance Solar in Michigan?
Many homeowners look to financing to reduce upfront costs. Here’s the breakdown:
- Why Financing Can Be Worth It
Financing spreads payments over time, often leaving monthly costs close to or lower than current utility bills. It also allows homeowners to capture the federal tax credit immediately without having to pay the full system price up front. - Why Financing Can Be Risky
Loan terms can add significant interest costs, stretching payback time by several years. In some cases, financed solar systems save less over their lifetime than systems paid in cash. For households that may sell their homes in under ten years, financing may not yield the full return.
Key Insight: Cash purchases deliver the strongest lifetime savings, while financing offers accessibility but reduces net ROI.
The Good
- Payback and ROI: Solar systems in Michigan typically pay for themselves in 9 to 12 years, with lifetime savings averaging $30,000+.
- Energy Cost Protection: Michigan electricity rates are among the highest in the Midwest, nearing 20¢/kWh and expected to rise. Solar locks in predictable costs.
- Incentives: Federal tax credit, Michigan’s sales tax exemption, property tax exemption, and utility programs increase affordability.
The Bad
- High Upfront Costs: Even after incentives, systems cost $10,000 to $15,000, which is a barrier for many households.
- Net Metering Changes: Michigan phased out traditional net metering in 2018, replacing it with less favorable crediting for excess solar generation.
- Tax Credit Deadline: The 30% federal incentive expires at the end of 2025, creating urgency for homeowners considering installation.
The Future Outlook
- Near Grid Parity: The cost of solar electricity is approaching parity with Michigan’s grid power, making solar viable even without subsidies.
- Policy Watch: Federal and state-level changes could reshape incentives, so 2025 may be the last year of optimal savings.
- Michigan’s Growth: Solar capacity in the state has surpassed 1,400 MW, up dramatically in less than a decade. Expect dual-use projects, such as agrivoltaics, to become part of the conversation around land and energy use.
Conclusion
So, is solar worth it in Michigan this Labor Day 2025? For most homeowners with long-term plans, yes… solar delivers significant lifetime savings, hedges against rising utility costs, and benefits from still-active federal incentives. The main barriers are upfront costs, financing risks, and policy uncertainty after 2025.
Homeowners who act this year can lock in the strongest benefits before incentives expire, making 2025 a pivotal year for Michigan solar.
