State analysis · source documents checked 2026-09-24
Solar payback in Michigan (MI) — 2026
Michigan's DTE and Consumers tariffs bill grid electricity at the retail rate and credit exported electricity at a lower, rate-specific outflow rate; a retail-valued payback is an optimistic comparison, not a ceiling on years.
What decides the answer in Michigan
Michigan's rate-regulated utilities use inflow/outflow billing, which MPSC Staff proposed in February 2018 as a “new approach to billing DG customers called the Inflow/Outflow billing mechanism”. Electricity taken from the grid (inflow) is billed at the customer's retail rate. Electricity sent back (outflow) earns a separate credit that MPSC's January 2020 brief describes as “generally equal to the power supply component of the retail rate”. MPSC's 2019 DTE brief described DTE's credit as power supply “minus transmission charges”. DTE's current Rider 18 sheet lists the credits without saying whether transmission is included, while Consumers' current sheet bases its credit on power supply rates “which include transmission costs”. DTE's credit “shall not offset any delivery charges or other surcharges”; Consumers' offsets eligible charges but not securitization charges. Both carry unused credit forward to later bills. [8] [7] [5] [1] [2]
The current credit lines come from the rate books MPSC posts (retrieved September 24, 2026). DTE Rider 18, Sheet D-115.00 (effective February 6, 2025, Case U-21534), credits residential D1 outflow at 8.765 cents per kWh for the first 17 kWh a day and 10.139 cents above that; its standard time-of-day D1.11 lines run from 8.728 to 14.487 cents. Consumers Sheet C-64.30 (effective May 1, 2026, Case U-21870) credits residential RSP outflow at 15.1904 cents on June–September on-peak, 10.3970 cents on June–September off-peak and 8.2996 cents from October to May. Both tariffs add the PSCR (Power Supply Cost Recovery) factor on top; it changes over time and is not included in these figures. MPSC's 2019 DTE brief listed 7.477 cents for the first 17 kWh a day, which is now a historical value. The rate schedule named on the bill (D1, D1.11, RSP and so on) decides which line applies. [1] [2] [5]
Legacy net metering is closed to new customers, but existing enrollees keep it for a limited time. Section 183(1) of Public Act 342 lets them keep their terms “for 10 years from the date of enrollment”, and MPSC's DTE brief says “Enrollment means that a customer has submitted a complete application to their utility.” The cutoff is each utility's distributed-generation start date. DTE's Rider 18 applies “on and after May 9, 2019” (order in Case U-20162), so a DTE legacy term ends no later than May 2029. MPSC's calendar-year 2021 program report lists January 1, 2021 as the start of Consumers' distributed-generation enrollment (Case U-20697), so a Consumers legacy term ends by the end of 2030 at the latest. The customer's own enrollment date sets the actual end. Both tariffs say that adding generating capacity to a legacy system moves all on-site generation onto distributed-generation terms. [5] [1] [2] [6]
Public Act 235 of 2023 took effect February 27, 2024. It raised the program cap from 1% to 10% of a utility's average in-state peak load, with at least 50% reserved for systems under 20 kW, and limits an eligible generator to 110% of the customer's electricity consumption over the prior 12 months. MPSC approved the revised DTE (U-21798) and Consumers (U-21796) tariffs on March 13, 2025; DTE's program-terms sheets and Consumers' Sheet C-64.10 carry those dockets. The cap limits how much capacity the program accepts. Remaining capacity is not verified here. [4] [3] [1] [2]
For the same cost and production, a credit below the retail rate lowers yearly savings and lengthens payback, so the retail-valued benchmark is an optimistic comparison. The household table below starts from one assumed annual export price, and a separate DTE row applies Rider 18's published D1 first-block credit to every exported kWh. Neither applies the daily 17-kWh block, time-of-day periods, the PSCR factor or a grandfathered net-metering agreement. Compare those export prices with the credit line for your own rate schedule, and use 12 months of inflow and outflow readings for a real estimate. [1] [2]
How Michigan pays for an exported kilowatt-hour
Export value differs from the full retail bill. Outflow credits are set per rate schedule in DTE Rider 18 and Consumers C11.3, plus a PSCR factor. The main annual split below uses an assumed export price to show the direction of the retail-export error; it is not a tariff price or a grandfather end date. A separate DTE row uses the published D1 first-block credit, without the PSCR factor.
Document: M.P.S.C. No. 1 – Electric, Standard Contract Rider No. 18, Sheets D-112.00 to D-115.00. Effective/source period: Program terms March 13, 2025 (Case U-21798); outflow-credit Sheet D-115.00 February 6, 2025 (Case U-21534); retrieved September 24, 2026.
Applies to: DTE full-service customers on Rider 18; residential D1 and D1.11 lines quoted. Relevant passage: “Customers will be credited for each kWh of Outflow according to the power supply rates shown below, plus the PSCR factor.”.
Document: M.P.S.C. No. 14 – Electric, Sheets C-64.10 to C-64.30. Effective/source period: C-64.10 March 14, 2025 (Case U-21796); C-64.20 April 4, 2025 (Case U-21585); C-64.30 May 1, 2026 (Case U-21870).
Applies to: Consumers full-service customers in the DG program; residential RSP lines quoted. Relevant passage: “based on the power supply rates (which include transmission costs) of their Full Service Rate Schedule”.
Document: Distributed Generation and Interconnection workgroup page; Cases U-21569 and U-21767. Effective/source period: Law effective February 27, 2024.
Applies to: Utility and alternative-supplier DG programs. Relevant passage: “Public Act 235 increases the Distributed Generation (DG) program cap from 1% to 10%”.
Document: DTE Distributed Generation Issue Brief, May 2, 2019 (Case U-20162), questions 6, 8, 13 and 17. Effective/source period: Historical: DTE tariff effective May 9, 2019; the 7.477-cent value is not current.
Applies to: DTE residential DG and legacy net-metering customers. Relevant passage: “Enrollment means that a customer has submitted a complete application to their utility.”.
Document: Table 5, report page 12: DG tariff order and enrollment start dates by utility. Effective/source period: Covers calendar year 2021; the dates listed are historical.
Applies to: Rate-regulated utility DG programs. Relevant passage: “may continue to net meter under the legacy net metering program for 10 years from the date of their initial enrollment”.
MPSC distributed-generation consumer brief — General outflow-credit rule; ten-year legacy term for sign-ups before DG rates set in a rate case filed after June 1, 2018.
Document: Distributed Generation brief, 2 pages. Effective/source period: MPSC brief dated January 2020; utility tariff status “As of December 2019”; predates PA 235 (February 27, 2024) and the 2025 tariff approvals.
Applies to: Legacy net-metering enrollees and DG customers. Relevant passage: “receive a credit generally equal to the power supply component of the retail rate for all power they generate but do not use on-site”.
Document: MPSC Staff DG tariff study report, February 21, 2018; Executive Summary, report page 1. Effective/source period: Historical design record, not current prices.
Applies to: Rate-regulated utility DG design; legacy NEM distinguished. Relevant passage: “approach to billing DG customers called the Inflow/Outflow billing mechanism”.
“Source documents checked 2026-09-24” means each linked document was retrieved on that date and the passage quoted under it is the text the claims in this section rely on. The date covers only those claims. It is not a household eligibility decision or a guarantee that a tariff is still current, so check the linked live documents before signing a contract, and report corrections via the contact page.
Common retail-value benchmark — not a household forecast
No incentives; every modeled kWh is valued at the historical state-average retail price. The household scenarios below separate assumed import/export prices, consumption share, cash cost and receipt timing.
How Michigan compares with the other 50 records in this dataset
Measure
Michigan
Dataset median
Rank of 51
Avg residential rate
19.30¢/kWh
14.91¢/kWh
12th highest
NSRDB daily sunlight (one location per state)
4.4 kWh/m²/day
4.9 kWh/m²/day
47th highest
Retail benchmark payback
11.6 years
13.0 years
16th fastest on this benchmark
Household scenarios below (range)
12.9 years to 17.1 years
—
Not ranked across states
The rank compares every state on the same full-retail basis; it is a benchmark, not a forecast for a new Michigan customer. The household scenarios below, each with its own stated import price, export credit, cost and incentive timing, give 12.9 years to 17.1 years.
Rate: Calendar year 2024 annual average, from the EIA. Sunlight is NSRDB data via NLR PVWatts v8 at each state's 2020 Census center of population, one location per state (request settings and the values PVWatts returned are in state-insolation-pvwatts.json). Ranks and medians are computed across the 50 states and DC in this dataset. Every input behind the payback figure is printed in the assumptions block below, and the full 51-row table is at /states.
Reproduce the Michigan household comparisons
These are hypothetical households, not customer results or offers. All start from an assumed 7 kW array producing 8768.76 kWh in year one; any row that changes production (a battery or a production-stress row) says so. The sunlight input is NSRDB data via PVWatts v8 for one location per state (request and response in state-insolation-pvwatts.json; see the methodology), not a production estimate for your roof. No federal credit is applied. No loan, income-tax effect on incentive revenue, battery replacement or future tariff change is modeled.
The benchmark row prices every kWh at the EIA average cited above. Where another row applies a published figure (for example a tariff or rider rate or charge, a program incentive rate, a statutory fee schedule, or a tax credit's rate, cap or carryforward period), that figure comes from a document in the sources list above. Every other price, consumption share, cost, fee, receipt date and amount of tax a household can use in a year is assumed. Eligibility remains conditional. The annual split does not reproduce monthly netting, time-of-use periods, credit caps, curtailment or minimum bills. Annual fees represent incremental solar costs, not charges you would pay with or without solar.
Production degrades by assumed 0.5% per year. The main result increases both import and export prices by assumed 3% per year; the flat-price column sets that to zero. Neither escalation is a tariff forecast. Fixed fees and scheduled receipts do not escalate. Energy savings accrue uniformly within a year for interpolation; incentives arrive only at year end.
Modeled results, not guarantees. No break-even means no crossing inside 25 years, not a calculated date beyond year 25.
Scenario
Initial cash cost
Year 1 energy value
Year 1 net cash incl. receipts
Payback
Flat-price payback
25-year net cash after cost
Common retail-value benchmark — no incentives
$22,400.00
$1,692.37
$1,692.37
11.6 years
13.7 years
Modeled $35,295.42
Hypothetical household — no incentives
$22,400.00
$1,284.62
$1,284.62
14.7 years
18.2 years
Modeled $21,394.71
Illustrative higher cash price — no incentives
$26,880.00
$1,284.62
$1,284.62
17.1 years
22.0 years
Modeled $16,914.71
Illustrative 75% self-use — no incentives
$22,400.00
$1,488.50
$1,488.50
12.9 years
15.6 years
Modeled $28,345.07
DTE D1: published outflow credit (8.765 cents) — no incentives
$22,400.00
$1,230.48
$1,230.48
15.2 years
19.0 years
Modeled $19,548.76
Inputs, receipts and annual arithmetic: Common retail-value benchmark — no incentives
Historical state-average import value for ALL production; only a comparison, not an address-specific tariff.
Assumed initial cash cost $22,400.00, not reduced by any upfront credit or rebate; any receipt is listed below and arrives at year end. Import 19.300¢/kWh; export 19.300¢/kWh; self-use 100%; incremental fixed annual cost $0.00.
Year-one modeled energy value = 8768.76 × [(100/100 × 19.3/100) + ((1 − 100/100) × 19.3/100)] = $1,692.37. Subtract the annual fixed cost and add only that year's receipts for net cash. Display rounds cents; the downloadable calculation retains full precision.
Incentive basis: None; no eligibility or benefit assumed. Modeled total receipts inside 25 years: $0.00. These are not subtracted from initial cash cost.
The exact input fields and all 25 modelled years for this row are in the JSON download above.
Inputs, receipts and annual arithmetic: Hypothetical household — no incentives
Import is the 19.3-cent EIA 2024 Michigan average, not a DTE or Consumers rate schedule. The 10-cent outflow price is an assumed round figure close to the 10.139-cent credit DTE Rider 18 (Sheet D-115.00) gives residential D1 outflow beyond the first 17 kWh a day; it is not a Consumers value or a legacy-enrollment determination. The DTE row below uses the 8.765-cent first-block credit.
Assumed initial cash cost $22,400.00, not reduced by any upfront credit or rebate; any receipt is listed below and arrives at year end. Import 19.300¢/kWh; export 10.000¢/kWh; self-use 50%; incremental fixed annual cost $0.00.
Year-one modeled energy value = 8768.76 × [(50/100 × 19.3/100) + ((1 − 50/100) × 10/100)] = $1,284.62. Subtract the annual fixed cost and add only that year's receipts for net cash. Display rounds cents; the downloadable calculation retains full precision.
Incentive basis: None; no eligibility or benefit assumed. Modeled total receipts inside 25 years: $0.00. These are not subtracted from initial cash cost.
The exact input fields and all 25 modelled years for this row are in the JSON download above.
Inputs, receipts and annual arithmetic: Illustrative higher cash price — no incentives
Same production, prices, consumption share and fees, but cash cost is 20% higher; not a market-price estimate.
Assumed initial cash cost $26,880.00, not reduced by any upfront credit or rebate; any receipt is listed below and arrives at year end. Import 19.300¢/kWh; export 10.000¢/kWh; self-use 50%; incremental fixed annual cost $0.00.
Year-one modeled energy value = 8768.76 × [(50/100 × 19.3/100) + ((1 − 50/100) × 10/100)] = $1,284.62. Subtract the annual fixed cost and add only that year's receipts for net cash. Display rounds cents; the downloadable calculation retains full precision.
Incentive basis: None; no eligibility or benefit assumed. Modeled total receipts inside 25 years: $0.00. These are not subtracted from initial cash cost.
The exact input fields and all 25 modelled years for this row are in the JSON download above.
Inputs, receipts and annual arithmetic: Illustrative 75% self-use — no incentives
Assumes a different load profile serves 75% of production on site without added equipment cost. This is a sensitivity, not a promised behavioral saving.
Assumed initial cash cost $22,400.00, not reduced by any upfront credit or rebate; any receipt is listed below and arrives at year end. Import 19.300¢/kWh; export 10.000¢/kWh; self-use 75%; incremental fixed annual cost $0.00.
Year-one modeled energy value = 8768.76 × [(75/100 × 19.3/100) + ((1 − 75/100) × 10/100)] = $1,488.50. Subtract the annual fixed cost and add only that year's receipts for net cash. Display rounds cents; the downloadable calculation retains full precision.
Incentive basis: None; no eligibility or benefit assumed. Modeled total receipts inside 25 years: $0.00. These are not subtracted from initial cash cost.
The exact input fields and all 25 modelled years for this row are in the JSON download above.
Inputs, receipts and annual arithmetic: DTE D1: published outflow credit (8.765 cents) — no incentives
DTE Electric Rider 18, Fourth Revised Sheet No. D-115.00 (effective for service on and after February 6, 2025, Case No. U-21534), lists the residential D1/D1.6 outflow credit at 8.765 cents/kWh for the “First 17 kWh per Day” and 10.139 cents for the excess; Sheet D-114.00 (Case U-21798) adds the PSCR factor, which was not retrieved and is not included. This row applies 8.765 cents to every exported kWh, with the same 19.3-cent EIA 2024 import price and 50% self-use. DTE territory only; Consumers Energy's outflow credits differ.
Assumed initial cash cost $22,400.00, not reduced by any upfront credit or rebate; any receipt is listed below and arrives at year end. Import 19.300¢/kWh; export 8.765¢/kWh; self-use 50%; incremental fixed annual cost $0.00.
Year-one modeled energy value = 8768.76 × [(50/100 × 19.3/100) + ((1 − 50/100) × 8.765/100)] = $1,230.48. Subtract the annual fixed cost and add only that year's receipts for net cash. Display rounds cents; the downloadable calculation retains full precision.
Incentive basis: None; no eligibility or benefit assumed. Modeled total receipts inside 25 years: $0.00. These are not subtracted from initial cash cost.
The exact input fields and all 25 modelled years for this row are in the JSON download above.
Formula and modeling limitations · Use the editable calculator below to test your own cash price and energy split. It cannot confirm utility enrollment or tax eligibility.
Assumptions behind the Michigan retail-value benchmark
A common full-retail comparison, not an address-specific forecast. Size alone does not change payback when cash cost and production both scale proportionally. Use the worksheet to vary cash price, production, self-consumption, export value and recurring costs.
System modeled
7 kW DC
Assumed installed cost
$22,400 (assumed $3.20/W DC)
Annual production, year 1
8,769 kWh
Production basis
NSRDB daily sunlight on a 20° south-facing panel at Michigan's 2020 Census population center (4.40 kWh/m²/day, via PVWatts v8). Annual production = system kW × this input × 365 × assumed performance ratio. PVWatts' own modelled AC output for the same request is 1,267.8 kWh per kW, or 8,875 kWh for 7 kW, so this shortcut runs 1.2% below it; on the PVWatts figure the benchmark payback would be 11.5 years.
Performance ratio (system losses)
0.78
EIA state-average retail rate
19.30¢/kWh — Calendar year 2024 annual average
Panel degradation
0.5%/yr
Assumed electricity price escalation
3.0%/yr, not a forecast
Model horizon
25 years
Federal tax credit applied
None included in this benchmark
State or utility incentives applied
None deducted in this benchmark. Where a household scenario above applies a published tariff rate or a conditional receipt, its row says so; this benchmark applies none of them
Assumed value of all production
Full retail rate, including exports; not a utility tariff lookup
Recurring operating costs applied
None in this benchmark; editable in worksheet
How the payback figure reconciles
Modelled $22,400 ÷ modelled $1,692 of year-one savings = 13.2 years — the straight division, if electricity prices never move and the panels never age.
With 0.5%/yr degradation and prices held flat: 13.7 years.
With the same degradation and electricity prices rising 3.0%/yr: 11.6 years — the retail-value benchmark, not a household forecast.
Production stress test, same assumed prices: 20% less production (shading, a poorer roof angle) gives 14.0 years; 20% more production gives 9.9 years. This is a what-if range, not a confidence interval.
These price-growth rates are assumptions, not forecasts of your utility's tariff. None of these cases models financing, taxes, battery dispatch or actual utility settlement. No crossing within 25 years does not establish a crossing later. Full wording on the methodology.
Solar cash-flow worksheet
Compare assumed cash flows, not an address-specific forecast. No tariff, roof or incentive eligibility is looked up. Your worksheet entries are calculated in this browser; the worksheet does not send them anywhere or save them between visits. The site also loads Google advertising code; the privacy page explains what that code may collect and your choices.
Starting retail rate: 19.30¢/kWh — Calendar year 2024 annual average (Michigan), from EIA Table 2.10. It is not your current tariff. All cost, export, usage, escalation and incentive entries are assumptions.
With no incentives or recurring costs, fixed cost/W and proportional generation mean that increasing size scales cost and savings equally: payback years cancel out. Unedited price and production follow that rule here. Once you edit either, it stays fixed when size changes; update it deliberately. Different cash prices, shading/production and export shares can change payback.
Optional assumed cash incentives — zero by default
No federal, state or utility incentive is inferred. Check eligibility and actual receipt timing. Recurring and delayed incentives arrive at year end; do not enter the same benefit in multiple fields. Operating cash is approximated uniformly within each year.
Your entered scenario — modelled, not a quote
Modelled installed cash price
$22,400
Modelled initial outlay after upfront rebate
$22,400
Modelled year-one net cash, including receipts/costs
$1,692
Modelled first cash-flow break-even
11.6 years
Modelled 25-year net cash after initial outlay
$35,295
Modelled production in year one
8,769 kWh
Modelled year-one energy value before costs/incentives: $1,692.
No break-even inside 25 years means the model never crosses within its horizon; it does not predict a later crossing. This is undiscounted cash flow, not investment return. A first crossing can reverse if later operating costs exceed cash benefits. Financing, taxes, changing export rules, time-of-use settlement, credit expiry and battery dispatch are not simulated.
Assumed price-escalation sensitivity
Same entered inputs, degradation and nominal fixed costs; only import/export price escalation changes. These are scenarios, not forecasts.
0%/year: 13.7 years
3%/year: 11.6 years
6%/year: 10.2 years
Separate common retail-value benchmark
This comparison uses 7 kW, assumed $3.20/W, production from the state's one-location NSRDB sunlight input and 19.30¢/kWh (Calendar year 2024 annual average) for every kWh. It ignores your entered cash price, production, tariff, costs and incentives; assumes 0.5% degradation and 3% escalation. It is not an address forecast.
Benchmark assumed cash price
$22,400
Benchmark modelled year-one value
$1,692
Benchmark modelled break-even
11.6 years
Reproduce the 25-year modelled cash flows for your entered scenario
Annual cash = degraded production × weighted import/export price × price-escalation factor − annual fixed cost + eligible year-end receipts. Cumulative cash starts at negative initial outlay. Incentives after year 25 are excluded.
Use your utility tariff and a site-specific production assessment to refine inputs. Methodology and limitations.
Estimate only. State comparisons are common retail-value benchmarks, not forecasts for your roof. Custom scenarios depend on the cash price, production, import/export prices, self-consumption and other assumptions entered. They are not quotes or guarantees. Listed incentives do not establish eligibility or a payment date. The Residential Clean Energy Credit (Section 25D, the 30% federal tax credit) expired for systems placed in service after December 31, 2025. Verify all numbers with a licensed installer and your utility before making a purchase decision. See full disclaimer.
Compare every state
Michigan is one of 17 jurisdictions with a written analysis on this site: 16 states and the District of Columbia. The rate, sunlight, modeled payback and recorded incentives for all 50 states and DC — including those without a page — are in one sortable table.