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Solar Payback Years

All states

Solar payback in Michigan

A 7.7 kW home solar system in Michigan pays for itself in about 20.3 years at 2026 prices, with no federal tax credit. That ranks #47 of 51 states, where 1 is the fastest.

Installed price
$3.60/W
national median, 2025
Solar output
1,291 kWh
per kW a year, Detroit weather
Electricity rate
23.05¢/kWh
average home rate, EIA
Value of a solar kWh
13.7¢
net billing

Pays back in year 21

Cost up front
$27,720
Saved per year
$1,364
Ahead after 25 years
$6,377

Payback by quoted price and roof direction

Find your installer's price per watt (total price divided by system watts) to read your payback in Michigan. Nationally, cash buyers paid a median of $3.00 per watt in 2025 and loan buyers $4.50, because loan fees are often built into the price. East and west roofs make 14% and 15% less power than south here.

Price per watt7.7 kW costsSouth roofEast roofWest roof
$2.50 $19,250 14.1 years16.4 years16.6 years
$3.00 $23,100 16.9 years19.7 years19.9 years
$3.60 (national median) $27,720 20.3 years23.7 years23.9 years
$4.00 $30,800 22.6 years26.3 years26.6 years
$4.50 $34,650 25.4 years29.6 years29.9 years

System size barely changes payback here: a bigger system costs more and saves more in about the same proportion.

Questions about solar in Michigan

How does Michigan pay for solar power I send to the grid?

Michigan replaced net metering with a distributed generation program in 2018. Power you use at home saves the full retail rate; power you send to the grid earns only the power supply part of the rate, minus transmission. For DTE customers that outflow credit was 7.477 cents per kWh when the Public Service Commission set it; it moves with each utility rate case. We assume you use 40% of your solar power at home, which makes the average solar kWh worth 13.7¢. Source.

How much did the end of the federal tax credit change payback in Michigan?

With the 30% credit that ended in 2025, the same system would have paid back in about 14.2 years instead of 20.3. The credit ended for systems installed after December 31, 2025. Leased systems and power purchase agreements can still pass on a business credit, but then you do not own the panels.

Is 1,291 kWh per kW a lot?

The range across states runs from about 922 kWh in Alaska to about 1,779 in the Southwest. Sunshine matters less than people expect: the electricity rate and how your utility credits exports move payback more.

States near Michigan in the ranking