Solar panels in Michigan: payback, production and savings

In Detroit, each kW of south-facing panels produces about 1,291 kWh a year, #44 of 51 states for sunshine. Homes in Michigan paid 23.05¢/kWh on average in July 2026 (#13 highest in the U.S.; national average 18.31¢), up 12.2% from a year earlier. Above-average power prices make every solar kWh worth more here.

Output by month (kWh per kW)

Jul is the best month (152 kWh) and Dec the weakest (51 kWh).

Example: 7 kW system, 10,500 kWh/yr home

	Full net metering	Credit ½ retail	Credit ¼ retail
Year-1 savings	$2,082	$1,525	$1,247
Payback	9.7 years	12.8 years	15.3 years
25-year net gain	$43,093	$26,242	$17,817

Assumptions, not quotes: $21,000 installed ($3,000/kW), no incentives, 40% of use during daylight, power prices +2.5%/yr. Change them below.

How roof direction changes output in Michigan

kWh per kW per year, and the difference vs. south at 20°.

Facing	20° pitch	30° pitch
South	1,291 (+0%)	1,324 (+3%)
Southeast	1,241 (-4%)	1,258 (-3%)
Southwest	1,234 (-4%)	1,248 (-3%)
East	1,109 (-14%)	1,079 (-16%)
West	1,098 (-15%)	1,065 (-18%)
East-west (split)	1,103 (-15%)	1,072 (-17%)

What to check before going solar in Michigan

How your utility credits exports. Net metering rules differ by state and by utility, and several states have moved to lower "net billing" credits worth a fraction of the retail rate. The example table shows three cases; look up your utility's current program in the DSIRE database.
Federal tax credit. The 30% residential clean energy credit does not apply to systems placed in service after December 31, 2025 (IRS). Count only state or utility incentives that are still open.
Your real price per kWh. Divide your bill's energy and delivery charges by the kWh used; fixed monthly fees don't go away with solar.

Run your own numbers in Michigan

Your roofLocation

FacingRoof pitch

System sizekWA typical modern panel is 0.4 kW.

Your usageAnnual electricity usekWh/yrAdd up 12 months of bills. U.S. homes average roughly 10,000–11,000 kWh.Use while the sun is up%30–40% if nobody is home during the day; 50–60% if you work from home.

PricesElectricity price$/kWhBlank = Michigan average from EIA ($0.231/kWh). Use your bill's all-in rate.Credit for exported powerInstalled cost$/kWYour quote divided by system size. Example value.Rebates and incentives$The 30% federal credit ended for systems placed in service after Dec 31, 2025.

Advanced

Maintenance & insurance$/yrElectricity price change%/yrAssumption. Try 0% for a conservative case.

First-year savings

$2,082

Payback

9.7 years

25-year net gain

$43,093

Return (IRR)

10.1%

Production vs. use by month

9,034 kWh/yr produced · covers 40% of your use directly · 46% of output used on the spot.

Production Use

Which size pays off best?

Same usage and prices, only size changes. Best 25-year net gain: 10 kW.

kW	Cost	Year-1 savings	Payback	25-yr gain
3	$9,000	$892	10.2 years	$17,040
4	$12,000	$1,190	10.0 years	$23,553
5	$15,000	$1,487	9.8 years	$30,066
6	$18,000	$1,785	9.7 years	$36,580
7	$21,000	$2,082	9.7 years	$43,093
8	$24,000	$2,380	9.6 years	$49,606
10	$30,000	$2,420	11.3 years	$50,170
12	$36,000	$2,420	13.2 years	$44,170

Estimate based on NLR PVWatts and EIA data. See the methodology.

States with similar sunshine

Data: NLR PVWatts v8 (U.S. DOE National Laboratory of the Rockies, formerly NREL), TMY weather for Detroit (42.33, -83.05), 14% losses, retrieved 2026-10-11. Prices: U.S. EIA Electric Power Monthly, Table 5.6.A (July 2026). Methodology.