Michigan Solar Panel Laws: Your Rights & How to Exit a Solar Contract

Michigan homeowners who signed solar contracts through home solicitation generally have 3 business days to cancel under both state and federal law. Beyond that window, the Michigan Consumer Protection Act (MCPA, MCL 445.901 et seq.) may provide additional grounds for relief. Michigan's distributed generation program, which replaced traditional net metering in 2018, has significantly changed the economics of solar contracts. We always recommend consulting a qualified Michigan attorney before taking action.

Right to Cancel / Cooling-Off Period in Michigan

Michigan provides cooling-off protections for homeowners who signed solar contracts through door-to-door sales or other home solicitation methods. These protections are increasingly important as solar sales teams expand their operations across Michigan.

Michigan Home Solicitation Sales Act (MCL 445.111 et seq.)

Under the Michigan Home Solicitation Sales Act, if a solar contract was signed at your home or at a location other than the seller's regular place of business, and the purchase price is $25 or more, you generally have 3 business days to cancel. The seller must:

• Provide you with a written notice of your right to cancel at the time of the sale
• Include a detachable cancellation form with the contract
• Clearly inform you of the 3-business-day cancellation window
• Not begin work before the cancellation period expires

Federal FTC Cooling-Off Rule

The federal FTC Cooling-Off Rule (16 CFR Part 429) provides an additional 3-business-day cancellation window for home solicitation sales, operating alongside Michigan's state protections.

Michigan Home Improvement Contracts

Michigan's Home Improvement Finance Act (MCL 445.1101 et seq.) provides additional protections for home improvement financing contracts, which may include solar installation financing. Under this act, specific disclosures are required in home improvement contracts, and failure to comply may affect the enforceability of the contract.

Michigan Consumer Protection Laws Relevant to Solar

Michigan Consumer Protection Act (MCL 445.901 et seq.)

The Michigan Consumer Protection Act (MCPA) prohibits unfair, unconscionable, or deceptive methods, acts, or practices in trade or commerce. Under MCL 445.903, prohibited acts include:

• Causing a probability of confusion as to the source, affiliation, or certification — such as implying the solar company is affiliated with DTE Energy or Consumers Energy
• Representing that goods have characteristics or benefits they do not — such as overstating solar energy production or savings
• Representing that a transaction involves rights or obligations it does not — such as calling a lease "ownership"
• Failing to reveal a material fact — such as not disclosing dealer fees, the impact of Michigan's distributed generation rates, or the total cost over the contract term
• Making a representation of fact that is misleading — such as using outdated net metering rates for savings projections

Under the MCPA, consumers may recover actual damages or $250 (whichever is greater), and the court may award reasonable attorney's fees. The Michigan Attorney General may also bring enforcement actions seeking injunctions and civil penalties.

Michigan Residential Builders License

Michigan requires residential builders and maintenance and alteration contractors to be licensed by the Michigan Department of Licensing and Regulatory Affairs (LARA). Under MCL 339.2401 et seq., performing residential building or alteration work without a license is a misdemeanor. Solar installations that involve structural modifications or roof work may require a residential builder license. If your installer lacked the required license, the contract may be unenforceable.

Michigan Electrical Contractor Requirements

Solar installations require electrical work that must be performed by licensed electrical contractors under Michigan law. The Michigan Department of LARA oversees electrical contractor licensing. If the electrical work associated with your solar installation was performed by unlicensed individuals, this may provide grounds for a complaint and strengthen your position in a contract dispute.

Solar-Specific Regulations in Michigan

Michigan Distributed Generation Program (Replacing Net Metering)

Michigan's solar compensation landscape changed significantly in 2018 when the state transitioned from traditional net metering to a distributed generation (DG) program under the 2016 Energy Law (Public Acts 341 and 342). Key aspects:

• Legacy net metering: Customers who enrolled in net metering before the cap was reached (or before the transition) are generally grandfathered at retail-rate credits for 10 years from their enrollment date
• DG program (new customers): New customers receive credits through the Distributed Generation tariff, which typically provides less than the full retail rate. The credit structure is set through MPSC proceedings and varies by utility
• Inflow/outflow billing: Under the DG program, energy consumed from the grid (inflow) and energy sent to the grid (outflow) are metered separately, with different rates for each
• System size: Residential DG systems are generally limited to the capacity needed to serve the customer's own load

The DG transition is critically important for solar contract disputes because:

• Solar companies that sold systems using net metering-era savings projections when the homeowner would actually receive DG rates may have provided misleading information
• The difference between retail-rate net metering and DG outflow credits can significantly affect the financial return on a solar system
• Grandfathered net metering customers have a limited 10-year window, after which they transition to DG rates

Michigan Public Service Commission (MPSC) Oversight

The MPSC regulates Michigan's investor-owned utilities, including DTE Energy and Consumers Energy. Key MPSC roles:

• DG tariff proceedings — the MPSC sets the rates and rules for distributed generation compensation
• Interconnection standards — the MPSC establishes standards for connecting solar to the grid
• Consumer complaints — the MPSC accepts and investigates complaints about utility and solar issues

Michigan Property Tax Treatment

Michigan does not currently offer a specific statewide property tax exemption for residential solar systems. Under Michigan's General Property Tax Act, solar equipment may be classified as personal property or real property depending on how it's attached, potentially affecting your property tax assessment. If a solar company misrepresented the property tax implications, this may support an MCPA claim.

Michigan Renewable Energy Standard

Michigan's Clean Energy Standard (MCL 460.1001 et seq., as amended by PA 342 of 2016) requires utilities to achieve 15% renewable energy by 2021 and sets clean energy goals beyond that. While this primarily affects utilities, it has driven solar sales activity in the state and is sometimes misrepresented by solar companies as requiring homeowners to "go solar."

Common Solar Contract Issues in Michigan

Michigan's solar market has seen increasing consumer complaints. Based on reports filed with the Michigan AG and MPSC, these are the most common issues:

How to Exit a Solar Contract in Michigan — Step by Step

If you're a Michigan homeowner looking to exit your solar contract, the approach depends on your specific circumstances. Below is a general framework — we always recommend consulting a qualified Michigan attorney before taking action.

Step 1: Gather Your Documents

• Your original solar contract (lease, PPA, or loan agreement)
• All marketing materials, savings projections, and proposals
• Records of verbal promises about savings or production
• Electricity bills from before and after solar installation
• Solar system production data
• Whether you're on legacy net metering or DG tariff
• Your utility interconnection agreement
• Any correspondence with the solar company
• The installer's LARA license information

Step 2: Determine Your Cancellation Window

• Within 3 business days (home solicitation): Send cancellation via certified mail. Reference MCL 445.111 and the FTC Cooling-Off Rule
• Past cooling-off but before installation: Check your contract for pre-installation provisions. Pre-installation guide →
• After installation: Proceed to Steps 3-5

Step 3: Check Licensing

Verify the installer's residential builder license and electrical contractor license through LARA. Missing licenses may void the contract.

Step 4: Evaluate MCPA Claims

• Savings projections based on net metering rates instead of DG rates
• Failure to disclose dealer fees or financing costs
• Overstated production estimates that don't reflect Michigan's climate
• Impersonation of utility company representatives
• Failure to provide required cancellation notices
• Misrepresentation of property tax implications

Step 5: File Complaints

File with the Michigan AG Consumer Protection Division and MPSC.

Step 6: Consider Professional Exit Services

Compare solar cancellation companies →

Michigan Consumer Protection Agencies & Resources

Frequently Asked Questions About Michigan Solar Panel Laws