Michigan’s clean energy legislation, rewritten in November 2023, commits the state to 100% clean electricity by 2040 and layers new obligations on utilities, energy developers, local governments, and customers who generate their own power. The core package — Public Acts 233 and 235 of 2023, along with a reinstated prevailing wage law — raised renewable targets, created a statewide energy storage mandate, moved siting authority for large wind and solar projects to the state, and expanded rooftop solar access.1Michigan Legislature. Public Act 235 of 20232Michigan Legislature. Public Act 233 of 2023
The 2035 and 2040 Clean Energy Standard
Every electric provider in Michigan must source at least 80% of its portfolio from clean energy by 2035 and 100% by 2040.3Michigan Legislature. MCL Section 460.1051 – Clean and Renewable Energy and Energy Waste Reduction Act (Excerpt) “Clean energy” is defined broadly. It covers any generation that produces no greenhouse gas emissions, which includes nuclear power alongside wind and solar. Natural gas plants also qualify if they capture and permanently store at least 90% of their carbon dioxide emissions, and using that CO₂ for enhanced oil recovery does not count as permanent storage.4Michigan Legislature. MCL Section 460.1003 – Clean and Renewable Energy and Energy Waste Reduction Act (Excerpt) The Michigan Public Service Commission can designate additional technologies as clean energy by rule.
The nuclear provision applies to both new and existing plants, with no distinction drawn between them in the statute.1Michigan Legislature. Public Act 235 of 2023
A Separate Renewable Portfolio Requirement
The clean energy standard sits on top of a separate renewable energy credit requirement. Electric providers must maintain a renewable portfolio of at least 15% through 2029, 50% from 2030 through 2034, and 60% from 2035 onward.5Michigan Legislature. MCL Section 460.1028 – Clean and Renewable Energy and Energy Waste Reduction Act (Excerpt) Because the two requirements run in parallel, a utility cannot meet its 2035 obligations with nuclear or carbon-capture gas alone. At least 60% must come from renewable sources like wind, solar, and biomass.
Energy Waste Reduction Targets
Every electric and natural gas provider must operate an approved energy waste reduction plan.6Michigan Legislature. MCL Section 460.1071 – Clean and Renewable Energy and Energy Waste Reduction Act (Excerpt) Starting in 2026, electric providers must achieve incremental annual savings equal to 1.5% of the previous year’s total retail electricity sales, with measures averaging at least an eight-year useful life. Natural gas providers must hit 0.875% of the prior year’s retail gas sales, with measures averaging at least a ten-year useful life.7Michigan Legislature. MCL Section 460.1077 – Clean and Renewable Energy and Energy Waste Reduction Act (Excerpt)
Utilities typically meet these targets through rebates for efficient appliances, home energy audits, weatherization incentives, and commercial lighting and HVAC upgrades. Providers that exceed the standard can earn a financial incentive capped at the lesser of 35% of customer life-cycle cost reductions or 25% of the provider’s actual program spending for the year.8Michigan Legislature. MCL Act 295 of 2008 A provider that would rather not run its own program can make an alternative compliance payment to the Commission, which routes those funds to an independent program administrator.
Low-Income Spending Floors
The 2023 amendments added equity requirements. Electric providers must spend at least 25% of their total energy waste reduction budget on low-income programs and measures. For natural gas providers, the floor is 35%. Providers below these thresholds must ramp up annually to reach compliance by January 1, 2029.9Michigan Legislature. MCL Section 460.1080 – Clean and Renewable Energy and Energy Waste Reduction Act (Excerpt)
A Statewide Energy Storage Mandate
Michigan now has a statewide energy storage target of at least 2,500 megawatts of combined capacity. By December 31, 2029, investor-owned utilities must petition the Michigan Public Service Commission for approvals to build or acquire eligible storage systems, and alternative electric suppliers must file plans showing how they will meet their share of the target.1Michigan Legislature. Public Act 235 of 2023 The Commission is developing the framework for how that 2,500 MW will be allocated among providers.10State of Michigan. Statewide Energy Storage Target Battery systems, pumped hydro, and other storage technologies can absorb excess generation during peak production and release it when demand is high or the sun isn’t shining.
State Siting for Large Wind and Solar
Before 2024, local governments had primary authority over where wind and solar projects could be built. Public Act 233 of 2023 gave the Commission certification authority over large renewable energy facilities: solar projects of 50 megawatts or more and wind projects of 100 megawatts or more.2Michigan Legislature. Public Act 233 of 2023 Developers of projects that meet these thresholds can apply for a state certificate if a local government bans the project, imposes overly restrictive rules, or denies approval after review.
Local involvement is not eliminated. Developers must first negotiate a host community agreement with each affected local government, paying at least $2,000 per megawatt of nameplate capacity located within that jurisdiction.2Michigan Legislature. Public Act 233 of 2023 If a local government refuses to negotiate in good faith, the developer can instead enter into a community benefit agreement with local organizations. That agreement must provide payments at least equal to what a host community agreement would have required, and it can cover workforce development, environmental programs, community improvements, or grants to local nonprofits.
The Pending Challenge
Over 100 townships and counties have challenged the Commission’s rules implementing PA 233. In January 2025, the Michigan Court of Appeals denied a request from those communities to temporarily halt enforcement of the siting rules while their appeal proceeds. The court has not yet ruled on the substance of the communities’ arguments, so the case remains pending. As of early 2025, no developer had applied for state-level review under the law, so the practical effects of the siting provisions have not yet been tested.
Rooftop Solar and Distributed Generation
Any electric customer can install a renewable generator and operate it in parallel with the utility grid, provided the system is sized to meet no more than 110% of the customer’s annual electricity consumption and does not exceed 550 kilowatts. The 2023 amendments expanded the program’s overall capacity cap from 1% to 10% of a utility’s average in-state peak load over the preceding five years. At least half that capacity is reserved for small systems of 20 kilowatts or less, with the remaining half available for systems up to 550 kilowatts.11Michigan Legislature. MCL Section 460.1173 – Clean and Renewable Energy and Energy Waste Reduction Act (Excerpt)
Compensation for excess energy sent back to the grid has changed. Under the legacy net metering program, customers received a credit at the full retail electricity rate. Under the distributed generation tariff the Commission approved in October 2024, excess generation is credited at the power supply component of the retail rate, which is less than the full rate. Transmission costs may also be subtracted.12State of Michigan: Michigan Public Service Commission. 2025 Status of Renewable Energy, Distributed Generation, and Legacy Net Metering in Michigan The practical effect for homeowners with rooftop solar: using your own power on-site is worth more than exporting it to the grid.
Prevailing Wage on Renewable Construction
Michigan’s reinstated prevailing wage law explicitly covers renewable energy construction. Any solar or wind project with a nameplate capacity of 2 megawatts or more qualifies as a “state project” subject to prevailing wage requirements. Every construction worker on the job must be paid at least the wage and fringe benefit rates prevailing in the local area, typically set by collective bargaining agreements.13Michigan Legislature. Prevailing Wages on State Projects – Act 10 of 2023
Contractors and subcontractors must keep certified payroll records for at least three years and submit them within 10 days of each pay period. They must hold a valid state project registration before bidding on covered work, and that registration is renewed annually. Violations carry a civil fine of up to $5,000 per infraction, and the Commissioner can assess an additional 10% penalty on top of that. The law also prohibits retaliation against workers who report suspected violations.
Rebates for Michigan Residents
Michigan residents can access rebates to offset the cost of energy efficiency upgrades through the Michigan Home Energy Rebates program. It has two components: Home Efficiency Rebates, which fund whole-home energy upgrades and retrofits, and Home Electrification and Appliance Rebates, which help cover the cost of efficient electric appliances and technologies in single-family and multifamily homes.14Department of Environment, Great Lakes, and Energy. Home Energy Rebates Residents who don’t qualify for these programs may still be able to use federal Inflation Reduction Act tax credits or utility-administered rebate programs for similar upgrades.15Department of Environment, Great Lakes, and Energy. FAQ: Home Energy Rebates