Michigan Laws and Incentives

Listed below are the summaries of all current Michigan laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Alternative Fuel Development Property Tax Exemption

Industrial property that is used for high-technology activities or the creation or synthesis of biodiesel fuel may be eligible for a tax exemption. High-technology activities include those related to advanced vehicle technologies such as electric, hybrid electric, or alternative fuel vehicles and their components. To qualify for the tax exemption, an industrial facility must obtain an exemption certificate for the property from the Michigan State Tax Commission. (Reference Michigan Compiled Laws 207.552 and 207.803-207.809)

Medium- and Heavy-Duty Grant Program

The Michigan Department of Environment, Great Lakes, and Energy (EGLE) offers grants for eligible on- and off-road vehicles and equipment. Projects must reduce nitrogen oxide emissions, improve air quality, and increase adoption of zero emission or alternative fuel vehicles and equipment. Eligible vehicles and equipment include local freight vehicles (medium- and heavy-duty trucks and port drayage trucks), shuttle and transit buses, port cargo handling equipment and forklifts, airport ground support equipment, and more. The program is funded by Michigan’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including available requests for proposals, see the EGLE Fuel Transformation Program website.

Charge Up Michigan Placement Project

The Michigan Department of Environment, Great Lakes, and Energy provides funding for public or private organization for the installation of direct current (DC) fast chargers, site preparation, and networking fees and signage. Applicant must be enrolled in a utility electric vehicle (EV) program. Grants are equal to the lesser of 33.3% of the total cost of the project or a direct match of the electric utility funding, up to $70,000. For more information, including eligibility requirements and application, see the EV Charger Funding Opportunitieswebsite.

Point of Contact
Julie Staveland
State Energy Program Specialist
Michigan Department of Environment, Great Lakes, and Energy
StavelandJ@michigan.gov

Natural Gas Fueling Station Air Quality Permit Exemption

The Michigan Department of Environmental Quality requirement to obtain an installation permit does not apply to qualified natural gas, hydrogen, and propane storage and handling equipment at dispensing facilities. (Reference Michigan Air Pollution Control Rule 336.1284)

Alternative Fuel Vehicle (AFV) Emissions Inspection Exemption

Dedicated AFVs powered by compressed natural gas, propane, electricity, or any other source as defined by the Michigan Department of Transportation are exempt from emissions inspection requirements. (Reference Michigan Compiled Laws 324.6311 and 324.6512)

Natural Gas Vehicle (NGV) Weight Exemption

A vehicle primarily powered by natural gas may exceed the state's axle and weight loading limits by a weight equal to the difference between the weight of the vehicle with the natural gas tank and fueling system and the weight of a comparable vehicle with a diesel tank and fueling system. The NGV maximum gross weight may not exceed 82,000 pounds. (Reference Michigan Compiled Laws Section 257.722)

Utility/Private Incentives

Electric Vehicle Supply Equipment (EVSE) Rebate - Consumers Energy

The Consumers Energy PowerMIDrive program offers rebates to residential and commercial customers who install Level 2 or direct current (DC) fast EVSE. Residential customers are eligible for a $500 rebate to install a qualified Level 2 EVSE. Commercial customers installing qualified, publicly accessible EVSE are eligible for rebates up to $5,000 per Level 2 EVSE and up to $70,000 per DC fast EVSE installed. Rebates are available on a first-come, first-served basis. For more information, see the PowerMIDrive website.

Plug-In Electric Vehicle (PEV) Charging Rate Reduction - Consumers Energy

Consumers Energy offers a special time-of-use rate option for PEV owners. For more information, see the Consumers Energy Smart Hours website.

Plug-In Electric Vehicle (PEV) Charging Rate - Indiana Michigan Power

Indiana Michigan Power offers a special time-of-use rate option to residential customers who own a qualified PEV.

For more information, see the Indiana Michigan Power Rates, Programs & Incentives website.

Plug-In Electric Vehicle Charging Rates - DTE Energy

DTE Energy offers threerate options to qualified residential customers for charging PEVs. For rate information, including how to qualify, see the DTE Energy PEV Rates website.

Electric Vehicle Supply Equipment (EVSE) Rebate – DTE Energy

DTE Energy offers a $500 rebate for the installation of a Level 2 EVSE for qualified residential customers that purchase or lease a plug-in electric vehicle (PEV) and enroll in the PEV Charging Rates. For more information, including eligibility, see the DTE Energy Charging Forward website.

Electric Vehicle Supply Equipment (EVSE) Rebate – Holland Board of Public Works (HBPW)

HBPW offers residential customers a $300 rebate for the purchase of a Level 2 EVSE. The EVSE must be ENEGY STAR certified, wi-fi compatible, and send monthly usage data to HBPW. Residential customers must also enroll in a time-of-use rate. For more information, including application, see the HBPW Residential Rebates website.

Propane Vehicle Conversion Rebate – Michigan Propane Gas Association

Vehicles converted to run on propane that are model year 2015 or newer are eligible for a $4,000 rebate through December 31, 2020. For more information, including vehicle restrictions and requirements, see the Michigan Propane Gas Association Grant Opportunities website.

Laws and Regulations

Alternative Fuel Excise Tax

Alternative fuels are taxed equal to the motor fuel tax on a gallon equivalent basis. Alternative fuels include natural gas, propane, hydrogen, and hythane. A gallon equivalent is defined as 5.660 pounds (lbs.) of compressed natural gas, 6.06 lbs. of liquefied natural gas, 480.11 standard cubic feet of hydrogen, and 162.44 standard cubic feet of hydrogen compressed natural gas. A gallon of propane is measured as 4 quarts or 3.785 liters. (Reference Michigan Compiled Laws 207.1003, 207.1151, and 207.1152)

Alternative Fuel Dealer and Commercial User License

Alternative fuel dealers and alternative fuel commercial users must apply for a license from the Michigan Department of Treasury. Commercial users are defined as those operating vehicles with three or more axles, or two axles and a gross vehicle weight rating exceeding 26,000 pounds, that operate in more than one state. Alternative fuel dealers must pay a license fee of $500 and commercial users must pay a license fee of $50. For the purpose of this requirement, alternative fuels include natural gas, propane, hydrogen, and hythane. (Reference Michigan Compiled Laws 207.1151, 207.1153, and 207.211)

Alternative Fuel Commercial User Tax

An alternative fuel commercial user that has not paid fuel taxes to an alternative fuel dealer must file a monthly report with the Michigan Department of Treasury (Department) to determine taxes owed under Michigan Compiled Laws 207.1152. By the twentieth day of each month, users must file the report detailing the number of gallons or gallon equivalents of alternative fuel consumed during the preceding month. Alternative fuel commercial users must pay the full amount of tax due to the Department at the time of filing the report. (Reference Michigan Compiled Laws 207.1154)

Plug-In Electric Vehicle (PEV) Fee

In addition to standard registration fees, PEVs, including all-electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) with a minimum battery capacity of 4 kilowatt-hours, are subject to an annual fee. The specific fees are as follows:

Vehicle TypeGross Vehicle Weight RatingFee
PHEV8,000 pounds (lbs.) or less$30
PHEV> 8,000 lbs.$100
EV8,000 lbs. or less$100
EV> 8,000 lbs.$200

PHEV fees will increase by $2.50 per $0.01 that the state motor fuel tax exceeds $0.19 and EV fees will increase by $5.00 per $0.01 that the state motor fuel tax exceeds $0.19.

(Reference Michigan Compiled Laws 257.801)

Biodiesel Retail and Storage Requirements

All biodiesel and biodiesel blends sold in Michigan must meet state fuel quality requirements, including ASTM D6751 specification. A refiner, distributor, or retailer cannot transfer or dispense biodiesel or biodiesel blends unless the fuel is visibly free of undissolved water, sediments, and other suspended matter. Additionally, a biodiesel retailer may not sell biodiesel or biodiesel blends drawn from a storage tank that has more than two inches of water or water-alcohol at the bottom. Any retailer of biodiesel or biodiesel blends must obtain a license from the Michigan Department of Agriculture for each operating retail location. (Reference Michigan Compiled Laws 290.642 - 290.647)

Hydrogen Production and Retail Requirements

All hydrogen fuel produced and sold in Michigan must meet state fuel quality requirements. Any retailer offering hydrogen fuel for sale in the state must register with, and obtain approval from, the Michigan Department of Agriculture (MDA). A hydrogen retailer must also obtain a license from the MDA for each operating retail outlet. (Reference Michigan Compiled Laws 290.642 - 290.647)