Michigan Heat Pump Leasing & Installation Guide
In this guide
From snowy Upper Peninsula winters to milder days along the Great Lakes, Michigan’s changing climate calls for home comfort that can adapt. Heat pumps provide efficient heating and cooling in one system, helping homeowners manage year-round comfort while using energy wisely. Palmetto is a trusted partner for heat pump installation in Michigan, offering guidance to help you find a solution suited to your home.
01
Benefits of Palmetto Heat Pumps
Say goodbye to clunky old systems and surprise repairs. Palmetto Comfort Plan gives you a brand-new heat pump, installation, and full support, all wrapped into one subscription.
Year Round Comfort
A high-efficiency heat pump keeps your home cool in summer, warm in winter, and your energy use in check all year long.
Forget the maintenance
With a Comfort Plan subscription, installation and maintenance are fully covered, no surprise bills, no weekend DIY.
Rewards for renewing
Stick with us and earn credits toward your next system upgrade. It’s our way of saying thanks for building a cleaner, comfier future with us.
02
Buy it or finance it. Your comfort, your call
There’s no wrong way to get cozy. Here’s how the options stack up, so you can choose what works best for you.
|
|
Cash |
Loan |
|
|---|---|---|---|
| Payment schedule | $0 upfront, then monthly subscription | Full price upfront | $0 upfront, then monthly payment |
| Term length | 10 or 12 years | None | Variable |
| End of term options | Flexible with 25% renewal term credits to new system | No credits to new system | No credits to new system |
| Maintenance included | |||
| Eligible for incentives |
Cash
Loan
03
Michigan Heat Pump Rebates & Incentives
State and federal incentive programs can significantly reduce the cost of a new heat pump system. Here are the programs available to Michigan homeowners.
Michigan HEAR Rebates
Up to $8,000Michigan’s HEAR rebate pathway helps lower the cost of qualifying high-efficiency electric heat pumps. The heat-pump rebate can be up to $8,000, within a $14,000 household cap.
Michigan HOMES Rebates
Up to $20,000Michigan’s HOMES pathway supports whole-home efficiency upgrades, including heating and cooling systems, with rebate amounts based on modeled energy savings. The maximum household rebate is $20,000.
A2ZERO Home Energy Rebates
Up to $5,500Ann Arbor’s home energy rebate program offers rebates for qualifying cold-climate central or mini-split heat pumps installed in existing homes.
DTE Energy HVAC Rebates
Up to $1,200DTE offers 2026 rebates for qualifying air-source, cold-climate, ground-source, and ductless mini-split heat pumps.
Consumers Energy Home Solutions
$200 – $350Consumers Energy’s 2026 rebates cover qualifying air-source, ground-source, and mini-split heat pumps.
Great Lakes Energy Energy Wise
Up to $2,250Great Lakes Energy offers 2026 residential rebates for qualifying central, mini-split, air-to-water, and ground-source heat pumps.
Michigan homeowners may qualify for 2026 rebates through MiHER HEAR and HOMES, Ann Arbor’s A2ZERO program, and participating utilities including DTE, Consumers Energy, and Great Lakes Energy; availability and eligibility vary by location and program. Federal homeowner heat pump tax credits ended December 31, 2025. Palmetto can help homeowners apply for and maximize eligible rebates.
Incentive information is based on publicly available data as of 2026 and may change. Contact program administrators to verify current availability and eligibility requirements.
Michigan Electricity Prices
Michigan electricity prices are rising—but how much power your home needs for comfort can still make a difference.
From 2021 to 2024, Michigan’s average residential electricity price climbed from 17.5 to 19.3 cents per kWh, remaining above the national average of 16.5 cents in 2024.
A heat pump can deliver heating or cooling with less electricity. It can be two to three times as efficient as traditional HVAC equipment, helping limit the impact of higher rates.
Over time, using less electricity for each unit of comfort can help Michigan homeowners manage energy costs and reduce exposure to future rate increases, with heating and cooling in one system.
Price of Energy: Michigan vs National Average
Michigan Utility Providers
2023 is the latest utility data available; 2024 figures aren’t yet available. Rates ranged from 15.74¢ per kWh at Indiana Michigan Power to 19.70¢ at DTE. Michigan’s average was 18.80¢, compared with the 16.0¢ national average.
DTE was above both averages, while Consumers Energy’s 18.82¢ rate was near the state average. Great Lakes Energy was below the state average but above the national one; Indiana Michigan Power was below both. These figures show the differences, not their causes.
Electricity rates are one part of home energy costs. Because heat pumps use energy efficiently, they may reduce total spending compared with traditional HVAC—even where electricity costs more. Actual savings depend on the home and system.
Michigan Utilities Electricity Rates
Frequently Asked Questions
Yes. Modern cold-climate heat pumps can provide efficient heating through Michigan winters, as well as air conditioning in summer. Performance depends on choosing a model rated for low temperatures and sizing it for the home; some houses may benefit from a backup heating system during the coldest weather.
Michigan electricity costs 19.3¢ per kWh; heat pump operating costs depend on home efficiency, equipment performance, and the fuel replaced. Palmetto offers a Comfort Plan with no upfront cost, predictable payments, and maintenance and repairs for the plan’s life, or direct purchase. State or utility rebates may be available; no federal tax credit applies to heat pumps installed in 2026.
Heat pump installation costs in Michigan vary by home size, insulation, equipment type, and whether existing ductwork needs changes, so there isn’t one statewide price. Get a home-specific quote that separates equipment, labor, and any electrical or ductwork upgrades. Michigan electricity currently averages 19.3¢ per kWh, which also affects operating costs.
Palmetto offers two ways to get a heat pump: the Comfort Plan has $0 upfront cost and a predictable monthly payment, with maintenance, repairs, and warranty coverage included for the plan’s life. Direct purchase means a one-time payment and equipment ownership; homeowners may qualify for state or utility rebates where available. No federal tax credit applies to heat pumps installed in 2026.
For Michigan’s cold winters, strong options include cold-climate models from Mitsubishi Electric, Carrier, Trane, Bosch, and Daikin. There isn’t one best brand for every home: compare heating capacity at low outdoor temperatures, efficiency ratings, noise, warranty terms, and whether the model is sized and installed for your home.
Michigan electricity averages 19.3¢ per kWh, so efficiency and proper sizing can affect running costs; actual bills also depend on weather, home insulation, and backup-heat use. Palmetto offers a Comfort Plan with $0 upfront cost and maintenance and repairs included for the plan’s life, or direct purchase, which gives you ownership and may qualify for available state or utility rebates.
Yes—Michigan homeowners may find heat pump rebates through their electric or gas utility and state energy programs, but offers, funding, equipment rules, and income requirements vary by location and can change. Check current program terms before choosing a system; not every Michigan home or heat pump will qualify.
For heat pumps installed in 2026, no federal 25C or 25D tax credit is available. With Palmetto, direct purchase means you own the system and may qualify for state or utility rebates where available. The Comfort Plan has $0 upfront cost, predictable payments, and maintenance and repairs included; rebate eligibility depends on program rules.
In Michigan, leasing through Palmetto’s Comfort Plan means no upfront cost, a predictable monthly payment, and maintenance and repairs included for the plan’s life, along with warranty coverage. It may suit homeowners who want to avoid equipment upkeep; buying may suit those able to pay upfront and who prefer to own the heat pump outright.
With a direct purchase, you own the heat pump and may qualify for state or utility rebates where available. Michigan’s electricity price is about 19.3¢ per kWh, so compare estimated operating costs for your home alongside the upfront price. No federal heat pump tax credit is available for systems installed in 2026.
A heat pump can be financially worthwhile in Michigan, but savings depend on your home, system, and current heating fuel. At Michigan’s electricity price of 19.3¢ per kWh, compare estimated heat-pump operating costs with your existing furnace or boiler, including fuel, maintenance, and expected equipment life. Insulation and proper sizing also affect performance.
For a 2026 installation, no federal heat-pump tax credit is available. State or utility rebates may reduce purchase costs where programs are active and you qualify. Palmetto’s direct-purchase option requires an upfront payment and gives you ownership; its Comfort Plan has no upfront cost, a predictable monthly payment, and includes maintenance, repairs, and warranty coverage for the plan’s life.
The right heat pump size for a Michigan home depends on its heating and cooling load—not just square footage. An installer should assess insulation, air leaks, windows, ceiling height, duct condition, and local winter design temperatures, then perform a room-by-room load calculation. This helps avoid a unit that struggles in cold weather or cycles inefficiently.
Ask whether the design accounts for Michigan cold snaps and whether the model supplies enough heat at low outdoor temperatures; backup heat may be needed. Palmetto’s $0-upfront Comfort Plan includes maintenance and repairs, while direct purchase means ownership and may qualify for state or utility rebates where available.