Ann Arbor, MI Solar Panels
Solar Power in Ann Arbor
Ann Arbor homeowners are exploring solar installation as a practical solution to rising electricity costs. With Michigan electricity prices increasing 19% between 2020 and 2024, solar panels for home use offer long-term savings and energy independence.
This guide covers everything you need to know about solar installation in Ann Arbor—from understanding local incentives to choosing the right system for your home.
How Much Do Solar Panels Cost in Ann Arbor, MI?
Our calculator uses real installation data from Ann Arbor homes—including Ypsilanti, Saline, Dexter, and Chelsea—to show you accurate solar costs for your area. Get personalized estimates based on what your neighbors actually paid, not national averages.
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You can still access the solar tax credit through Palmetto. Talk to us today to find out how.
Key Takeaways
- Ann Arbor solar systems save homeowners an average of $40,000 over 25 years by offsetting rising electricity costs and protecting against future rate increases.
- Michigan’s Property Tax Exemption protects your investment by preventing increased property taxes despite your home’s added value from solar installation.
- Solar works year-round in Ann Arbor with systems producing excellent energy even during Michigan winters, thanks to modern panel efficiency and proper system design.
Ann Arbor Electricity Prices
Understanding electricity costs helps Ann Arbor homeowners make informed energy decisions. Michigan’s rates have risen steadily, impacting household budgets across the region.
Between 2021 and 2024, Michigan electricity rates increased from 17.5 to 19.3 cents per kWh—a 10.3% rise. Ann Arbor residents now pay nearly 17% more than the national average for their electricity.
Solar panels generate electricity at a fixed cost, protecting homeowners from future rate increases. Once installed, your system produces power at the same rate for decades, creating predictable energy expenses.
Over 25 years, solar panels can offset hundreds of thousands of kilowatt-hours of grid electricity. This long-term protection against rising rates makes solar an increasingly valuable investment for Ann Arbor households.
Price of Energy: Michigan vs National Average
Ann Arbor Area Utility Providers
Understanding electricity costs in Ann Arbor starts with knowing your utility provider. As of 2023, Consumers Energy charges 18.8¢ per kWh, while DTE Energy charges 19.7¢ per kWh—both exceeding the national average of 16.0¢.
Michigan’s electricity rates run higher than the national average due to aging infrastructure, transmission costs, and the state’s transition to cleaner energy sources. These factors contribute to Ann Arbor residents paying roughly 17-23% more than the typical American household.
Higher electricity rates make solar installation increasingly practical for Ann Arbor homeowners. By generating your own power, you can offset these above-average costs and protect yourself from future rate increases while reducing your reliance on the grid.
Ann Arbor Utilities Electricity Rates
Michigan Solar Incentives
Michigan offers valuable solar incentives in Michigan that help Ann Arbor residents reduce upfront costs and ongoing expenses when installing solar panels.
The Property Tax Exemption protects homeowners from increased property taxes despite their home’s added value from solar installation. The Distributed Generation Program provides credits when your system produces excess electricity, though rates vary by utility provider.
These programs change periodically as state policies evolve. Research current requirements and act promptly to maximize available benefits for your solar installation.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Property Tax Exemption | State tax exemption | Exempts your solar system’s added value from property tax assessment. Annual savings based on local tax rates. | Learn More |
I apologize, but I need to inform you that the document provided does not describe a solar property tax exemption program. The legislation you’ve shared (Michigan Senate Bill 821, Public Act 102 of 2022) relates to emergency services authorities and their ability to issue bonds and levy taxes for emergency services purposes—it has no connection to solar energy or renewable energy property tax exemptions.
To provide you with an accurate description of Michigan’s solar Property Tax Exemption program, I would need the correct source documentation that specifically addresses renewable energy systems and property tax treatment. Michigan does have solar incentive programs, but they would be covered under different legislation. If you can provide the appropriate documentation for Michigan’s solar property tax exemption, I’d be happy to create a clear, detailed explanation for homeowners.
Michigan’s Distributed Generation Program, also known as Net Billing, is a compensation structure used by major utilities including DTE Energy, Consumers Energy, Indiana-Michigan Power, and Lansing Board of Water & Light. Under this program, you pay the full retail rate for electricity you use from the grid, but receive a lower credit rate for excess solar energy you send back to the grid. This differs from traditional net metering, where exports and imports are valued equally.
The credit you receive for exported solar energy varies by utility and time of day. DTE Energy customers on the Standard Time of Day rate receive approximately 8.5 cents per kWh during off-peak hours and around 14 cents per kWh during summer peak hours (4-7pm). Consumers Energy credits range from 9-16 cents per kWh depending on season and time, with the highest rates during summer peak (2-7pm). Indiana-Michigan Power offers 12.4 cents per kWh for all exports. Lansing Board of Water & Light provides approximately 6-10 cents per kWh, plus an additional 1.3 cents per kWh for the first five years when you transfer renewable energy credits to the utility. Any unused export credits roll over month-to-month as dollar amounts that can be applied to future electricity supply charges. The key financial benefit comes from solar energy you use directly in your home, which avoids purchasing electricity at the higher retail rate.
This program is available to homeowners installing solar systems with participating Michigan utilities. Monthly settlement means your bill is calculated each month based on your energy usage and solar production. Since export credits are valued below retail rates, maximizing your savings means using as much of your solar energy as possible when it’s generated, rather than exporting it to the grid.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Michigan incentives.
Get a Free QuoteAnn Arbor Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Ann Arbor experiences four distinct seasons with varying daylight hours and cloud cover. Despite snowy winters and Great Lakes weather patterns, properly designed solar systems produce excellent year-round energy here.
Solar Production in Ann Arbor by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Panel Systems in Ann Arbor
We’ve mapped every solar installation across the United States to bring you this interactive view of Ann Arbor’s solar landscape. Explore which neighborhoods and communities near you have already made the switch to clean energy!
Leasing Solar Panels
Ann Arbor homeowners have flexible options for going solar. If you’re served by DTE Energy or Consumers Energy, Palmetto offers Power Purchase Agreements (PPAs) through our LightReach program.
With a PPA, you pay for the electricity your solar panels produce at a set rate per kilowatt-hour—typically lower than your utility rate. There’s no upfront cost, and Palmetto handles all maintenance and repairs. Your payments vary by season since panels produce more energy in summer, but you save money year-round compared to grid electricity.
This approach differs from buying a system outright. Instead of managing equipment ownership, loan payments, and maintenance yourself, you simply enjoy immediate savings with no investment required. Learn more about whether leasing or buying solar makes sense for your situation.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes strong financial sense in Ann Arbor. Michigan homeowners save an average of $40,000 over 25 years, with Ann Arbor’s electricity rates running 17% above the national average at 19.3¢/kWh. Despite Michigan’s cloudy winters, modern solar panels produce excellent year-round energy here.
The state’s Property Tax Exemption protects your investment by preventing increased property taxes from your solar installation. With a typical payback period of 14-15 years and systems lasting 25+ years, you’ll enjoy over a decade of essentially free electricity while protecting against future rate increases.
No, Ann Arbor does not have traditional net metering. Michigan utilities including DTE Energy and Consumers Energy use a net billing system where you pay full retail rates for electricity from the grid but receive lower credits for excess solar energy exported back to the grid.
Export credits vary by utility and time of day. DTE Energy credits range from 8.5-14 cents per kWh, while Consumers Energy offers 9-16 cents per kWh depending on season and time. These credits roll over monthly as dollar amounts applied to future bills. Your biggest savings come from using solar energy directly in your home rather than exporting it to the grid.
Yes, solar panels increase home value in Ann Arbor. According to a Zillow study, homes with solar panels sell for approximately 4.1% more than comparable homes without solar. For Ann Arbor’s median home price, this translates to thousands of dollars in added value.
Michigan’s Property Tax Exemption ensures you won’t pay higher property taxes on this increased value, protecting your investment while your home appreciates. Solar panels also make homes more attractive to buyers seeking lower energy costs and environmental benefits.
Solar installation costs in Ann Arbor range from $16,744 to $28,075 depending on system size. A typical medium-sized home (2,000-3,000 sq ft) needs a 6.38 kW system costing approximately $20,340, or about $3.19 per watt.
These costs reflect actual Palmetto installations in the Ann Arbor area. Your final investment depends on your home’s energy usage, roof characteristics, and desired system size. Most homeowners see payback periods of 14-15 years with average monthly savings of $92.
Yes, solar is financially worth it for most Ann Arbor homeowners. With electricity rates at 19.3¢/kWh—17% above the national average—a typical solar system saves approximately $40,000 over 25 years. Your payback period runs 14-15 years, meaning you’ll enjoy over a decade of essentially free electricity.
Michigan’s Property Tax Exemption protects your investment by preventing increased property taxes despite your home’s added value. Solar panels also increase home resale value by approximately 4.1% while protecting you from future utility rate increases.
We’re Palmetto Solar, and we’ve completed 826 installations across Michigan since 2020. As a national company with local expertise, we bring proven solar solutions to Ann Arbor homeowners.
We offer competitive financing options and work with trusted installation partners to deliver quality systems. Our approach combines national resources with personalized service, helping you navigate the solar process from initial consultation through system activation.