Ann Arbor, MI Solar Panels
Solar Power in Ann Arbor
If you live in Ann Arbor, you’ve likely noticed your electricity bills climbing. With Michigan residential electricity rates sitting at 19.29 cents per kWh—well above the national average of 16.6 cents—many local homeowners are exploring a smarter way to power their homes. It also fits neatly with Ann Arbor’s community push toward a more sustainable, carbon-neutral future.
Solar energy offers a practical path forward. This guide walks you through what solar installation in Ann Arbor looks like, and our guide on home solar panels covers even more.
How Much Do Solar Panels Cost in Ann Arbor, MI?
Curious about the cost of going solar in Ann Arbor? Our calculator uses real installation data from homes across the area—including Ypsilanti, Saline, Dexter, and Chelsea—to give you a clear, local estimate. See what solar could look like for your home, based on actual numbers from your neighbors.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Ann Arbor electricity rates are climbing, reaching 19.3¢ per kWh in 2024—well above the 16.5¢ national average—making home solar an increasingly practical option.
- Michigan incentives still help you save through a property tax exemption and low-interest Michigan Saves loans, even though the federal tax credit has ended.
- You can go solar with no upfront cost by leasing through LightReach, where Palmetto owns and maintains the system while you enjoy predictable monthly payments.
Ann Arbor Electricity Prices
If you live in Ann Arbor, you’ve likely noticed your electricity bills climbing. Here’s what’s driving those costs, and how solar fits in.
Michigan electricity rates keep rising. In 2021, residents paid about 17.5 cents per kWh. By 2024, that reached 19.3 cents—well above the national average of 16.5 cents. The upward trend shows few signs of slowing.
Solar gives Ann Arbor homeowners a way to generate their own power. Instead of relying fully on rising utility rates, you produce electricity onsite. Our guide on home solar panels explains how the process works.
Over time, a solar system can help you rely less on grid electricity, offering more predictable energy costs. As local rates continue climbing, understanding this option helps you make an informed decision for your home.
Price of Energy: Michigan vs National Average
Ann Arbor Area Utility Providers
In Ann Arbor, most homes are served by DTE Energy or Consumers Energy. In 2023 (the latest data available), DTE charged 19.7¢ per kWh and Consumers Energy 18.8¢ per kWh.
Both rates sat above the 2023 national average of 16.0¢ per kWh. Michigan’s statewide average was 18.80¢, reflecting higher grid maintenance costs, aging infrastructure, and the state’s colder climate and longer distribution networks.
As these 2023 figures show, local rates run higher than the national average. Solar can help Ann Arbor homeowners produce their own power and add predictability to their energy costs as utility rates continue to change.
Ann Arbor Utilities Electricity Rates
Michigan Solar Incentives
Ann Arbor homeowners can lower solar costs through several solar incentives in Michigan, including a property tax exemption, utility rebates, and low-interest financing options.
Michigan exempts your added home value from property taxes, while utilities like Consumers Energy offer production rebates. Programs such as Michigan Saves also provide affordable loans to help cover installation costs.
While the federal tax credit has ended, these state and local programs remain. Leasing through LightReach can simplify things, since Palmetto handles credits and passes savings along.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Michigan Property Tax Exemption for Solar | Property Tax Exemption | Michigan law exempts the added home value from a solar energy system (up to 150 kW) from property tax assessments, saving homeowners hundreds of dollars per year. | Learn More |
| Michigan Saves – Home Energy Loan Program | Rebate | Michigan Saves offers homeowners low-interest financing for solar and battery storage installations, with loan amounts from $1,000 to $50,000 at rates between 4.44% and 7.90% for terms up to 15 years. | |
| PACE Financing – Lean & Green Michigan (Commercial/Agricultural) | Rebate | Lean & Green Michigan’s PACE program allows commercial, agricultural, and nonprofit property owners to finance solar and battery storage with no upfront costs, repaying through their property tax bill over up to 25 years. |
Michigan’s property tax exemption, established under MCL 211.7hh, ensures that when you install a solar energy system on your home, the increased value it adds to your property is not counted in your tax assessment. This means your property taxes will not go up as a result of going solar — a significant long-term benefit for homeowners in Ann Arbor.
The exemption applies to residential solar systems up to 150 kW in capacity, which covers virtually all home installations (most Michigan residential systems are 8–12 kW). The exemption also covers battery storage equipment paired with your solar system. At Michigan’s average property tax rate of approximately 1.25%, a $25,000 solar system could otherwise add $300–$435 per year to your tax bill — savings that compound to $6,000–$8,700 over a 20-year system lifespan.
This exemption applies automatically statewide and does not require a separate application by the homeowner. It was reinstated in 2019 under Governor Whitmer and remains fully active in 2026.
Michigan Saves is a nonprofit green bank that offers homeowners access to competitive financing for solar panel and battery storage installations. Through its Home Energy Loan Program, Michigan Saves negotiates favorable interest rates with a network of participating lenders, offering current rates between 4.44% and 7.90% APR — often lower than standard home improvement loans or credit cards.
Eligible loan amounts range from $1,000 to $50,000, with repayment terms of up to 15 years, making it possible to finance a full solar-plus-storage system with manageable monthly payments. The program is available to Michigan homeowners statewide, including residents of Ann Arbor, and can be used for new solar installations, battery storage additions to existing systems, or solar system upgrades.
To apply, visit michigansaves.org to find a participating lender and contractor in your area. Michigan Saves-approved contractors have been vetted for quality and can help guide you through both the installation and financing process.
Property Assessed Clean Energy (PACE) financing, administered in Michigan by Lean & Green Michigan, is a powerful tool for commercial, industrial, multifamily housing, agricultural, and nonprofit property owners looking to install solar panels or battery storage with no upfront out-of-pocket costs. Under PACE, the cost of the solar installation is repaid through an assessment added to the property’s tax bill over a period of up to 25 years.
Because repayment is tied to the property rather than the individual borrower, PACE financing can be easier to qualify for than traditional loans and does not require a large down payment. If the property is sold before the loan is repaid, the remaining balance can transfer to the new owner along with the solar system — a feature that can also be a selling point for the property.
PACE is available for commercial, agricultural, and nonprofit properties in Michigan — it is not available for standard single-family residential properties. Contact Lean & Green Michigan directly at leanandgreenmichigan.com to learn more about eligibility, participating lenders, and how to begin the application process.
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 sees cold, snowy winters and sunny summers. While cloudy days happen, longer summer daylight and cool temperatures actually boost panel efficiency, making solar a smart, reliable choice here year-round.
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 solar installations across the country, right down to the neighborhood level. Explore the interactive map below to see how many Ann Arbor homes have switched to solar. Click any hexagon to discover the number of installations nearby—and see how your community is embracing clean energy.
Leasing Solar Panels
Not everyone wants to buy solar panels outright. If you’d rather skip the upfront cost, Palmetto’s LightReach program offers a Power Purchase Agreement (PPA) in Ann Arbor for homes served by DTE Energy and Consumers Energy. With a PPA, you simply pay for the power your system produces at a set rate, rather than a large one-time payment.
Because Palmetto owns the system, we handle installation, monitoring, and maintenance—so there’s no equipment upkeep for you. That’s a key difference from paying cash, where repairs and upkeep fall on you. You can compare buying and leasing to see what fits your budget.
Curious how it works? Learn more about LightReach and start saving as soon as your panels turn on.
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!
Explore LightReach LeasingFrequently Asked Questions
Ann Arbor does not have traditional one-to-one net metering. Instead, both major local utilities—DTE Energy and Consumers Energy—use a net billing (export credit) program. You’re charged the full retail rate for power you use from the grid, while solar energy you export is credited at a lower rate.
DTE credits exports around 8.5–14 cents per kWh depending on time of day and season, and Consumers Energy credits between 9–16 cents. Any extra credits roll over month to month as a dollar amount applied to future bills.
Yes. When you own your solar panels—by purchasing them with cash or a loan—they can increase your home’s value in Ann Arbor. A Zillow study found homes with solar sold for about 4.1% more. Michigan also exempts that added value from property taxes.
This benefit applies to owned systems, not leased or PPA systems like LightReach. With a lease, the buyer may assume the agreement, so resale is handled differently.
Many Ann Arbor homeowners go solar with no upfront cost through a LightReach lease. You pay a low fixed monthly payment—starting around $78/mo for a medium-sized home—while Palmetto owns and maintains the system.
If you prefer to buy, a cash purchase for a typical home runs about $21,500. Note that following the 2025 federal law change, the 30% tax credit is no longer available for residential cash purchases. See the calculator above for pricing based on your home size.
With Palmetto’s LightReach solar lease, one simple monthly payment covers everything: the panels, installation, monitoring, maintenance, and a protection program with a 90% Production Guarantee. There’s no upfront cost to you.
For a typical 6.80 kW system in Ann Arbor, the estimated payment is about $78/month. Since Palmetto owns the system, we claim the commercial tax credit and pass those savings to you. Most homeowners save from day one.
Yes, solar makes sense in Ann Arbor. With Michigan electricity rates at 19.3¢ per kWh—well above the 16.5¢ national average—and 4.4 peak sun hours daily, local homeowners can save around $43,000 over 25 years while gaining more predictable energy costs.
Michigan also offers a property tax exemption and low-interest Michigan Saves loans. With LightReach, Palmetto’s solar lease program, you can remove the upfront cost entirely—going solar with no money down and saving from day one.
In Ann Arbor, a typical home solar system produces roughly 1,280 kWh per year for every kilowatt installed. Based on NREL PVWatts data, a 5 kW system generates about 6,400 kWh, a 7 kW system around 9,000 kWh, and a 10 kW system near 12,800 kWh annually.
Output rises in Michigan’s long, sunny summer days and drops during short, snowy winters. Your actual production depends on your roof direction, tilt, shading, and the season.
Ann Arbor homeowners can take advantage of several Michigan solar incentives. The state’s property tax exemption keeps the added home value from a solar system (up to 150 kW) off your tax assessment, and Michigan Saves offers low-interest loans from $1,000 to $50,000. PACE financing is available for commercial and agricultural properties.
The federal 30% tax credit is no longer available for cash purchases after the 2025 law change. With a LightReach lease, however, Palmetto claims the commercial ITC and passes those savings to you through lower monthly payments.