Ann Arbor, MI Solar Panels
Solar Power in Ann Arbor
Ann Arbor homeowners are paying more for electricity than ever. Michigan rates have risen 19% since 2020, now averaging 19.29 cents per kWh — well above the national average. Solar is helping many residents spend less and plan ahead.
This guide walks you through home solar panels and what solar installation in Ann Arbor actually looks like — from how the process works to what you can realistically expect to save.
How Much Do Solar Panels Cost in Ann Arbor, MI?
Based on real installations across Ann Arbor, Ypsilanti, Saline, and Dexter, this calculator uses local data to estimate your solar costs. See what homeowners in your area are actually paying.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Michigan electricity rates have risen 19% since 2020, now averaging 19.29¢/kWh — well above the national average, making solar a smart way to reduce your bill.
- Ann Arbor homeowners can save an average of ~$40,000 over 25 years with solar, with monthly savings starting around $92 for a typical medium-sized home.
- No upfront cost? No problem. Palmetto’s LightReach lease lets Ann Arbor homeowners go solar for as little as $73/month — no purchase required, maintenance included.
Ann Arbor Electricity Prices
Ann Arbor homeowners are paying more for electricity than ever — and Michigan rates are climbing faster than the national average.
Michigan’s electricity rate rose from 17.5 cents per kWh in 2021 to 19.3 cents in 2024 — a roughly 10% increase in just three years, and well above the national average of 16.5 cents per kWh.
Solar can help reduce your dependence on the grid. With home solar panels, Ann Arbor homeowners generate their own clean energy — helping offset rising utility costs month after month.
Because electricity rates have historically trended upward, going solar locks in a more predictable energy cost over time — helping homeowners protect against future rate increases and reduce their monthly bills for years to come.
Price of Energy: Michigan vs National Average
Ann Arbor Area Utility Providers
Ann Arbor runs primarily on DTE Energy. Based on the most recent available data (2023), DTE Energy charges 19.7¢ per kWh — higher than both the Michigan state average of 18.80¢ and the national average of 16.0¢.
DTE Energy’s rates exceed state and national averages partly due to Michigan’s aging grid infrastructure and higher transmission costs. These factors push local electricity bills above what most U.S. households pay each month.
When local rates run this high, home solar in Ann Arbor can offset a meaningful portion of your bill. Generating your own power helps reduce dependence on grid pricing — and adds long-term cost predictability to your energy budget.
Ann Arbor Utilities Electricity Rates
Michigan Solar Incentives
Ann Arbor homeowners have access to several solar incentives in Michigan that can meaningfully reduce the cost of going solar.
DTE Energy’s Solar Currents Program offers Ann Arbor residents an upfront rebate of $2.40/watt plus a 20-year production incentive. The Michigan Saves loan program provides low-interest financing up to $50,000 for eligible homeowners.
Note that the federal 30% residential tax credit was eliminated by the Big Beautiful Bill. State and local incentives still apply. With a LightReach lease, Palmetto handles the commercial ITC and passes savings through lower monthly payments.
| Incentive | Type | Description | Source |
|---|---|---|---|
| DTE Energy Solar Currents Program | Rebate | DTE Energy offers residential solar customers an upfront rebate of $2.40/watt plus a 20-year production incentive of $0.11/kWh for all solar electricity generated. | |
| Michigan Saves Home Energy Loan Program | Rebate | Michigan Saves offers low-interest fixed-rate loans of $1,000–$50,000 with terms up to 15 years to help homeowners finance residential solar installations. | |
| PACE Financing – Lean & Green Michigan (Commercial/Property Owners) | Rebate | Lean & Green Michigan’s PACE program allows commercial, industrial, agricultural, and multifamily property owners to finance solar installations with no upfront costs, repaid through property tax assessments over up to 25 years. |
DTE Energy’s Solar Currents Program is one of the most generous utility solar incentives in Michigan. Eligible residential customers receive an upfront rebate of $2.40 per watt of installed solar capacity, plus a long-term production incentive of $0.11 per kilowatt-hour (kWh) for all solar electricity generated under a 20-year contract. For a typical 7 kW residential system, the upfront rebate alone could amount to approximately $16,800.
The program is available to residential customers within DTE Energy’s service territory, which includes Ann Arbor and surrounding areas in southeastern Michigan. Solar systems must be purchased outright or financed — leased systems may not qualify for the rebate.
Residents of Ann Arbor interested in the program can contact DTE Energy directly at (313) 235-4786 or by emailing [email protected]. It is recommended to confirm current program availability and funding status before installation, as utility rebate programs can change.
Michigan Saves is a nonprofit energy finance organization that offers low-interest, fixed-rate loans to homeowners looking to install solar panels and other renewable energy systems. Loan amounts range from $1,000 to $50,000, with current interest rates between 4.44% and 7.90% APR and repayment terms of up to 15 years.
This program turns a large upfront solar investment into manageable monthly payments, making solar accessible to homeowners in Ann Arbor who may not have the cash on hand to purchase a system outright. Financing through Michigan Saves also allows homeowners to retain ownership of their system — which is required to claim other incentives such as the property tax exemption and MIRECS RECs.
Michigan Saves works with a network of approved lenders and contractors across the state. Visit michigansaves.org to find a participating lender, check current rates, and apply for financing for your solar project.
The Property Assessed Clean Energy (PACE) Financing Program, administered by Lean & Green Michigan, enables commercial, industrial, agricultural, and multifamily property owners to finance solar PV installations with no upfront out-of-pocket costs. Repayment is structured as an assessment on the property tax bill, spread over a term of up to 25 years.
PACE financing is particularly well-suited for businesses and property owners in Ann Arbor who want to invest in solar energy without making large capital expenditures. Because repayment is tied to the property rather than the owner, the obligation can transfer to a new owner if the property is sold, which can be an important consideration when planning a long-term solar investment.
To participate, property owners must be located in a Michigan municipality that has adopted the PACE program. Contact Lean & Green Michigan directly to confirm your property’s eligibility, explore financing terms, and 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 gets cold, cloudy winters, but its sunny summers balance things out. Like Boston or Seattle, the right solar system can still make Ann Arbor a smart choice for clean energy.
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 thousands of solar installations across the U.S. — including right here in Ann Arbor. Explore the heatmap below to see which neighborhoods and communities have already made the switch to solar. Click any hexagon to see how many of your neighbors have gone solar!
Leasing Solar Panels
If you’re not ready to purchase solar panels outright, Palmetto offers an alternative through LightReach — a Power Purchase Agreement (PPA) available to Ann Arbor homeowners served by DTE Energy and Consumers Energy, the two primary utility providers in the area.
With a PPA, you don’t own the system — Palmetto does. Instead of paying a large upfront cost, you simply pay for the solar electricity your panels produce at a set rate per kilowatt-hour (kWh). Because solar panels generate more power in summer than winter, your PPA bill will naturally be higher in summer months (when you’re also saving the most on your utility bill) and lower in winter. On average, the savings over a full year are comparable to what you’d see with a fixed monthly lease payment.
Compared to a cash purchase, a PPA means no upfront investment, no maintenance responsibilities, and no repair costs — Palmetto handles all of that. If your system underperforms, Palmetto’s 90% production guarantee has you covered. To learn more about how a PPA compares to buying solar outright, visit palmetto.com/solar-buy-or-lease.
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
Yes, solar makes sense for many Ann Arbor homeowners. Michigan electricity rates have risen 19% since 2020, now averaging 19.3¢/kWh — well above the national average. With 4.4 peak sun hours per day and DTE Energy’s Solar Currents rebate program, a typical Ann Arbor home can save around $40,000 over 25 years.
Upfront cost doesn’t have to be a barrier. Palmetto’s LightReach lease lets Ann Arbor homeowners go solar with no money down, starting at $73/month — with savings beginning from day one and Palmetto handling all maintenance.
Ann Arbor does not have traditional net metering. Most Ann Arbor homeowners are served by DTE Energy, which uses a Net Billing (Export Credit) program instead. Under this policy, all electricity you use from the grid is billed at the full retail rate, while excess solar energy you send back to the grid is credited at a lower rate — approximately 8.5¢/kWh off-peak and ~14¢/kWh during summer peak hours (4–7pm).
Unused export credits roll over month-to-month as a dollar amount and can be applied to future supply charges. Because credits are earned at less than the retail rate, self-consuming your solar energy — using it directly in your home rather than exporting it — provides the greatest financial benefit for Ann Arbor homeowners.
Yes, solar panels can increase your home value in Ann Arbor. According to a Zillow study, homes with solar panels sell for approximately 4.1% more than comparable homes without them. For a $400,000 home in Ann Arbor, that’s roughly $16,400 in added value.
Michigan’s rising electricity rates — now averaging 19.3¢/kWh — make solar-equipped homes increasingly attractive to buyers. Note that owned systems (not leased) typically contribute to home value, since the buyer inherits the system’s benefits directly.
With Palmetto’s LightReach lease, Ann Arbor homeowners can go solar for as little as $73/month with no upfront cost — Palmetto owns and maintains the system.
If you prefer to purchase outright, a typical 6.38 kW system costs around $20,340 before any incentives. Note that the federal 30% residential tax credit is no longer available for cash purchases following the Big Beautiful Bill. Use the calculator above for a personalized estimate based on your home size.
For many Ann Arbor homeowners, solar can make strong financial sense — especially with Michigan electricity rates averaging 19.3¢/kWh and rising. A typical home can save around $40,000 over 25 years.
With Palmetto’s LightReach lease, there’s no upfront investment required. Most homeowners start saving from day one, since the monthly lease payment — starting at $73/month — is typically less than their current electricity bill. Palmetto handles all maintenance, so there are no surprise costs.
Palmetto Solar is a strong choice for Ann Arbor homeowners. We’re a national company with a genuine local presence — completing 826 installations across Michigan since 2020. Our vetted install network ensures quality workmanship, and we back every system with a 90% production guarantee.
We also offer some of the most flexible financing in the industry, including our LightReach lease starting at $73/month with no upfront cost. Whether you lease or purchase, Palmetto makes going solar in Ann Arbor straightforward and transparent.
Palmetto’s LightReach is an all-inclusive solar lease — one monthly payment covers the system, installation, monitoring, maintenance, and a 90% Production Guarantee. There is no upfront cost. For a typical 6.38 kW system in Ann Arbor, the estimated monthly payment is approximately $73/month.
Because Palmetto owns the system, it claims the commercial Investment Tax Credit (ITC) and passes those savings to homeowners through lower monthly payments. Most Ann Arbor homeowners start saving immediately, since the lease payment is typically less than their current electricity bill.