Detroit, MI
Solar in Detroit
Detroit homeowners are embracing solar installation as Michigan’s electricity prices have surged 19% since 2020, now reaching 19.29 cents per kWh. Investing in quality home solar panels offers substantial long-term savings despite the state ranking 28th for residential solar adoption.
Ready to discover how solar installation works in the Motor City? Let’s explore available incentives, system requirements, and how to determine if solar power is the right choice for your Detroit home.
Key Takeaways
- Detroit homeowners can save $40,487 over 25 years with solar panels despite Michigan receiving less sunlight than southern states.
- Michigan’s electricity rates have increased 19% since 2020, making solar an increasingly attractive investment for Detroit residents.
- The 30% federal tax credit saves Detroit homeowners $6,102 on average when installing a typical residential solar system.
Solar Cost Calculator
Discover the real cost of solar installation in Detroit with Palmetto’s exclusive calculator. Using actual installation data from Detroit, Dearborn, Royal Oak, and other metro areas, we provide accurate estimates tailored to your home. Make informed decisions about clean energy with local, reliable information.
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Estimated Investment and Savings
Based on Palmetto Solar installations in Michigan. Current electricity rate: 19.3¢/kWh. Assumes 70% credit of retail rate.
Detroit Electricity Prices
Detroit residents face electricity costs consistently higher than the national average, with local rates now at 19.3 cents per kWh in 2024.
Michigan’s electricity rates have steadily climbed from 17.5 cents in 2021 to 19.3 cents in 2024, consistently outpacing the national average by nearly 17% – putting additional strain on Detroit household budgets.
Solar installation offers Detroit homeowners a practical solution to these rising costs. By generating clean electricity on-site, residents can significantly reduce their dependence on increasingly expensive grid power.
With a typical solar system lifespan of 25+ years, Detroit homeowners who invest in solar today lock in energy savings that become increasingly valuable as utility rates continue their upward trend.
Price of Energy: Michigan vs National Average
Detroit Area Utility Providers
In Detroit, DTE Energy is the primary utility provider, charging 19.7¢ per kWh in 2023—higher than both Michigan’s average (18.80¢) and the national average (16.0¢).
Detroit residents face electricity costs 23% above the national average due to aging infrastructure maintenance, regional energy demand, and Michigan’s transition from coal to cleaner energy sources.
With DTE’s rates consistently trending upward, solar installation offers Detroit homeowners a stable alternative, potentially locking in lower energy costs while reducing dependence on the grid.
Detroit Utilities Electricity Rates
Michigan Solar Incentives
Detroit homeowners can significantly reduce solar installation costs through federal tax credits and solar incentives in Michigan, making clean energy more accessible than ever.
Michigan offers two key incentives: a Property Tax Exemption that prevents your property taxes from increasing after installing solar, and the Distributed Generation Program that credits you for excess electricity production.
These incentives can change over time, so researching current options is essential. Take advantage of these opportunities soon to maximize your savings on Detroit solar installation.
Save an average of
$6,102
in solar rebates in Michigan
| INCENTIVE | TYPE | DESCRIPTION | SOURCE |
|---|---|---|---|
| Residential Clean Energy Credit | Federal tax credit | A federal tax credit worth 30% the cost of a solar panel system in the year it’s installed | Learn More |
| 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 |
The Residential Clean Energy Credit lets people claim a tax credit worth 30% the cost of a solar panel system in the year it’s installed. The credit can only be used against taxes you owe or have already paid that year, but any excess credit can be rolled over to future years.
The credit is broadly available, though there are a few restrictions — you must own the panels and they must be on a house you live in — so be sure to consult a tax professional about your situation.
Michigan’s Property Tax Exemption for solar energy systems allows authorities to issue bonds and notes to finance renewable energy projects without increasing the property tax burden on homeowners. This incentive, established under Act No. 102 of 2022, enables local authorities to fund the acquisition, construction, and installation of clean energy equipment while keeping costs manageable for residents.
The financial benefit comes through the authority’s ability to borrow money and issue bonds without necessarily raising property taxes on homeowners who install solar systems. While the act doesn’t specify exact dollar amounts, it limits the authority’s borrowing to no more than 5% of the state equalized valuation of taxable property within its jurisdiction. This program has no specified end date as it went into effect on June 14, 2022. Homeowners should note that if their municipality withdraws from an authority, any taxes imposed before the withdrawal would continue until the bonds are paid in full.
Michigan’s Distributed Generation Program (Net Billing) is a solar incentive that allows homeowners with solar panels to receive credits for excess electricity they send back to the grid. Unlike traditional net metering which credits exports at the full retail rate, this program credits exported electricity at a lower rate that varies by utility. When your solar system produces more electricity than you’re using, that excess is sent to the grid and you receive a credit on your bill based on your utility’s specific export rate.
The financial benefit varies by utility company: DTE Energy customers receive approximately 8.5 cents per kWh during off-peak hours and about 14 cents during summer peak hours (4-7pm). Consumers Energy provides between 9-16 cents per kWh depending on season and time of day, with highest values during summer peak (2-7pm). Indiana-Michigan Power offers 12.4 cents per kWh, while Lansing Board of Water & Light provides approximately 6-10 cents per kWh plus an additional 1.3 cents for the first 5 years. All utilities allow excess credits to roll over month-to-month as dollar amounts that can be applied to future bills, with settlements occurring monthly.
While there are no specific eligibility requirements mentioned for residential systems, homeowners should be aware that the program structure means you’ll save the most money by using solar electricity directly in your home rather than exporting it to the grid. This makes it beneficial to time high-energy activities during peak solar production hours when possible. Before installing solar, it’s advisable to check with your specific utility for any system size limitations or additional requirements that may apply to your property.
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 QuoteDetroit 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.
Despite Detroit’s cloudy reputation, its seasonal sunlight patterns and moderate temperatures can support efficient solar production with properly designed systems.
Solar Production in Detroit 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 Installations in Detroit
Discover Detroit’s solar revolution! We’ve mapped every solar installation in the city, allowing you to explore which neighborhoods are leading the clean energy transition. See how many of your neighbors have already made the switch to solar power in this interactive heatmap of Detroit’s growing solar community.
Leasing Solar Panels
In Detroit, DTE Energy customers have access to Palmetto’s LightReach Power Purchase Agreement (PPA). With this option, you pay only for the electricity your solar panels produce at a predetermined rate per kilowatt-hour, typically lower than utility rates.
The PPA model eliminates upfront installation costs and ongoing maintenance responsibilities. Palmetto handles all system maintenance, monitoring, and repairs throughout the agreement term, providing peace of mind compared to purchasing a system outright.
This option is particularly beneficial for Detroit homeowners who want immediate savings without a large initial investment. While DTE Energy customers can access PPAs, those with Indiana-Michigan Power or Lansing Board of Water & Light don’t currently have this option. Learn more about whether to buy or lease solar panels for your specific 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 sense in Detroit despite receiving less sunlight than southern states. With Michigan’s electricity rates increasing 19% since 2020, solar installation offers Detroit homeowners significant long-term savings.
A typical Detroit solar system can save homeowners approximately $40,487 over 25 years. The 30% federal tax credit and property tax exemption make the initial investment more affordable, while protecting against future utility rate increases.
Detroit no longer has traditional net metering. Instead, DTE Energy offers a Net Billing program where customers receive approximately 8.5¢/kWh during off-peak hours and 14¢/kWh during summer peak hours (4-7pm) for excess energy sent to the grid.
Excess credits roll over monthly as dollar amounts applied to future bills. This program replaces the previous 1:1 net metering system with a value-based approach that still provides financial benefits for solar system owners.
Yes, solar panels do increase home value in Detroit. According to a Zillow study, homes with solar panels sell for approximately 4.1% more than comparable homes without solar systems.
For the median Detroit home value, this translates to an increase of about $4,000-$8,000. This added value, combined with Michigan’s property tax exemption for renewable energy systems, makes solar an attractive investment for Detroit homeowners.
In Detroit, the average cost of a medium-sized 6.38 kW solar system is around $20,340 before incentives. After applying the 30% federal tax credit of $6,102, the final cost drops to approximately $14,238.
System prices vary based on home size, with small homes (5.10 kW) averaging $11,721 and larger homes (9.13 kW) around $19,653 after incentives. Most Detroit homeowners see payback periods of 10-11 years.
Yes, solar is financially worthwhile in Detroit despite the city’s northern location. With electricity rates 19% higher than the national average at 19.3¢/kWh, a typical system pays for itself in 10-11 years.
The 30% federal tax credit reduces costs significantly, and homeowners can save approximately $40,487 over 25 years. Solar also increases property values by about 4.1% while protecting against future utility rate increases.
As a national company with strong local presence, we at Palmetto have completed over 826 installations in Michigan since 2020. We combine industry-leading financing options with an extensive installation network to deliver exceptional solar solutions.
Our comprehensive approach includes system design, permitting, installation, and ongoing monitoring—all backed by our commitment to quality and customer satisfaction throughout Detroit and surrounding areas.