Ann Arbor, MI Solar Installation: 2026 Costs, Incentives & Savings
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.
Michigan by the Numbers
- 28th Most residential solar in the United States
- 21 Households have installed solar panels
- 4.4 Avg peak sun hours per day
- ~$43k Ann Arbor average savings over 25 years
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.
| Home Size | System Size | Monthly Payment |
|---|---|---|
| Small Home | Up to 2,000 sq ft | $78/mo |
| Medium Home | 2,000-3,000 sq ft | $78/mo |
| Large Home | Over 3,000 sq ft | $78/mo |
Recommended System
- System Size: 6.80 kW
Cost Breakdown
- System Cost: $21,521
- Price per Watt: $3.16
- Final Cost: $21,521
Savings
- Monthly Savings: Average utility bill reduction $98
- Payback Period: 14.6 years
- 25-Year Savings: $42,968
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.
Price of Energy: Michigan vs National Average
| Year | Michigan | US Average |
|---|---|---|
| 2021 | 17.5¢ | 16.5¢ |
| 2022 | 18.8¢ | - |
| 2023 | 19.3¢ | - |
| 2024 | - | - |
Source: US Bureau of Labor Statistics, Energy Information Administration, Form 861
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.
Ann Arbor Utilities Electricity Rates
| Provider | Rate |
|---|---|
| DTE Energy | 19.70¢ |
| Consumers Energy | 18.80¢ |
| MI Average | 18.80¢ |
| US Average | 16.0¢ |
Source: US Energy Information Administration, 2023, Form 861, Table 6
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.
| 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) | 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 a period of up to 25 years. |
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Michigan incentives.
Ann 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
System Size:5 kW | 7 kW | 10 kW
Energy Production (kWh/day)
What Can Your Solar System Power?
Summer Production (July)
- 49.1 kWh/day
In July, your 10 kW system could power:- 3.3 average homes (15 kWh/day per home)
- or Run central AC for 16 hours AND power all other appliances
- or Fully charge 4.9 Tesla Model 3 electric vehicles
Winter Production (December)
- 16.7 kWh/day
In December, your 10 kW system could power:- 1.1 average homes (15 kWh/day per home)
- or Keep your home heating system running for 8 hours
- or Fully charge 1.7 Tesla Model 3 electric vehicles
Annual Production
- 12,835 kWh/year
Over a year, your 10 kW system could:- Offset 9 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 154 trees
Solar 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.
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.
Frequently Asked Questions
Does Ann Arbor, MI have net metering?
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.
Do solar panels increase your home value in Ann Arbor, MI?
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.
How much does it cost to go solar in Ann Arbor, MI?
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.
How does leasing solar work and what’s the approximate cost in Ann Arbor, MI?
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.
With a typical 6.80 kW system in Ann Arbor, the estimated payment is about $78/month.
Does solar make sense in Ann Arbor, MI?
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.
How much electricity can a solar system produce in Ann Arbor, MI?
In Ann Arbor, a typical home solar system produces roughly 1,280 kWh per year for every kilowatt installed.
What solar incentives are available in Ann Arbor, MI?
Ann Arbor homeowners can take advantage of several Michigan solar incentives.