Ann Arbor Launches City-Owned Solar and Battery Program to Cut Electric Bills for Residents

Electric bills are rising in Ann Arbor, Michigan, mirroring trends across the country. To combat this, the city has launched a new program to install city-owned solar panels and batteries on residential rooftops—a move that could save participating residents hundreds of dollars annually.

The first installations are already underway. For homeowners like Bruce Schauer, 80, the program offers a lifeline. “Any other way, I couldn’t afford to do it,” Schauer says. After his system is installed in the coming weeks, he expects to save around $400 per year on his electric bills. “I’ve looked into solar in the past, but the upfront cost is huge,” admits Myles Burchill, another resident slated to receive a system. “With this opportunity, we don’t own the panels, but we get the benefits of lower rates. And if we don’t use all the electricity, the local utility could pay us.”

Pilot Program Targets 150 Homes in 2024

The initial phase focuses on Ann Arbor’s lower-income Bryant neighborhood, where approximately 150 homes will receive solar and battery installations this year. The program is designed to scale rapidly: 1,000 homes in 2025, followed by several thousand annually in subsequent years.

This initiative is the cornerstone of the city’s new Sustainable Energy Utility (A2SEU), which aims to accelerate the transition to renewable energy on the grid. “It’s bringing clean, affordable, and resilient energy to residents quickly—especially those who need it most and have been traditionally left out of the energy transition,” says Shoshannah Lenski, executive director of A2SEU.

Why Ann Arbor Is Taking a Different Approach

By establishing its own power utility, Ann Arbor can deploy clean energy faster than the existing local provider, DTE Energy. DTE’s current plan targets 100% clean energy by 2050—a timeline that includes gas in its definition of “clean.” Instead of relying on large-scale wind and solar projects, which often face multi-year approval and construction delays, the city is prioritizing a distributed network of rooftop solar, batteries, and geothermal systems across neighborhoods.

As the program expands, bulk purchasing of equipment will help reduce costs. (For the pilot phase, solar panels and batteries are fully funded by a grant.) The city also aims to secure lower installation costs by streamlining the process: installers can efficiently service multiple homes in a single neighborhood, eliminating marketing expenses since the city will source customers directly. Additionally, municipal financing offers a lower cost of capital for debt financing.

“We can use municipal financing, with its lower cost of capital, to take on debt to install these systems,” Lenski explains.

How It Works for Residents

Participants will maintain their accounts with DTE Energy. However, electricity generated by the rooftop solar panels will meet their needs first, with any excess power sent back to the grid. This setup ensures immediate savings on utility bills while contributing to the city’s renewable energy goals.