ANN ARBOR — Like others living in Ann Arbor’s Bryant neighborhood, Todd Jensen has heard plenty of pitches from solar salesmen.
Their quotes came in as low as $30,000 and as high as $70,000 for an array that would power his home, garage, electric vehicle charger and hot tub.
“We see the solar people come along, and it’s like, ‘I don’t even want to talk to them, because I know I can’t afford it,'” Jensen said.
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He thought twice when he noticed solar arrays going up around the neighborhood. A few weeks later, solar panels sat on the roof of Jensen’s home and the two he and his wife rent to tenants.
Jensen and his neighbors were among the first Ann Arbor residents to enroll in the city’s Sustainable Energy Utility, an ambitious and unusual program launched by the city in 2024 to offer people a way to access renewable power without the upfront cost. The city’s utility pays for the upfront costs of buying and installing the equipment. Residents pay a monthly fee and get to use the free power to offset their DTE Energy Co. bills.
The utility kicked off its services this year with a pilot project in the Bryant neighborhood, widely known as one of Ann Arbor’s few affordable areas.
“The model of utility that the Ann Arbor Sustainable Energy Utility … has not been tried anywhere else,” said Shoshannah Lenski, SEU executive director. “We’re the first of its type in the nation. So we’re figuring this out as we go, which is part of why we’re doing a pilot here in this neighborhood. We’re learning from it, and in 2027, we’ll be expanding city-wide.”
The idea to start a new power provider was born out of the city’s goal to eliminate Ann Arbor’s carbon emissions by 2030. To do it, the city needed to deploy renewable power faster than the investor-owned DTE, which serves Washtenaw County and southeast Michigan.
The SEU doesn’t replace DTE. Instead, it’s a secondary utility that helps residents access renewable energy for their households. The panels help residents reduce planet-warming carbon emissions, reduce the amount of electricity they buy from DTE and protect against power outages.
It’s an unusual approach for cities, which frequently develop climate action plans but rarely deploy such wide-ranging programs.
“Ann Arbor is not unique in terms of trying to reach carbon neutrality,” said Warren Leon, executive director of the Clean Energy States Alliance. “Having said that, Ann Arbor is a leader in terms of being especially ambitious and especially creative in what they’re doing and having quite wide-ranging initiatives.”
“They’re not just focusing on solar; they’re not just focusing on batteries; they’re also doing things with network geothermal. I do think they are both perceived and in actuality a national leader among municipalities.”
The average solar panel installation for an American home costs between $22,000 and $26,000, according to SolarReviews, an outlet that reports on home solar and develops cost calculators and other consumer resources. Arrays typically pay themselves off within 10 years and provide electricity for 15 years.
When arrays are installed, the power they generate is free, which reduces the amount of power residents have to buy from the grid. The panels produce more power when they aren’t shaded by trees and during summer when days are longer, sunshine is brighter and panels are never coated with snow. If they generate more energy than a household needs while the sun is shining, that energy can be stored in a battery and used when it’s dark or cloudy.
Ann Arbor residents who get panels through the SEU won’t have to pay those upfront costs, and most will save on their annual energy spending, Lenski said. Roughly a third of homeowners in the Bryant neighborhood have signed up for the program.
That’s clear from a short walk through the winding cul-de-sacs. House after house is topped with panels.
“You should have been on my street earlier today,” said Elaine Jordan, a Bryant neighborhood resident who signed up for the program, in mid-August. “Next door they were getting insulation, two doors down they’re getting a roof. It’s like the whole street is full as the neighborhood is being upgraded.”
The Bryant pilot program’s startup costs were funded by more than $8 million in grant funding from the Michigan Public Service Commission and the Michigan Department of Labor and Economic Opportunity. The U.S. Department of Energy also granted Ann Arbor $10.8 million to work toward building a neighborhood-wide geothermal system, which would offset homes’ heating and cooling costs. The city will have to match those Department of Energy funds.
Grant funding paid for some additional programs in the Bryant neighborhood. In addition to solar and battery systems, people who enroll can get a home energy assessment and upgrades like insulation or a new roof.
Residents who enroll in the utility also fund the program through monthly fees of $75 in the summer and $25 in the winter. They don’t have to pay upfront costs for their renewable power systems — the city owns the panels, so it buys them and pays for installation. Residents get to use the solar power, and most are projected to get enough free renewable power to see annual savings on their DTE Energy Co. bills.
The savings can be modest and depend on each home. The average savings are projected to be about $200 per year, Lenski said.
The panels on Jensen’s home on Champagne Drive are projected to save $130 per year, between savings on DTE bills and fees paid for enrolling in the program. The panels will provide about half the home’s annual power usage, Lenski said.
“We were surprised at how economical it was,” Jensen said of the solar program. “Cost is a big barrier for most people, even if there is a payback in it.”
Solar panels and a battery do more than offset DTE bills, Lenski said. She said many of the people who have enrolled in the SEU so far are as keen on protecting against power outages as they are on saving money and reducing their personal carbon emissions.
Solar panels generate power even when the grid is down, and extra energy saved in a battery could help people keep their fridges or medical equipment powered.
“Power is not a nice-to-have luxury product. It really is a necessity,” Lenski said.
“If you think ‘I’m going to save one fridge full of food every year, or not have to go spend a night in a hotel, or refill a prescription,'” it adds to the value of the program, she said. “People will save money and have much improved quality of life from it.”
Michigan’s utilities were among the least reliable in the nation’s in 2023, according to a 2025 performance report from the Michigan Citizens Utilities Board. Outages in Michigan lasted longer than in almost every other state, a figure driven primarily by DTE and Consumers Energy outages. At the same time, the cost of power in Michigan is relatively high, the board found.
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Jensen’s power went out in early September when storms swept through southeast Michigan and cut the lights to roughly 280,000 homes. His panels were installed but not connected to the grid yet, since the process requires time for city and DTE workers to do inspections and issue approvals.
“It would have been nice to have solar and a battery backup,” Jensen said. “The outage was about a day and a half that we didn’t have any power, and we were running off generators. Luckily it wasn’t too hot outside, but it would have been nice to have power.”
The economics of renewable energy have changed drastically since Ann Arbor voters approved the SEU in 2024. That was when Democrat Joseph Biden was president, and lawmakers put significant federal funding toward tax incentives and other programs that would help replace planet-warming fossil fuels with renewable energy.
Republican President Donald Trump’s administration canceled or stalled many of those programs. The 2025 budget known as the One Big Beautiful Bill repealed the 30% residential clean energy credit after 2025, although Lenski said the SEU is still eligible for tax credits through next year.
In August, Trump levied tariffs on imports of polysilicon, a crucial component in building solar panels. China produces much of the global solar panel supply.
“There’s a lot of domestic solar manufacturing that’s happening now, but not enough to meet all of the demand,” Lenski said. “That (tariff) is expected to increase the raw costs of the equipment.
“So there are those types of headwinds, a lot of which are driven politically rather than anything fundamental with the technology.”
Those tariffs are expected to raise the price of equipment by 30%-40%, Lenski said. That will raise the price on each SEU solar array by 3%-4%, which means the utility will have to raise the rates it charges to customers by 3%-4% in response, she said.
The utility is still developing a rate structure that will be paid by residents when the SEU program rolls out city-wide next year.
The SEU’s rates are less likely to increase at the rate of DTE’s, Lenski argued, since the sun will remain free over the lifetime of the solar panels while prices of natural gas and coal will fluctuate.
She also anticipates saving money by buying equipment at scale and designing cookie-cutter solar arrays rather than custom ones for each home. The city also won’t put as much money into sales and marketing that private solar installers do, which she said should bring down the price for city residents who enroll.
While grant money helped the SEU finance its early planning and Bryant neighborhood pilot program, the utility will finance most of its work through selling bonds.
“The SEU needs to borrow money to finance these systems,” Lenski said. “They’re capital intensive up front. That’s what makes it hard for many people to access them, even though we know that over their lifetime they’re economically viable and even pay back for many folks.
“But the bond markets right now are kind of going crazy and the rate at which we’re going to be able to borrow is going to be really critical to the success here.”
ckthompson@detroitnews.com

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