How Much Does Solar Actually Save You on Your Utility Bills?

The average Michigan home with solar panels saves between $80 and $150 per month on their electric bill. Over a year, that’s $960 to $1,800 staying in your pocket instead of going to DTE Energy. Over 25 years, you’re looking at $24,000 to $45,000 in savings, and that’s before accounting for electricity rate increases.

Your actual savings depend on how much electricity you use, what size system you install, and how your roof is positioned. Some months you’ll save more than others. Summer bills might drop to almost nothing while winter bills stay higher because your panels produce less power when days are shorter.

What Michigan Homeowners Pay for Electricity

The typical Michigan household uses between 10,000 and 12,000 kilowatt-hours (kWh) of electricity each year. At current DTE rates, that translates to roughly $1,400 to $1,700 in annual electric costs.

Your bill isn’t just the cost of electricity. DTE charges separately for supply (the actual power) and delivery (getting it to your home), plus various fees and taxes. The supply charge currently sits around 10-11 cents per kWh, while delivery adds another 5-6 cents per kWh. Together, you’re paying 15-17 cents per kWh for grid electricity.

DTE’s rates have been climbing steadily. That rate has increased about 3-4% annually over the past decade, and there’s no reason to expect that trend to reverse. Michigan residents pay more for electricity than the national average, partly due to cold winters that drive up heating costs.

Your bills fluctuate throughout the year. Winter months see increased usage from heating, shorter days, and more time spent indoors. Summer brings air conditioning loads. Spring and fall typically offer the lowest bills when heating and cooling needs are minimal.

Solar Panel Bill Savings: Month-by-Month Breakdown

When you install solar panels, they generate electricity that powers your home directly. Every kilowatt-hour your panels produce is one you don’t buy from DTE.

An 8 kW solar system in Michigan generates roughly 9,000 to 10,000 kWh annually. That’s enough to cover most or all of a typical household’s electricity needs. Production varies dramatically by season.

Summer months are your best performers. June and July might generate 1,200 to 1,400 kWh. If your home uses 800 kWh during that period, you’ll send 400-600 kWh back to the grid and receive credits. Your summer electric bill might drop to just the $10-15 monthly connection fee that DTE charges all solar customers.

Winter months are different. December and January cut production to maybe 400-500 kWh per month. If you’re using 1,100 kWh for heating and regular loads, you’ll need to pull 600-700 kWh from the grid. You’ll still have a bill, but it’s significantly smaller than without solar.

Spring and fall strike a balance. Production is decent, and your energy needs are moderate. These months often see bills under $30-40, sometimes lower if you banked credits from summer.

The monthly connection fee sticks around regardless of how much power you generate. DTE charges this to maintain your connection to the grid, which you need when your panels aren’t producing enough power.

Most homeowners end up with annual electric costs between $200 and $500 after installing solar, down from $1,400 to $1,700 before. That’s where the $80-150 monthly savings figure comes from.

DTE’s Distributed Generation Program and Solar Credits

DTE replaced traditional net metering with their Distributed Generation program. When your panels produce more electricity than you’re using, that surplus flows back to the grid. The utility credits your account at about 60-70% of the retail electricity rate. If you pay 16 cents per kWh for grid power, DTE credits you around 10-11 cents per kWh for power you send back.

The key is sizing your system so you use most of the power you generate rather than sending large amounts back to the grid. An 8-10 kW system matched to a household using 10,000-12,000 kWh annually minimizes the gap between what you pay and what you’re credited.

Credits accumulate throughout the year. Those extra kilowatt-hours you generate in June don’t disappear. They sit on your account as credits you can apply against grid usage in December or January. This seasonal banking helps balance out Michigan’s variable weather.

Here’s a real example: You generate 9,500 kWh total and your household uses 11,000 kWh. You pull 1,500 kWh from the grid (mostly in winter), costing about $240. You also sent back maybe 2,000 kWh during summer months, earning roughly $200-220 in credits. Your net cost for the year ends up around $200-250 including connection fees, compared to $1,500-1,700 without solar.

What Determines Your Solar Savings in Michigan

Your actual savings depend on your system size, roof characteristics, shading, and how DTE’s rates change over time. Here’s what matters most.

System size matters most. The sweet spot is a system that covers 80-95% of your annual electricity usage.

Your roof orientation affects production significantly. South-facing sections capture the most sunlight, while east and west-facing sections produce about 15-20% less. North-facing roofs aren’t ideal, but ground-mounted systems can be positioned for optimal production if you have the property space.

Shading from trees during peak sun hours (10 AM to 3 PM) can cut production by 20-30%.

DTE’s rates keep rising. Your solar system locks in free electricity production for 25-30 years, protecting you from those increases.

Battery storage lets you store excess production instead of sending it back to the grid at the lower credit rate. Batteries add upfront cost but increase savings and energy independence.

Home Value and Long-Term Benefits of Solar

Solar panels increase your home’s value. Studies show homes with solar sell for 3-4% more than comparable homes without it. On a $300,000 Ann Arbor home, that’s an extra $9,000-12,000 in sale price.

A typical Michigan solar installation pays for itself in 10-15 years through utility savings alone. After that, you’re generating free electricity for another 10-20 years. The federal tax credit (30% through 2032) shrinks the payback period further.

Energy independence has value beyond the numbers. You’re less vulnerable to rate increases, supply disruptions, and grid issues. During severe weather events, solar homeowners with batteries maintain power while others don’t.

An 8 kW system prevents roughly 8,000 to 10,000 pounds of CO2 emissions annually. Over 25 years, that’s equivalent to planting 200-250 trees or taking two cars off the road.

How Strawberry Solar Maximizes Your Savings

Getting maximum savings from solar starts with proper system design. We don’t sell one-size-fits-all packages. Every home gets a custom analysis based on your actual electricity usage, roof characteristics, and budget.

We install panels from Tier 1 manufacturers with proven track records. Higher-quality panels maintain their output better over 25-30 years, which means more electricity generation and bigger savings over the system’s lifetime.

Our 10-year workmanship warranty protects your investment. That’s on top of the 25-year performance warranties that come with the panels themselves.