City heat pump rebate: $4,000

Home Energy Rebates in Ann Arbor

Ann Arbor is the one Michigan city we cover that pays its own home energy rebates. The city's A2ZERO program pays up to $4,000 for a cold climate heat pump ($5,500 for lower incomes), and also covers insulation, a heat pump water heater, an electrical panel and a battery. DTE Energy rebates sit on top. We read both on October 6, 2026.

What is open for Ann Arbor homes in 2026

Each card names the fact we keep on file. The city's amounts come from its A2ZERO rebates page, and the DTE amounts come from DTE's own pages. The city says rebates cannot be more than 90% of the cost of the measure or project.

Open

A2ZERO cold climate heat pump

$4,000 ($5,500 lower income)

Unit must be listed on the NEEP cold climate list with a 15.2+ SEER2 and 8+ HSPF2 rating. Dual-fuel systems are not eligible. Contractor install, a Manual J sizing report and an AHRI certificate are required.

Open

A2ZERO heat pump water heater

$1,000 ($2,000)

Needs a UEF rating of 2.0 or higher and contractor installation.

Open

A2ZERO insulation and air sealing

$500 per measure ($1,000)

Air sealing is $500 ($1,000) and needs a blower door test before and after with at least 20% less leakage. Combined bonuses are listed on the city page.

Open

A2ZERO electrical panel and battery

$1,000 panel, $2,000 battery

Lower-income amounts are $2,000 and $3,500. A battery must be at least 13 kWh.

Open

DTE heat pump

$150 to $1,200

Only for electric customers replacing electric heating.

Open

DTE insulation

$600, plus $250 bonus

For DTE gas customers, with a 500 square foot attic.

Open

DTE Wi-Fi thermostat

$50

One per home. Apply by December 31, 2026.

Check first

State home energy rebates (MiHER)

Check your district

The state paused new income-qualified applications in five districts. The page does not say which district Ann Arbor is in, so look up your county on the state's map.

Closed

Federal 25C and 25D tax credits

Ended

The federal home energy credits ended for work finished after December 31, 2025. A quote that counts on them is out of date.

How Ann Arbor heats and lives

The Census Bureau's American Community Survey (2020 to 2024) counts 54,399 housing units in Ann Arbor. More than half of households rent (54.5%), and 45.5% own. Utility gas heats 70.7% of homes and electricity heats 26.1%, a bigger electric share than in Detroit, Grand Rapids or Lansing. Only 41.6% of homes are detached houses. Another 12.3% are attached homes and 8.8% are in buildings of two to four units.

Older homes, but newer than Detroit's

63.4% of Ann Arbor homes were built before 1980 and 14.8% before 1940. About 15.9% date from 2000 or later. That is a younger mix than most Michigan cities, so insulation upgrades pay off most in the older neighborhoods, and the city's air sealing rebate fits homes where a blower door test shows real leaks.

Renters can use the city program

The city says you can apply if you own or rent a home in Ann Arbor, as long as the work is a retrofit and you are at least 18. That is unusual. Most utility rebates go only to the account holder for a single-family home. A renter should still get the landlord's written approval before any work on the building.

Income-qualified amounts

The higher amounts are for households at or below 120% of area median income. The city page lists $116,200 for one person and $166,000 for four. The city says it set aside about $1.9 million from its Community Climate Action Millage, with about half for income-qualified households. Verifying income takes up to 10 business days, so start that step first.

A note about the EV rebates

The city also pays EV rebates, but its page said on August 17, 2026 that all of them were reserved, with a waiting list. We cover home energy here, not EVs.

Every rebate guide for Ann Arbor

What to do in Ann Arbor

  1. Read the city's technical rules for the measure you want, such as the NEEP heat pump list.
  2. If you may be income-qualified, verify your income with the city's rebate team first.
  3. Reserve the rebate funds before you buy. The city says approval takes up to 10 business days.
  4. Finish the project within 90 days of approval and send the full application.
  5. Expect the check in 6 to 8 weeks, and apply separately to DTE for its rebates.

Common questions

Does Ann Arbor have its own heat pump rebate?

Yes. The city's A2ZERO program pays $4,000 for a cold climate heat pump, or $5,500 for lower-income households.

Can I get the city rebate and DTE's rebate together?

The city's page does not say they are barred from combining. DTE's heat pump rebate is only for electric customers replacing electric heating, so many gas homes will claim only the city's. Ask both programs before you sign.

Do renters qualify?

Yes. The city says you can own or rent a home in Ann Arbor, as long as the equipment goes in that property and the work is a retrofit.

What is the income limit?

120% of area median income. The city lists $116,200 for one person and $166,000 for four people.

Is the federal tax credit still available?

No. It ended for work finished after December 31, 2025.

What to do next

Read the Ann Arbor heat pump guide or the Ann Arbor insulation guide. See every city and DTE program on our A2ZERO page, or the nearby Detroit guide.

By Sam Menard. Sources, last read October 6, 2026: City of Ann Arbor: A2ZERO rebates, DTE Energy: air conditioners and heat pumps, DTE Energy: insulation and windows, Michigan EGLE: Home Energy Rebates, US Census Bureau, ACS 5-year estimates 2020-2024 (heating fuel). All Ann Arbor rebates → Every Ann Arbor A2ZERO rebate →

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