Together, the programs below help you to optimize capital improvement projects and dramatically reduce your out-of-pocket costs. Some property owners even combine multiple incentives on the same project – covering 60% to 90% of upgrade expenses.
Local and Utility Rebates
The Ann Arbor Home Energy Rebates can be used for a variety of items, including heat pumps, heat pump water heaters, induction cooktops and ranges, and insulation, among others. Rebate amounts reset annually and are first-come, first-served, so apply now to maximize savings.
Insulate Ann Arbor offers rebates for insulation and air sealing at multifamily rental properties in Ann Arbor. Up to $75,000 or 50% of total project costs is available per property, with up to $250,000 or 90% of total project costs available per income-qualified property. Funds are limited and rebate payments are dependent on fund availability.
DTE offers rebates for multiple energy efficient appliances, including washers and dryers, windows and doors, insulation, Wi-Fi thermostats, and more. The rebate amount varies based on the appliance, building, and existing systems in the building. Depending on the account structure with DTE, property owners might need to work with tenants who are the account holder to access the rebates.
For properties with 3+ units under one roof.
This energy-efficiency initiative helps reduce energy use and costs.
What You Get:
- A free energy assessment to determine which energy-saving options make sense for your property
- Expert assistance in selecting upgrades
- Up to $100,000 in total incentives per property per year
- Increased incentives for income-qualified properties
Designed for commercial and industrial customers to continuously improve performance and reduce energy waste. Qualified DTE customers get technical support and financial incentives.
Federal Tax Credits
Note: Not all tax credits are available to all property types or ownership structures. And with recent federal legislation, some of the tax credits are being phased out. Consult with your tax advisor before making any decisions.
Reduces federal income tax liability by covering a percentage of the cost of solar or geothermal systems installed during the tax year.
Installed systems are eligible for:
- 30% base tax credit if the project meets labor requirements
- Additional 10% for projects meeting a domestic content minimum
- Additional 10% if the project is located in an energy community
- Additional 10% if the project is located in a low-income community
- Additional 20% if the project is on a qualified low-income residential building or a qualified low-income economic benefit project.
Important: Projects can qualify for either the Investment Tax Credit OR the Production Tax Credit – not both. Review which option works best for your project. In general, the U.S. Department of Energy says smaller-scale solar projects receive more value by utilizing the Investment Tax Credit. However, this can change over time and is dependent on the system being installed.
Per-kilowatt-hour tax credit for electricity generated by solar and other qualifying technologies for the first 10 years of a system's operation.
Installed systems are eligible for:
- 2.75 ¢/kWh if they meet project labor requirements
- Additional 0.3¢/kWh if the project meets a domestic content minimum, if the project is located in an energy community
Important: Projects can qualify for either the Investment Tax Credit OR the Production Tax Credit – not both. Review which option works best for your project. In general, the U.S. Department of Energy says smaller-scale solar projects receive more value by utilizing the Investment Tax Credit. However, this can change over time and be dependent on the system being installed.
The 179D energy efficiency tax deduction enables building owners to claim a tax deduction for installing qualifying systems in buildings.
Major change under the Inflation Reduction Act: Multifamily buildings that are at least four stories tall are now eligible for both new construction and retrofits.
How it works:
- The deduction is the lesser of the cost of the installed property or the savings per foot.
- $0.50 per square foot for a building with 25% energy savings
- Plus $0.02 per square foot for each percentage point of energy savings above 25%
- Maximum of $1 per square foot for a building with 50% energy savings
Bonus: If local prevailing wages are paid and apprenticeship requirements are met – the maximum deduction amount increases to five times the savings per square foot amount.
The 45L tax credit provides a tax credit for eligible new or substantially reconstructed homes meeting applicable requirements for the ENERGY STAR Home or DOE Zero Energy Ready Home (ZERH) programs.
The 45L credit provides:
- $5,000 per dwelling unit that’s part of a building eligible for the ENERGY STAR Multifamily New Construction Program, certified to applicable ZERH program requirements, and meets prevailing wage requirements
- $1,000 per dwelling unit if prevailing wage requirements are not met
Low-Cost Financing
Michigan Saves is Michigan's green bank and provides affordable financing for energy efficiency, renewable energy, diversification, and carbon-reduction projects for both residential and commercial buildings.
What you get:
- Michigan Saves partners with lenders to negotiate the best rates for projects.
- Connections to qualified contractors ready to take on the work
- Simplified application process
PACE is a financing tool that enables cash-flow-positive investments in comprehensive energy-efficiency, water-efficiency, and renewable-energy projects.
Key benefits:
- Eliminates or reduces the need for upfront capital
Spreads costs over up to 25 years
- Loan repayments covered by energy savings from the project
- Excess savings result in immediate positive cash flow
Lean & Green Michigan is the PACE administrator in Michigan.
Additional Financial Programs
The U.S. Department of Housing and Urban Development's Market-to-Market program preserves the affordability and availability of low-income rental multifamily properties with federally insured programs by restructuring debts to levels supportable by reduced rents.
The program includes a Green Initiative to assist owners in rehabilitating their properties in the most sustainable way feasible.
To participate, property owners must have four or more dwelling units covered in whole or in part by a project-based Section 8 rental housing assistance contract, among other similar requirements.
The Weatherization Assistance Program helps reduce energy costs for low-income households by increasing their homes’ energy efficiency, while ensuring their health and safety.
Multifamily and rental properties can qualify when:
- At least 66% of tenants qualify as low income (general properties)
- Or at least 50% of tenants qualify as low income (duplexes and four-unit buildings)
