Free Solar Panels: Why They May Not Actually Be Free (2024)

You may see some solar panel companies advertise their panels as “free” or “no cost.” In most cases, these companies are describing a solar lease or solar power purchase agreement (PPA) type of program. Under these agreements, the company installs solar panels on your roof or property for no upfront to you; hence, the “free” terminology.

You will then be charged for consuming the electricity the panels produce and in some cases also be charged a monthly lease fee. You will not own the solar panels with one of these “no cost solar” agreements. In other words, solar leases are essentially like renting solar panels. The solar company handles all of the installation and maintenance for a specified term, which is usually around 20 to 25 years. At the end of the lease term, you may have the opportunity to buy the solar panels outright, otherwise, the solar company will remove them.

“Free” solar panels will save you money because energy from solar power is usually less expensive than energy from the electrical grid. Keep in mind, however, that these savings from solar energy are possible regardless of if your solar panels are leased versus purchased.

The long-term cost savings help you determine if solar panels are worth it. Will you save enough money on your electricity bill throughout the 20 to 25 years to justify having the panels installed? At the end of the term of a solar lease, you will not own the solar panels, rather the panels will be removed from your property if you don’t resign. Consider this while analyzing the other pros and cons of solar panels.

The concept of “free” solar panels may seem appealing, as companies that offer them promote the installation of solar panels without any initial cost. However, it’s important to note that “free” solar panels are not always a scam, but they do require careful consideration.

These “free” solar panels are typically offered through solar panel leases or power purchase agreements (PPAs), which allow individuals to install solar panels without the high expense. While this may be beneficial for those seeking to alleviate the costs of solar panel installation, it’s important to consider the potential drawbacks and hidden costs associated with these agreements. Understanding the terms and conditions of solar panel leases or PPAs is crucial to avoid unexpected expenses or losses. Also, working with reputable solar providers and evaluating multiple options can help homeowners make informed decisions without compromising their financial stability.

While the initial cost of “free” solar panels can be appealing, there are some hidden costs to consider before signing a solar lease agreement. Signing an agreement with a solar company will make you unqualified for any solar rebates, federal tax credits or local solar incentives. Additionally, if your solar panels produce more solar energy than your household uses, any financial gain for this energy will go to the solar company, not your household.

Make sure you fully understand the stipulations in a solar agreement before signing the contract. Some companies may use lower-quality solar panel materials that do not convert as many solar rays to energy as other panels. In other words, you could be losing out on potential electricity savings due to the inefficient panels.

Something else to consider when leasing solar panels is whether or not your will be selling your home anytime during the lease term. Potential home buyers are often hesitant to take over a solar lease agreement, which could make it more difficult to sell your home.

The government does not provide free solar panels directly to individuals. However, various government incentives and programs can significantly reduce the expense of installing solar panels on your property.

One example is the Federal Solar Tax Credit (ITC), which grants you a percentage deduction from federal taxes on your solar installation costs. State and local initiatives such as solar rebates, grants or credits for solar installations can also be beneficial. Additionally, you can earn and trade Solar Renewable Energy Certificates (SRECs) based on your system’s solar energy production in certain states.

While these incentives can significantly reduce the cost of going solar, they do not equate to receiving free solar panels from the government. Before installing solar panels on your property, it’s essential to research the specific programs available in your area and carefully consider your options.

Reducing the upfront cost of solar energy involves exploring various strategies and incentives to make solar panel installation more affordable. Homeowners can take comfort in the fact that there are federal and local incentives, such as tax credits and rebates, and alternative financing options, like zero-down solar loans and community solar programs, available to them. These options can significantly reduce upfront costs and make solar energy more economically feasible, instilling confidence and security in the decision to go solar.

Federal and Local Incentives

Unfortunately, under a solar lease or power purchase agreement, homeowners typically no longer qualify for federal and local solar incentives. Since the solar company is the owner of the panels, they would be the party eligible for any incentives.

If securing federal and local solar power incentives or solar tax credits is a high priority for you, consider buying your own solar panels rather than leasing them. Doing so will allow you to take advantage of federal credits.

Zero Down Solar Loan

A zero-down solar loan enables homeowners to finance their solar panel installation without any upfront costs. The loan entails a fixed interest rate and allows you to spread the expenses over a fixed period, usually 10 to 20 years, increasing the accessibility of solar energy. Homeowners can enjoy immediate energy savings and repay the loan through manageable monthly payments. You will own your solar panel system once the solar loan is paid in full.

Community Solar

Community solar, also known as solar farms or solar gardens, enables multiple people to benefit from a shared solar energy system. This program provides access to solar energy for those who cannot install panels due to property issues, living in rented or multi-family properties or simply cannot afford the installation costs. Therefore, participating in a community solar project allows individuals to access clean, renewable energy while receiving credits on their electricity bills. This approach makes solar energy more accessible to a diverse range of people.

When choosing the best solar financing option, it is crucial to consider your personal circ*mstances and preferences. One option to explore is solar loans, which allow you to distribute the cost of solar panel installation over a period of time. Solar loans offer the advantage of allowing you to own the solar panels and enjoy the associated perks and financial benefits while also providing manageable monthly repayments that fit within your budget.

Solar leases and power purchase agreements (PPAs) are appealing options for individuals who find the initial solar installation expenses out of reach. These financing options typically require no upfront payment and provide the benefit of lower, fixed monthly rates. With a solar lease or PPA, a solar provider or third party will install and maintain the solar panels on your property. In return, you will pay a fixed rate for the generated solar energy. This arrangement allows you to access the benefits of solar energy without the burden of significant upfront costs.

The best financing option for solar panels depends on your personal financial situation and priorities. However, a cash purchase offers the greatest savings and benefits if you have the funds available.

Whether you are interested in “no cost” solar panels or want to know more about purchasing solar panels for your own home, start by working with the best solar companies available to ensure the best service.

A trusted solar company will walk you through all of your options when it comes to the sizes, styles and capabilities of the panels. Additionally, they will have a few different financing options available to meet your needs. Ask friends and family who have had solar panels installed for any recommendations and always request testimonials from any solar companies.

The concept of “free” or “no-cost” solar panels really is too good to be true. “Free” solar panels are essentially rented from solar companies. While you will reap the benefits of cheaper electricity bills through solar power, you do not own the panels; the solar company does. Once your lease agreement is up, the panels will be removed.