Are ‘Free Solar Panels’ Really Free? [2022 Guide]
Sometimes, things that seem too good to be true are, in fact, just that.
Eloi_Omella / Getty Images
You may have seen advertisements or had someone knock on your door offering free solar panels. But are “free solar panels” really free?
Let’s get this out of the way early — “free solar panels” are not really free. There is no such thing as free solar panels, and there is no such thing as a no-cost solar program.
If you’re hearing about “free” or “no-cost solar programs,” you’re likely being fed a cheap sales pitch to tempt you into signing a solar lease, or a power purchase agreement. Under these solar financing agreements, a solar company installs solar panels on your home for no money down (hence, the misleading use of the word “free”), and you then pay a monthly rate for the energy those panels produce. Think about it as renting solar panels, or simply buying your power from a solar company instead of a utility company.
Zero-money-down installation, free maintenance, free enrollment, guaranteed savings written into the contract — these promises are all just a little too good to be true. We’ll get into the fine print on why “free solar” is so misleading, but if you’re looking to install solar panels on your home for $0 down, it’s possible to do so with loan financing. If you’re ready to start learning about these options from solar installation companies in your area, you can use this tool or fill out the form below for a free consultation.
All EcoWatch solar companies are pre-vetted for your convenience.
Are ‘Free Solar Panels’ A Scam?
The marketing strategies advertising “free solar panels” are designed to entice, but in many cases, solar leases and PPAs end up being impractical choices for homeowners. In some severe cases, solar companies have even faced lawsuits over falsely advertising “free solar panels” to unsuspecting customers who lost thousands by signing unfair contracts.
The average solar lease can indeed save a customer money, but only when things go smoothly. If you sign a solar lease and change your mind, sell your home or your system experiences production issues, you can run into costly surprise bills. Here’s why:
- Leases have hefty cancellation fees, sometimes as high as $20,000.
- If you ever decide to sell your home, transferring a lease to a new homeowner can be challenging. If the new owner doesn’t agree to assume the solar lease, you might have to pay to move the panels to a new residence, or worse, be forced to cancel your lease.
- In a worst-case scenario, hiring a low-quality solar installation company can lead to issues with your home or roof. Solar leases may not offer workmanship warranties, so you could face bills for any damage to the integrity of your home.
Solar leases and PPAs are not themselves scams, but homeowners should be cautious and educate themselves before signing a lease. Make sure to always read the fine print.
So, if “free solar panels” aren’t really free, what is the best way to pay for solar panels?
1. Paying for Solar Panels in Cash
Paying for solar in cash will yield the most long-term savings. By purchasing a home solar system outright, you’re essentially paying for about 25 years of discounted electricity at once. A cash purchase allows you to calculate home energy costs decades in advance, avoiding interest rates, fees and utility rate hikes.
2. Solar Financing Through Loans
We understand that spending $15,000 or more up front just won’t be feasible for all homeowners. Solar loans allow you to borrow money from a lender to purchase your solar system, which you can repay over time with your energy savings. Typically, solar loans come in the form of unsecured personal loans, home equity loans or lines of credit, and in-house financing options offered directly through a solar installation company.
Taking out a solar loan offers a key benefit to borrowers: A low initial payment that doesn’t make you lose out on the benefits of system ownership — mainly the federal solar investment tax credit, used to offset 26% of the total cost of solar.
3. Leasing Solar Panels or Power Purchase Agreement
As we’ve covered, in solar leases or PPAs, a solar company installs a solar panel system on your home; you then pay a monthly rate for the solar power those panels produce. The solar company you lease through will retain ownership of the panels, thereby cashing in on the solar tax credit.
Solar leases and PPAs are close to interchangeable, but for one key difference: In a solar lease, you make fixed monthly payments to use the solar energy system, whereas in a PPA, you purchase the electricity produced by the panels. Leases are more common through national solar companies like Sunrun and SunPower.
Savings are estimated for a medium-sized home with monthly energy costs of $150 per month.
Fact-Checking Free Solar Claims
Let’s take a look at this pitch for “free solar,” which popped up when I searched “free solar panels” on Google at the time of writing this piece. See anything fishy?
- “Free Solar.” This language is misleading. At this point, you’ve realized solar leases/PPAs are not “free” at all. The panels won’t belong to you, and though you won’t pay for the installation cost itself, you’ll start making immediate monthly payments to two energy providers: your local utility and your solar company. Let’s hope your system produces as advertised.
- “Dramatically reduced monthly electric bills.” The word choice here may be a bit of a stretch. Though the contract guarantees you’ll pay less than your average monthly utility bill, savings are typically nominal when compared to purchasing a system. If you had a $100 monthly bill going into a solar lease, an average customer might reasonably expect to have payments around $75 or $80 per month after installation (if things go to plan).
- “Warrantied, monitored and maintained by your solar provider at no charge.” Let’s start with “warrantied.” Though the panels themselves are covered by warranty, any workmanship errors or issues with your roof or electrical system may be uncovered. Though solar companies do maintain leased panels, it’s worth noting that they do not cover removal or reinstallation costs if you need to make repairs to your roof or temporarily remove the panels for any other reason. Removal and reinstallation costs can reach $2,000 to $4,000 or more depending on the complexity of the home.
- “Home solar has been shown to add $25,000 to the value of your home.” Perhaps the most directly misleading claim on this advertisement, this is true only if you own the system. In a solar lease, the solar company owns the panels on your home. If anything, solar leases can complicate a home sale, as new homeowners don’t always want to assume the remainder of the lease.
How Can I Get Solar Panels With Zero Money Down?
Though we’ve debunked “free solar,” solar leases, PPAs and solar loans all offer a viable way to switch to solar energy for little to no money down.
If it doesn’t overstretch your budget, solar loans offer the most practical method to own solar panels without any upfront costs. Remember, system ownership makes you eligible for key financial incentives that decrease your solar payback period and offset the cost of solar, including:
- The federal tax credit (worth 26% of equipment and installation costs in 2022)
- Local sales and property tax exemptions
- Solar rebates through the government or utility companies
- Solar renewable energy credits (SRECs) in qualifying states
- Solar increases your property value
Companies like Blue Raven Solar have responded to the popularity of solar leases by offering their own in-house $0-down financing options that still capture the benefits of system ownership. If you’re convinced a lease or PPA is the best option for you, SunPower, Trinity Solar and Freedom Forever are some of our favorite companies offering them.
If you’re not sure which option is right for your home, it may be worth speaking with a professional. You can book a free consultation with a certified solar provider in your area by using this tool or filling out the form below.
All EcoWatch solar companies are pre-vetted for your convenience.
FAQ: Are ‘Free Solar Panels’ Really Free?
Can I really get solar panels for free?
In short, no, you can not get solar panels for free. What is possible however, is installing solar with a $0-down financing option, whether through a solar lease, PPA or solar loan.
How can I get solar panels for zero money down?
Solar leases, PPAs and loans all offer viable options of investing in solar without upfront costs. The best financing option for you will vary depending on your budget, credit score and eligibility for local incentives.
Are no-cost solar programs really no cost?
No, there is no such thing as a no-cost solar program. These types of programs are really solar leases or power purchase agreements. In these types of agreements, a company installs solar panels on your roof for no money upfront but charges you to use the power they produce each month.
Karsten Neumeister is a writer and renewable energy specialist with a background in writing and the humanities. Before joining EcoWatch, Karsten worked in the energy sector of New Orleans, focusing on renewable energy policy and technology. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.