In the years since, however, solar panel technology has improved consistently and rapidly. Each solar panel produced today can generate more than it could a few years ago, with the same standard-size panel generating 370 watts of power when it previously would have been only 250 watts. On top of that, solar equipment is simply more affordable than ever before, with costs dropping 70% since 2014, according to the U.S. Department of Energy. These factors combine to bring down the time it takes for solar panels to pay for themselves, and with it, a growing portion of the population can readily consider investments in solar panels.
That said, solar panels still do typically require either a significant upfront investment or a loan that comes with favorable economic terms, leaving many people blocked out. And that fact is particularly unfortunate because the inherent benefits of solar -- lower energy bills, backup power during blackouts, and a cleaner environment—are even more needed for lower-income homes.
Seeking to resolve this inequity, solar companies have begun to promote a concept that sounds too good to be true: free solar panels! Specifically, many programs and opportunities have arisen that have promised how to get free solar panels from the government or even just low- to no-cost upfront options to install solar panels.
But can such valuable solar equipment really be free? And what’s the catch? Keep reading to find out.
Dissecting ‘Free Solar Panels’ Offers
Solar installers, both small and large, are regularly promoting offers of ostensibly ‘free’ solar panels. Obviously, though, these companies aren’t simply operating a charity or a giveaway out of the kindness of their hearts, but rather there’s plenty in it for them.
When a solar provider offers to install solar panels without charging the typically high upfront capital costs (the average installation on a U.S. home’s rooftop can average about $12,000, but can be as much as $40,000 depending on size, quality, and provider), what they are really offering is an alternative method of solar panel installation and ownership. Rather than pay a solar provider and installer to buy panels and the other necessary, as well as the cost of labor to install and set up the solar energy system, the ‘free’ solar panel arrangement involves solar installers putting up the solar equipment on a customer’s rooftop for no charge, but the customers do not own that equipment.
Solar Leases and PPAs
Instead, the solar company in this instance owns all the equipment and leases it to the homeowner. Such an arrangement is typically accomplished via a solar lease or a power purchase agreement (PPA). Think of it as comparable to a car lease: the customer never actually owns the equipment, but they can use it for as long as the contractual arrangement between the homeowner and the solar company ultimately lasts.
The specifics of these programs differ depending on whether they are framed as a solar lease or a PPA, with the specific contract terms of each of those arrangements differing from provider to provider as well, but typically the outcome is the same. The homeowner does not own the panels, and in fact, the homeowner doesn’t even directly own or control the electricity produced by these solar panels. Instead, the homeowner signs a contract agreeing to buy the generated solar energy from the solar company, which along with the costs to lease the panels is how the solar provider makes money off the ‘free solar panel’ arrangement.
Lower Your Cost with Government Solar Incentives
Where these opportunities for free solar panels direct from the solar installer aren’t available, though, options exist on how to attain free, or at least greatly discounted, solar panels thanks to government programs and incentives. The goal of these programs is to make solar energy system ownership accessible, spreading out the benefits to more customers and helping the common good by integrating clean energy into the grid. In fact, the Inflation Reduction Act signed in late 2022 injected new life into the existing federal tax incentives for residential solar installations (good for a 30% tax credit on the cost of your system if installed between now and 2032), on top of potential local and state benefits that can be found in DSIRE (Database of State Incentives for Renewable & Efficiency).
Cutting Through the Smoke and Mirrors: Costs and Benefits
In the end, customers with a solar lease or solar PPA do, in fact, save on their power bills. At the time of signing the contract, the cost paid for the electricity generated by the solar panels will be less than the costs the homeowner would otherwise be paying for the same amount of electricity from the local power provider. In that way, the homeowners are still saving money and helping the environment and climate in their decision to embrace solar. But important to note is that the homeowner will not be getting the full suite of energy bill savings as they otherwise would if they owned the panels themselves.
The availability of solar leases and PPAs will inevitably be viewed by some customers as their best bet and their lowest-risk option to actually utilize solar energy, and in certain situations that very well will be true. But customers must be educated because these free solar panel arrangements are not necessarily optimal, despite how appealing ‘free’ sounds.
For example, customers who sign a solar lease or PPA must consider the following potential complications that owning solar panels do not have:
- What happens when the contract expires?Homeowners have no guarantee that they’ll receive favorable renegotiation terms (that is if the solar provider is even still in business at that time!).
- Household with a solar lease that ends up selling their house will encounter messy contract transfers or expensive contract breaks, undoubtedly creating extra headaches for all involved.
- Volatility in standard power prices, which are becoming increasingly common these days, may lead to the locked-in rates from a locked-in solar lease provider becoming less favorable over time.
Other Purchase Options Like Personal Loan and Cash Purchase
Given all these potential pitfalls to the ever-tempting ‘free’ solar panel offerings, homeowners should recognize that they have additional options if they still want to receive the savings and clean energy benefits of solar panels on their rooftops.
- Customers can find a low-cost or no-cost down personal loan to try and afford the upfront capital of owning a solar energy system. Personal loans for solar panels will likely come with interest payments that increase the overall price paid by the owner over the course of the solar energy system’s lifetime, but even with that added cost,most homeowners will see the solar panels end up paying for themselves with energy savings.
- For those customers who have the upfront capital, an upfront cash purchase of solar panels will be the most straightforward and cost-effective method for solar installations. While the capital required may be challenging to save, buying them outright will reduce total system costs by eliminating financing terms and allow for greater overall net profit from the decision.
- To highlight the opportunities and find how to get free solar panels from the government, or at least major incentives and tax breaks towards paying for their own systems, homeowners should search the Database of State Incentives for Renewable & Efficiency (DSIRE) to see what may be available in their jurisdiction.
Even for customers who can’t acquire free solar panels, finding the ideal method for you to purchase a solar energy system anyway will be more expensive initially but will ultimately allow for rising property values, homeowners to reap potential tax benefits, and receiving the full set of available cost savings themselves.
Even if solar leases or PPAs are the best arrangements for your situation, chances are that you have more options in terms of companies and terms than you think. Before diving into business with the first solar provider that offers free solar panels, be sure to do your research and get quotes from multiple local providers to allow you to pick out the best deal for yourself.
The key, in the end, is all about being educated. The solar industry these days is booming more than ever before, and you have options. Whether the best options are rooftop solar panels via leases or outright ownership or even portable solar panels and portable power stations, which let you quickly experience the convenience of solar power with no installation required, the time is ripe to join the renewable energy revolution. But find the best way to do so that doesn’t saddle you with debt, doesn’t eat into your potential benefits, and that overall best fits your precise needs.