Free Solar Panels: Are They Really Free?

Can you get free solar panels?

While the word “free” implies there are no associated costs, this is not usually the case with free solar panel offers. More accurately, it usually means “$0 upfront.” Homeowners often still pay monthly lease fees or electricity charges to the solar company.

Decoding “free” solar marketing terms

Solar companies advertising “free” solar panels are often really promoting solar leases or power purchase agreements (PPAs). Sales representatives may also overstate the financial benefits by implying that homeowners will completely eliminate their utility bills.

“Free electricity for 25 years”

This often means the system is expected to offset most of your electric bill. It does not mean that you’ll never pay for power again. You may still have utility charges, and many agreements require ongoing monthly payments to the solar provider.

Solar panel installations typically cost between $13,962 and $27,924.

Solar marketing materials frequently promise to “eliminate your energy bill,” but real-world results can vary. Lynn in Texas told ConsumerAffairs that despite strong summer production, her household has “never had a zero electric bill.”

“No more utility bills”

High-pressure pitches often blur the lines between solar financing and utility costs to make the monthly math look more appealing. For example, a representative convinced Doretha in Texas and her father that they would only have “one bill” to manage, leaving them blindsided when they had to pay both the light company and the system financing simultaneously.

Another solar customer, M. in California, said they signed up “under the impression that I was not gonna get a monthly bill” from their utility company, only to feel frustrated when multiple statements continued arriving after the solar system went live.

“Free equipment” or “free installation”

The panels and equipment are rarely free outright. Instead, the cost is commonly built into a solar loan, lease or power purchase agreement (PPA).

Even when companies advertise “free installation,” those expenses are usually folded into the total contract price and repaid over time through monthly payments or energy charges.

Some companies do actually include free maintenance or monitoring during the contract term, but coverage details and exclusions vary.

A good rule of thumb: if a solar offer sounds completely free, it’s usually financed somewhere in the contract.

Solar leases vs. power purchase agreements

Solar leases and PPAs may reduce upfront costs, but they usually involve long-term contracts and ongoing payments.

With most leases and PPAs, the solar company owns the panels, not you. That means you usually can’t claim tax credits or incentives, and you have less control over the system. Many agreements last 20 to 25 years. Canceling early can involve hefty fees or buyout costs.

Did you know?

A solar lease or PPA can make it harder to sell your home down the road; many homebuyers aren’t interested in inheriting a half-complete lease agreement.

» RELATED: Pros and cons of solar energy

State and local solar programs

The federal government doesn’t offer any free solar panel program for residential homeowners. Some state and utility low-income solar programs do provide deeply subsidized or genuinely no-cost rooftop installations for qualifying households. These vary widely by state.

Free solar panels in California

The Disadvantaged Communities Single-family Solar Homes (DAC-SASH) is a rare program that helps income-qualified homeowners in certain communities get free rooftop solar panels. The program is managed by GRID Alternatives.

• The subsidy can pay for up to 100% of the solar system cost.
• It’s available to customers of PG&E, SCE and SDG&E.
• Applications are open until 2030.
• You can check if your home is in an eligible community using the California Environmental Protection Agency’s map.

Legitimate low-cost programs in other states

The U.S. Department of Energy’s Solar Energy Technologies Office (SETO) funds community solar in some low-income areas. That can get close to truly free for eligible participants.

The Database of State Incentives for Renewables & Efficiency (DSIRE) keeps a list of state and local government policies and incentives for renewable energy and efficiency initiatives.

You can use the database to identify net metering programs, state tax credits and rebates. For example, some states offer solar renewable energy certificates (SRECs) that let homeowners earn income on their solar power generation.

Actual solar panel costs

Solar panel costs typically range from $13,962 to $27,924. On the high end, we talked to a solar customer in Hawaii who spent $100,000 going solar.

Beyond the initial hardware and installation fees, homeowners must also budget for long-term upkeep that rarely makes it into the sales brochure. The ongoing maintenance requirements came as a "total surprise" to Julie in Texas after discovering she would need to spend hundreds of dollars twice a year just to have her panels washed.

The downsides of $0-down solar panels

While $0-down programs lower the barrier to entry, they introduce long-term financial and logistical complications.

• Poor customer service: Solar leases and other “free” solar panel arrangements often come with multiyear service contracts for maintenance and repairs. However, these are only valuable if the company offers responsive customer service.
• Built-in rate escalators: Many PPAs and solar leases include scheduled rate escalators. This means you may pay more for your solar power than you would have for conventional energy over the same period.
• Could complicate resale: While Zillow has found that solar panels can increase a home’s value by around 4% if they’re part of the sale, a solar lease may have the opposite effect. That’s because the new owner will have to assume your lease if they want to keep the panels on the property. In fact, having a solar lease in place can make it harder to sell your house and may reduce your home’s market value.
• Low-quality equipment: Some low-cost solar energy systems may also have lower-quality parts and poor-quality installations.

Real-world examples

Noel in California said that after his solar system stopped producing energy, he struggled to get timely support from his PPA provider. According to Noel, more than two months passed after the inverter failed with little communication from the company about a replacement, leaving the system nonfunctional.

Others who sign these agreements say they feel trapped when their total energy costs increase instead of decrease. Doris in Massachusetts said she ended up juggling bills from both her utility company and her solar provider.

“The only reason why I elected to go with the solar panels was so that I could try to shorten my electric bill, but that's not the case,” Doris said. She added that she now plans to sell her house just to get out of the contract.

Free solar panel scams

So far, we’ve given programs advertising free solar panels the benefit of the doubt by assuming they’re just making overly exaggerated claims about their benefits. However, criminal solar panel scams often use the same language.

Luckily, understanding the most common free solar panel scams can help protect you from making an uninformed choice that could cost you in the long run. Here are some of the most common solar panel scams to watch out for:

• Fake government incentives: Be aware of companies claiming to offer free solar panels through government subsidies or grants. Check the legitimacy of their claims by researching local or national incentives on your own.
• Unsolicited leads from door-to-door salespeople: If a salesperson knocks on your door offering free solar panels, don't sign up for anything until you carefully research the company and its products.
• High upfront costs and hidden fees: Avoid signing a contract for “free” solar panel systems if a high upfront cost is still involved. This is especially true for hidden fees and unknown long-term expenses, such as maintenance or repair bills.
• High-pressure sales tactics: Beware of companies that try to pressure you into buying their products. Often, these companies are doing this to skip over providing transparent information about their payment terms, warranty periods and other important details. Always read contracts thoroughly before signing them.

FAQ

Bottom line

The “free solar panels” pitch you may have seen in ads is almost always a lease or PPA. Both are legitimate, but worth reading the fine print since you’re committing to a 20- to 25-year contract on your roof.

Be cautious and conduct thorough research before dealing with any company that advertises its products this way. Scams abound, including false government incentives and door-to-door salespeople who pressure customers into signing predatory contracts. Overall, you’re probably better off investing in a quality solar energy system that may pay for itself over time.