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.

Instead, the free equipment comes with hidden costs and caveats. It’s your responsibility to research and understand the actual cost of these free panels before committing to a contract.

Solar leases vs. power purchase agreements

Some solar energy companies offering “free” solar panels are just making exaggerated claims to advertise solar leases or power purchase agreements.

These programs can get solar panels on your roof for little to no upfront cost, but they can also lock you into paying for years.

• Leasing solar panels gives you access to solar power without paying substantial upfront equipment costs. With this arrangement, you pay the solar leasing company a fixed monthly fee and receive the benefits of having solar power on tap without ownership of the system. As an added benefit, the leasing company is responsible for installing, maintaining and repairing the solar panels.
• Power purchase agreements (PPAs) are another popular option for those who don't own the solar panels on their property. You purchase the electricity they generate at a fixed rate per kilowatt-hour over a specific period, typically 10 to 20 years. These rates are usually below standard utility rates, but they can increase over time.

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

Another way to save on solar panels is through government rebates and incentives. These vary by state, region and locality.

On average, solar panels cost $18,000 to $43,000 before any financial incentives.

Many of these programs are only available to people who buy their solar panels. It’s worth mentioning that you can finance the cost of your solar panels with a solar loan, reducing your initial investment to just a down payment.

Free solar panels in California

The Disadvantaged Communities Single-family Solar Homes (DAC-SASH) program 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.

The downsides of “free” solar panels

Solar programs with minimal upfront costs have increasingly gained popularity as more and more individuals look to harness the sun’s power to meet their energy needs. While these programs may seem like a great way to save on electricity bills, it's crucial to exercise caution — some may come with hidden costs or long-term contracts.

Here are a few of the main downsides of going with a “free” solar panel program:

• Low-quality equipment: Some low-cost solar energy systems may also have lower-quality parts and poor-quality installations.
• 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.
• Reduced home values: 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 them 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.
• 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.

As an example of the last point above, some consumers have reported negative experiences due to poor panel maintenance. Noel, a ConsumerAffairs reviewer from California, reported that when their system stopped producing energy, it was difficult to reach their PPA provider’s customer service team to schedule repairs.

“[M]ore than two months after the inverter failed we sit here with a dead system, and no communication … about replacement. I’m on the verge of notifying them they have materially breached the PPA,” Noel wrote.

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.

Can you get free solar panels from the government?

The federal government does not have any programs that offer totally free solar panels. However, several state and federal government programs can help you access solar energy equipment with lower upfront costs. These tax credits and incentives can reduce solar installation costs, making solar energy more accessible.

The Database of State Incentives for Renewables & Efficiency (DSIRE) provides a reasonably comprehensive 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.

Bottom line

“Free” solar panels may seem like a great deal at first glance, but you should 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 switching to solar energy by investing in a quality solar energy system that may pay for itself long-term.