If you’ve been shopping around for a solar panel system, you’ve probably heard at least one company advertise ‘free solar panels’ – that they will install a solar system on your roof for free. But, much as with anything, remember that there is no such thing as a free lunch (or a free solar panel).
Decoding the sales pitch: The term ‘free solar panels’ is sometimes used to advertise solar lease or solar power purchase agreements (PPAs).
Under both types of arrangements, a company will put solar panels on your roof for no money up-front, but will charge you for the electricity that they produce.
What do companies mean when they say free solar panels?
So what do a company’s marketeers and salespeople mean when they say ‘free solar panels’? Usually, they are referring to solar leases and power purchase agreements (PPA’s). Under these solar financing arrangements, a solar company will put a solar system on your roof at no up-front cost to you. This sounds great – you get to say that your home is powered by clean energy, and can even point to the solar panels on your roof to prove it.
But the reality is that you do not technically own the system, and the solar energy the panels produce is not free. Under solar lease agreements, ownership is retained by the solar company, and you pay for the electricity it produces. In essence, the company has built a small power plant on your roof and is selling you the electricity.
Will free solar panels save you money?
You may have various reasons for going solar. If you’re like most people, saving money, eliminating your utility bills and/or reducing your carbon footprint are probably at the top. The environmental benefits of going solar are more or less the same regardless of who installs your system, so it’s key to focus on the financial benefits.
Regardless of its ‘do-good’ image, the solar industry is an industry like any other: the companies offering products are looking to turn a profit. Providers of solar leases make their money by selling you electricity, usually at a lower rate than what you pay your utility.
Although companies like SolarCity once dominated the market for solar leases, countless other players have since entered the space and begun competing with each other. Some solar leases will save you more money than others. You as a solar shopper can now take your pick of company based on the attractiveness of their offering. So even if financial gain is secondary to environmental considerations for you, you should still shop around to make sure you’re getting the best deal.
Interested in learning about your local solar options? By shopping on the EnergySage Solar Marketplace you can compare not only solar lease options, but also purchase and solar loan options. Sign up today to get quotes from solar installers in your area.
Interested in free solar panels? How about financing your system with a solar loan instead?
The revolutionary thing about solar leases was that they made it possible for virtually anyone with a roof to go solar, regardless of whether they had cash in the bank to purchase a system. Solar leases were crucial in removing barriers to entry back when solar system prices were prohibitively high.
But times have changed substantially since solar leases were introduced. Most importantly, solar prices have plummeted over 80% in the last 5 years. This means that solar systems are now more affordable than ever, and that financing options other than solar leases have become viable. The most important of these is the solar loan, which combines the ‘zero-down’ aspect of the solar lease with the benefits of system ownership (‘the best of both worlds‘).
So before you sign up for the first ‘free solar panel’ deal that comes your way, make sure you understand what you’re being offered and that you’ve considered all of your other options. In other words, be a smart solar shopper.
-‘Free solar panels’ are not actually free; you will pay for the electricity that they produce, usually under a solar lease / power purchase agreement (PPA).
-If you can’t commit the funds to pay for a solar system outright, consider getting a solar loan instead of a solar lease. Solar loan providers will frequently have zero-down offers – and when the loan is paid off, you own the system.
-If you are convinced that a solar lease is right for you, remember that there are many solar lease providers out there. They are competing against one another, so make sure you shop around and find one that offers you significant savings on your power bill.