Have you seen installers advertising “free solar panels” for your home, and you’re left wondering if it’s a scam or not? While it may seem like a shady sales tactic, many installers actually do install solar panels without upfront costs! But, like many things that sound too good to be true (or have the word “free” in them), there’s a catch.
- Free solar panels won’t give you the same amount of electric bill savings.
- They include a long-term financing agreement.
You’ll find they usually have two financing options: solar power purchase agreements (PPA) or solar leases. In both cases, these are long-term contracts with the solar installation company, agreeing that you will pay the solar company each month for the solar energy produced. For both options, these leases usually last for 20-25 years.
Is it a Scam?
No, not at all! If you go with free solar panels, you will still manage to save money on your electricity bill. You will make monthly payments to the solar installation company, but it will be less than what your regular energy bill would have been. If you choose to go with this option, we recommend shopping around because some solar leases will save you more money than others.
Right now, this may sound like a great deal. You get to say your home is powered by clean energy, and you can show off your new solar panels to your friends! But, you don’t technically own them, and you have to pay for the power the panels produce. While you are saving money from no upfront charge, they aren’t the best choice for long-term savings.
Which Option Should I Choose?
While there are many benefits to free solar panels, we need to consider the downsides. They won’t save as much money as other financing options will. If you buy solar panels, they will pay themselves off over time. Once paid off, they will continue to generate free energy every month, which is a considerable cost advantage.
You’ll also find that because you don’t own them, you can’t get the federal tax credit or local tax credits. The federal tax credit lets you save 26% on the costs of your solar panels installation. Another downside is if you’re planning to sell your home. Solar leases can transfer to new owners, but if the potential buyers don’t want to enter a contract, it can put you in a difficult spot. If you choose to end the agreement early to sell your home, you will have to pay a breaking fee.
Our Advice
Before making a decision, you should weigh all of your options. If you plan to stay in your home for a long time or permanently, owning will give you the greatest long-term savings. Owning them is also a great option if you plan to sell your home before the contract ends. The tricky part can be paying the upfront fee for the panels. To help out with this, we offer different financing and loan options! If you don’t qualify for a solar loan or the federal tax credit, going with free solar panels may be the best choice. Always get multiple quotes from different installers and talk with them to find the best option for you!
If you have any questions about solar panel installation & maintenance, give us a call at (858) 360-8295 or contact us on our website.
