So you know when companies say they’re giving out “free solar panels”?

Well they are not “free”. Let me break it down for you.

Typically, they’re talking about these things called solar leases or solar power purchase agreements.

They work like this, they’ll install a solar system on your roof, and you won’t have to pay a dime upfront for the installation or even for its upkeep. Sounds great, right?

You can even brag about how your house is all eco-friendly and show off those shiny panels.

But here’s the catch: you don’t really own those solar panels.

And the energy they make? It’s not exactly “free.”

The company keeps the ownership, and you just pay for the power they produce. Imagine they’ve set up a mini power station on your roof and now they’re charging you for the electricity.

Now, a lot of these deals can save you some cash on your energy bills, but not always.

So, if you’re thinking about it, make sure you check out all the options.

Maybe even think about buying your own panels or getting a no-money-down solar loan.

Here’s 6 things you need to know about those so called “Free” solar panels.

Solar Leases
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1. Understand Solar Leases

A solar lease is an agreement where a provider installs solar panels on your property at no initial cost, and you agree to rent the system for a specified period, usually 10 to 15 years.

This arrangement can be financially beneficial if the solar lease costs less than your monthly electricity bills. However, if the lease costs more, you could end up losing money.

Read More: Leasing Solar Panels Pros And Cons

Solar Power Purchase Agreements
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2. Understand Power Purchase Agreements (PPA)

Another option you may encounter is a solar power purchase agreement, or PPA. In this arrangement, solar panels are installed on your property at no upfront cost, but instead of a fixed monthly fee as in a lease, you pay for the electricity generated by the solar panels during the billing period.

Solar PPA providers generally charge a per-kilowatt-hour rate slightly lower than local electric tariffs to make the deal attractive. Be sure to examine the agreement thoroughly, as some PPA contracts may attempt to charge higher rates.

Read More: Questions To Ask Solar Companies (So You Can Get The Best Deal)

Free Solar Panels From the Government
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3. You Can Not Get Free Solar Panels From the Government

It is important to note that you generally cannot receive free solar panels from the federal government. However, some government agencies have established programs that provide solar panel subsidies, primarily targeting low-income households with particular eligibility criteria.

The relevant agency will vet applications based on income level and engage qualified contractors to install solar energy systems. Additionally, other government programs might assist in reducing your energy bill expenses.

An example of such a program is California’s Disadvantaged Communities Single-Family Solar Homes Program (DAC-SASH), offering an incentive of $3 per watt of solar capacity. Given the average cost of home solar installations in the U.S. ranges between $3 and $5 per watt, programs like DAC-SASH have the potential to cover up to 100% of the system’s expenses.

Read More: Do Solar Companies Negotiate?

Minimize the Initial Cost of Solar
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4. You Can Minimize the Initial Cost of Solar

While free solar is not a program that is available, there are options that will reduce the initial cost of solar that you should take advantage of if you qualify.

Tax Credits

Federal and State Tax Credits can help reduce the upfront cost of a solar energy system. The solar investment tax credit (ITC) provides a 30% tax deduction for project costs, while some states offer additional tax credits. These state credits can be combined with federal ones to save even more on your solar system.

Tax Exemptions

States may also provide tax exemptions for solar panels:

  • Sales tax exemption means you won’t pay local sales tax on solar panels and mounting equipment, providing an immediate discount on your purchase.
  • Property tax exemptions ensure that the increased home value due to your solar installation is untaxed. For example, if your home is valued at $500,000 and you install a $25,000 solar system, the property taxes will still be based on the $500,000 value.


Solar rebates are direct cash incentives for installing solar systems, typically offered by government agencies or local utility companies. These can be combined with tax credits, but the rebate should be applied first to determine the net system cost for calculating tax credits.

Additional Measures to Lower Solar Costs

Solar Renewable Energy Certificates (SRECs) provide extra cash flow beyond utility bill savings, though they do not reduce the upfront cost. Homeowners earn SRECs based on their solar energy production, and these certificates can be sold in specific markets to companies required to support renewable energy in their state.

Taking advantage of these incentives and financing options like low-interest solar loans can help minimize upfront costs while avoiding lease or PPA agreements.

Read more: How Long Do Solar Panels Take to Pay for Themselves?

Select a Trustworthy Solar Company
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5. You Need To Select a Trustworthy Solar Company

When searching for a solar company, prioritize those offering high-quality products and expert installation. A strong warranty is crucial, as it safeguards your investment and guarantees free replacement for any defective components during the warranty period, ensuring continuous savings on your monthly power bill.

Consider companies like SunPower, a leading solar provider in the U.S. with highly efficient proprietary solar modules. With a 25-year product warranty and the option of a 25-year workmanship warranty when installed by approved contractors, you can trust them for system ownership and long-term savings.

Remember to compare different solar companies in the industry to make an informed choice for your solar system installation.

Read More: Can Solar Panels Power a Whole House?

The Bottom Line Understanding Free Solar
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6. The Bottom Line: Understanding ‘Free’ Solar

It’s important to note that there aren’t any truly “free” solar panels. Advertisements claiming such are often referring to solar Power Purchase Agreements (PPAs) or leases. While you might not pay upfront costs, you’ll have to make monthly payments according to the signed contract.

You can still pursue affordable solar options. Some government agencies provide energy assistance programs for low-income households, occasionally installing solar panels at no cost to homeowners. However, these installations are subsidized by the government.

In the U.S., the average cost of solar panels is around $2.94 per watt, amounting to nearly $11,000 for a 5 kW system. Depending on your location, local incentives from state governments or utility companies can help reduce the overall cost.

Considering a loan to cover the net cost of your solar project could be beneficial – after applying incentives, you can use your energy savings to pay off the loan. There are numerous solar financing options that offer lower interest rates than typical personal loans.

Read More: The Truth About Why Solar Panels Are Not Worth It

Frequently Asked Questions About Free Solar Panels
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Frequently Asked Questions About Free Solar Panels

You might be curious about the concept of free solar panels and how they work. Let’s address some common questions:

  • What are free solar panels? They are offered by some companies which typically mean they provide the solar panels and installation at no upfront cost to you. Instead, you agree on a long-term power purchase agreement (PPA) or solar lease.
  • Will I save money with free solar panels? Yes, by using solar energy, you can reduce your electricity bill. However, the amount saved depends on factors like your location and kilowatt-hour rate.
  • Are there any other financing options for solar panels? Yes, there are $0-down solar loans, allowing you to own the solar system and benefit from federal and local incentives.

Remember to examine the fine print and different solar financing options to make an informed decision.

Read More: Best Solar Panel Kits (Reviews & Buy Guide)