Do advertisements for “free” or “no cost” solar panels have you intrigued? With energy prices on the rise, it’s understandable why! In celebration of Homeownership Month, check out this article for everything you need to know about free solar panels.
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What Are Free Solar Panels?
To put it simply, free solar panels aren’t actually free.
Under most free solar panel agreements, the solar panel company will install their solar panels on your roof or property at no upfront cost to you. Although the panels are located on your property, the solar panel company maintains ownership of the panels and manages the maintenance of the panels. These arrangements are sometimes known as a solar lease or a power purchase agreement.
Once installed, you’ll be charged for the electricity you use that’s produced by the panels; you may also be charged a monthly lease fee.
Typically, no cost solar agreements have a specified lease term of around 20 to 25 years. Once the term is up, you may have the opportunity to buy the solar panels from the company. Otherwise, the company will remove them.
Will a Solar Panel Lease Help Me Save Money?
It’s possible that a solar panel lease could help you save money. That’s because solar power is usually less expensive than standard electricity.
However, solar leases can come with unexpected and expensive surprise bills, such as:
- Cancellation fees: If you decide solar energy isn’t for you, you could be fined as much as $20,000 to cancel your lease. 1
- Transfer fees: If you sell your home, you may need to pay to transfer the lease to the new homeowner. If the new homeowner doesn’t want solar panels, you may have to pay to move the panels to your new property or pay the cancellation fee.
- Damage costs: Solar panels shouldn’t damage your roof, but they could if they aren’t installed properly.
- If you replace your roof: If you need a new roof on your home and need to remove the solar panels it’s likely on you to remove and reattach so read your contract carefully!
Before signing up for a solar lease, it’s important to carefully review the contract and be prepared for any costs you may incur. Also understand that you will not receive any financial gains if the solar panels you lease produce more energy than your household uses.
Are you planning on staying in your home as you age? You may want to read Staying In Your Home as You Age
What About Solar Panel Tax Credits?
The federal residential solar energy credit is a tax credit that can help reduce the amount of income tax you owe if you install solar panels on your home. Some states also have solar energy incentives.
It’s important to note that you won’t qualify for any incentives if you’re part of a solar lease agreement. That’s because the solar company is the owner of the panels, not you.
If securing solar energy tax breaks is important to you, you may want to consider buying your own solar panels rather than leasing them.
Should I Buy Solar Panels?
Buying solar panels comes with a high up-front cost of $15,000 to $20,000 for around 20 panels. However, most homeowners can financially break even within six to 10 years and potentially end up saving tens of thousands of dollars by going solar. Check out This Old House for helpful insight into purchasing solar panels, including financial considerations, advantages and disadvantages, installation information, maintenance considerations and more!
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Final Thoughts
As they say, nothing in life is free! “Free solar panels” are actually “solar panel leases.” A solar panel lease can help you save money on energy costs, but it’s crucial to beware of hidden fees that could end up costing you in the long run. Also remember that the panels will be removed when your lease ends. If you’re considering a solar panel lease, take time to research reputable companies with positive reviews.
Owning your own solar panels comes with a large upfront investment, but could help you save on energy costs over time, plus help you score tax breaks. It’s also important to consider the installation and maintenance aspects of owning solar panels.
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1EcoWatch, Are ‘Free Solar Panels’ a Scam?, https://www.ecowatch.com/solar/free-solar-panels, June 2023.
