Unveiling the hidden costs behind free solar panels

While some of the best things in life are free, solar panels are very rarely one of them. However, this has not stopped bad actors in the growing solar industry from misleading homeowners about the true costs of supposedly “free” solar panels.  

In this article, we shed light on the hidden costs behind “free” solar panels to help you make the best financial decisions for your home’s ongoing energy costs. 

Are “free” solar panels really free?

Except for very rare cases, it’s unlikely that you’ll be able to install solar panels at no cost whatsoever or that the government is “giving them away.” It’s critical to know that when solar companies advertise that they’ll install your panels for free, they’re usually only referring to upfront costs.  

Much like the saying that there’s “no such thing as a free lunch,” free solar panels are rarely legitimate offers and almost always include future payment obligations. If you saw an advertisement or someone stopped by your door offering free solar panels, it’s best to approach this opportunity with extreme caution and verify whether you are speaking with a reputable solar installer, or at worst, a potential scammer.  

How to get solar panels free of upfront costs  

Although free solar panels are rarely a reality, you can use several common adoption methods to install a PV system on your property without upfront costs. In doing so, you can find the solar financing option that works best to optimize your electricity bill savings and future cash flows.  

No-money-down solar financing

Today, many installers and third-party providers offer solar financing loans with low or zero upfront cost options. By purchasing your energy system with a loan, you may qualify for federal and state solar incentives to reduce your total investment costs. When compared to power purchase agreements (PPA) or lease options, purchased solar panels can usually create the most long-term savings and increase your property value.

Understanding power purchase agreements with solar PPAs

With free solar panel installation included, a PPA is a third-party ownership (TPO) agreement that can help you save money on home electricity expenses. In a solar PPA, contract terms are typically 20 or 25 years, the installer maintains responsibility for system upkeep (covering some or all related costs), and you purchase the electricity your panels generate at a fixed rate designed to lower ongoing utility bills.  

Renting your energy system with a solar lease

Free of upfront costs, a solar lease allows you to “rent” your system, much like a vehicle or vacation home. Like a PPA, solar leases usually last 20 or 25 years, and the installer is responsible for ongoing maintenance, though all ongoing costs may not be covered. The key difference between a lease and a PPA is that solar leases usually involve fixed monthly fees, rather than payments for the number of kilowatt-hours (kWh) produced. 

Other hidden costs behind free solar panels

Beyond the veil of free solar panels, you may encounter several other costs when going solar that could be considered hidden fees. In the same way that tickets to a live event can include additional fees as you approach check-out, it’s important to examine your solar contracts for hidden costs before making a commitment.

• Price escalators

  Most solar lease and PPA contracts include an annual payment escalator, which increases monthly rates by a certain percentage each year. This escalator is designed to reflect the rates at which utility electricity prices rise.

• Cancellation fees

  If you need to end your solar PPA or lease prematurely, your installer may charge a cancellation or transfer fee.

• Roof replacement

  When an aging roof is near the end of its lifespan, it may not be safe or worth it to install solar panels before a complete replacement.

• Electrical upgrades

  Particularly in older homes, installing solar panels can necessitate an electric panel upgrade, which may or may not be included in your agreement.

• Equipment replacement

  When solar components require maintenance or replacement, these costs may be covered by your warranty or lead to out-of-pocket expenses.

• Insurance adjustments

  Depending on your policy, you may need to update your homeowner's insurance coverage after going solar.

• Value inflations

  If a company exaggerates how “free” solar panels are, they may also overinflate a proposed system’s value with overpromised electricity production or savings calculations.

To find the ideal solar solution for your home, it's advised to compare offers from multiple reputable providers. By debunking “free” solar panel claims and evaluating all potential costs incurred, you can find the best installation for your home with the greatest return on investment, also known as ROI, rather than the lowest costs.

Key takeaways  

In short, there may be no such thing as free solar panels, but this should not stop you from saving money on your electricity costs with renewable power.  

There are many ways to go solar without any upfront costs, including financing, leasing, and PPA programs. To find the best solution for your home, thoroughly review potential contracts for warranty coverage, hidden fees, and potential future expenses.

See how much you can save with an Enphase Home Energy System.

“Free” solar panels FAQs

Can I get free solar panels in my state?

No matter where you live in the U.S.—whether California, Florida, New York, or elsewhere—it’s very unlikely that you can install solar panels with no out-of-pocket costs. If you want to avoid an upfront payment, the availability of solar PPA, lease, and financing programs vary from state to state. To review available options in your area, consider contacting a solar expert near you.

How can I get free solar panels from the government?

When searching for how to get free solar panels from the government, you may be disappointed to learn such programs rarely exist legitimately. Instead, there are many federal and state government-sponsored tax credits, rebates, and incentives available to reduce your total solar investment costs. Most importantly, the Residential Clean Energy Credit (RCEC) for solar energy systems can be claimed as a federal tax credit worth up to 30% of installation costs.  

Are solar panels worth the cost?

Although every project has a different return on investment, yes, in general, solar panels are worth the cost to reduce ongoing electricity expenses at home. Today, solar batteries are also often worth it for homeowners looking to power more of their lives with low-cost electricity produced on-site.