Can I go solar for free and is there really such a thing as free solar panels?
As Americans begin taking climate change more seriously, there’s also been an increased demand for renewable energy, especially solar and wind. For many Americans, the promise of free solar panels are especially attractive, but are they really free? Our goal is to demystify what companies mean when they advertise free solar panels.
To do that, let’s start by looking at consider the three different ways you can go solar in your home.
1. Cash Purchase
The first option, is to buy the solar panels outright. There are obvious benefits to doing this. First, you own the solar panels, which means you won’t have any monthly payments to make and interest to pay. Depending on the company you go through, odds are good that there will still be a warranty. You also get all the benefits of any tax credits and rebates that are available, such as the 30% Federal Tax Credit and applicable state incentives.
You can also take out a loan to finance your solar panels. Most often, this means a small or no down payment, and you simply pay for the system each month at a low, fixed cost. Most companies that offer loans to finance solar panels will cover installation, offer warranties, and will monitor your energy production for you. Again, usually the benefits of any available tax credits go to you. The biggest difference is that while you still own the solar panels, you pay over the course of 10-20 years, rather than upfront, meaning you pay more in interest and potential fees. For homeowners that are not able to buy them outright, this is a great option.
Leasing also allows you to pay the costs over time, although when you lease, you don’t own the solar panels. Usually this is what companies mean when they say they offer free solar panels—in most cases there’s no down payment, nor is there as much risk to you, because you never own the solar panels. The confusion comes in when solar sales companies don’t make it clear that a homeowner will still need to make monthly solar lease payments. Although, the payments of the solar lease in combination with their new electricity bill will be lower than just their original electricity bill.
So yes, both leased and loaned solar panels may be free when it comes to upfront costs, however they there will still be a monthly payment. Of course, as with anything, there are trade-offs with a lease, loan or purchase. Do your research and find what works best for you.
For many consumers, purchasing (whether upfront or with a loan) is best if you want to maximize your financial benefits, especially if you are eligible for tax, or are hoping to boost the market value of your home substantially.
Leasing, however, may be the best option if you are simply interested in reducing your electricity bill with no money out of pocket, ensuring you use renewable energy where possible, and are worried about the responsibilities of upkeep or repair and are not looking to put down an initial financial investment.
Cleaner NRG works with solar installation companies that offer purchase, loan and lease options and make it clear to the customers that they speak with that although they may have the option of $0 down going solar is not free.
Do you want to see if your home qualifies for a $0 down option in under 5 minutes?