When people think about solar energy, they often think of the price they’ll have to pay for solar panels. However, recently, there have been a lot of companies and websites promoting free solar systems. As a result, you might be asking — can I get solar panels for free, and if so, what’s the catch? So let’s take a deep dive into solar panels and figure out what we can expect from these offers.
What Do Companies Mean by Free?
Generally speaking, when a company advertises free solar panels, they are referring to solar power purchase agreements or leases. Both offers stipulate that the company will install photovoltaic panels on your home, usually with no up-front costs. However, you won’t be able to use the generated electricity for free. Instead, you’ll be charged at a rate that’s, on average, less than what you would normally pay for a regular electric bill.
If you agree to a solar lease, it means that the company owns the solar panels that will be installed on your home. That virtually eliminates all installation costs. You’ll have to enter into a lease agreement for anywhere between 10 and 25 years. During this time, you’ll pay a monthly fee to use the solar system as well as the energy you consume. This option can be an appealing choice for those who want to enjoy the benefits of solar energy but can’t afford to pay an upfront cost.
Solar Power Purchase Agreement
Solar PPAs are very similar to leases. The main difference is that with a PPA, you’ll need to purchase the power produced by the system at a fixed rate per kWh of energy generated. Just like with a lease, there are little to no upfront costs. Therefore, a solar PPA is another way to streamline the process of getting solar panels, especially since you won’t need financing or an installer. In fact, the company will handle everything, including the paperwork and permits.
What Happens at the End of a PPA or Solar Lease?
When the lease or PPA expires, you are able to terminate the agreement, extend it, or even buy the solar energy system from your provider. If you do choose to terminate the lease, the company will remove the panels at no additional cost. However, it’s vital to make sure that this is part of the contract before signing to avoid paying unwanted fees.
The Drawbacks of Free Solar Panels
It’s important to understand that while solar leasing and PPAs can sound inviting, they do have a few drawbacks. For example, they could limit your ability to renovate or make adjustments to your property. So, you should only accept contracts that include a provision regarding the removal of panels for roof replacement or repairs.
Although you won’t pay an upfront cost, you should consider the difference between long-term savings through PPAs and leasing versus owning the panels. More often than not, while getting your own panels can be costly, it will save you money over their lifespan. Some leasing companies also include a clause in the contract that allows them to increase the monthly fee. That will further lower your overall solar savings, making solar leasing and PPAs less appealing.
Not only that, but PPAs and leasing don’t allow you to take advantage of the state and federal tax incentives. Keep in mind that government programs can reduce the cost of getting your own solar energy system by up to 26%, making solar more accessible than ever.
And lastly, leasing companies tend to dictate how many solar panels they will install and their placement on your roof. At first glance, that shouldn’t be an issue. However, it could raise concerns regarding aesthetics, especially if you live in an area with restrictive curb appeal rules. Besides that, potential home buyers might be turned off by the appearance of the panels. As a result, you’ll have less room to negotiate, meaning that you might have to accept a lower price than you wanted.
So, Should I Get Free Solar Panels?
Solar leasing and power purchase agreements can be a pretty attractive offer, especially for those who can’t afford to pay an upfront cost. However, when making a choice, it’s vital that you consider the pros as well as the cons. So make sure to do your research in order to make an informed decision. And, if you need any more help or advice, don’t hesitate to contact Atlantic Key Energy and get in touch with our experts!