Is “Free Solar” ever really free?
If you’ve ever searched for solar options, had a solar rep knock on your door, or walked into a hardware store you’ve probably been exposed to ads or companies promising “free solar panels.” It’s an enticing offer at face value—who wouldn’t want to cut their electricity bill without paying a dime? But as the saying goes, if it sounds too good to be true, it probably is.
Let’s break down the reality behind the term “free solar” and uncover what these deals actually entail.
What Does “Free Solar” Actually Mean?
When companies advertise free solar, they’re usually referring to solar leases or power purchase agreements (PPAs). These financial arrangements allow homeowners to install solar panels on their roofs with little to no upfront cost. However, there’s a catch—you don’t actually own the system.
Instead, a third-party company owns the panels, maintains them, and sells you the electricity they generate. While this can still save you money on electricity bills, it’s not the same as owning a system outright. Typically the savings are anywhere from 10%-30% depending on several factors.
The Difference Between Solar Leases and PPAs
Both solar leases and PPAs are designed to provide homeowners with clean energy at a reduced cost, but they work slightly differently:
Solar Lease: You pay a fixed monthly fee to rent the solar system, similar to leasing a car. The system generates electricity, and you use it as needed, but you don’t benefit from incentives like tax credits or net metering in the same way a system owner would.
Power Purchase Agreement (PPA): Instead of renting the system, you agree to buy the power it produces at a set rate per kilowatt-hour. This rate is usually lower than your utility’s, but again, you don’t own the system or receive financial incentives.
Why “Free” Solar Isn’t Actually Free
Here’s why these “free” solar programs can be misleading:
You’re Still Paying for Power – While there’s no upfront cost, you’re still paying monthly fees for the electricity produced by the panels, though I suppose you aren’t technically “paying” for the panels themselves since you don’t own them.
No Ownership Benefits – Homeowners who purchase solar outright (or finance it with a loan) can take advantage of tax credits, rebates, and increased home value. Lease and PPA customers don’t get these benefits.
Long-Term Contracts – These agreements often last 20-25 years, locking you into a contract that may have escalator clauses, increasing your payments over time.
Selling Your Home Can Be Tricky – If you move, you’ll need to transfer the lease/PPA to the new owner, which can complicate the sale process and discourage potential buyers from the sale of your home.
When Leases and PPAs Are Disguised as Something Else
Some solar companies try to rebrand their lease or PPA agreements with creative marketing language to make them sound like an even better deal. They might call it a “solar membership,” an “energy savings plan,” or another term that downplays the reality of a long-term contract. These programs still work the same way—you get solar panels on your roof, but you don’t own them, and you pay for the power they generate.
While these arrangements can still be beneficial under the right circumstances, homeowners should be fully aware of what they’re signing up for. A lease or PPA can be a good fit for someone who wants lower electricity costs without maintenance responsibilities, but it’s not the same as truly free solar.
How to Get the Best Deal on Solar
If you’re serious about going solar, consider all your options:
Purchase with Cash – The best long-term savings come from outright ownership.
Finance with a Solar Loan – Loans allow you to own the system while spreading out payments.
Compare Lease/PPA Terms – If leasing, make sure you understand the contract length, escalation rates, and buyout options.
Read the Fine Print – Always review contracts carefully to ensure you know what you’re agreeing to.
Use an Independent Solar Consultant - Having a 3rd party solar professional can help ensure a transparent and smooth solar process.
The Bottom Line
Solar energy is a fantastic investment, but “free solar” is rarely, if ever, truly free. It’s crucial to understand the difference between ownership and third-party agreements before signing any contract. While leases and PPAs can offer cost savings, they come with limitations that homeowners should be aware of.
Want to explore the best solar option for your home? True Solar Consulting can help you navigate the process and find the right solution for your needs. Contact us today to learn more!