Homeowners never get the “free solar panels” advertised online. Some companies will install them for free, but homeowners still have to pay for electricity.
Some homeowners, especially those in sunny states, may be interested in solar panels as a potential way to save on their electric bills and reduce their carbon footprint. So it’s not uncommon for a person who already wants to save money to be fooled by the many ads that populate Google and social media advertising “free solar panels.”
Several viewers asked VERIFY if these ads were real. Christal asked if the government provides free solar panels. Larry asked, “I see ads all over the internet claiming that solar companies have a free government program to pay for home solar systems for free. That is right?”
Does the federal government give away solar panels for free?
No, the federal government does not provide free solar panels. There are private companies that offer to install solar panels on homes for free, but the home owner only rents the panels and still has to pay for their electricity.
WHAT WE FOUND
Both the Illinois Citizens Utilities Board and online energy marketplace EnergySage directly combat such misleading ads, saying there is no such thing as free home solar panels. They say such ads are for power purchase agreements, or PPAs for short, where you lease panels installed on your home.
A solar power purchase agreement, as explained by the Environmental Protection Agency (EPA), is an agreement in which a third-party developer owns, operates and maintains a solar energy system and the homeowner customer agrees to keep the system on their property and purchase the electricity. fixed rate for a certain period of time.
The Solar Energy Industry Association (SEIA) states that the company arranges for the design, permitting, financing and installation of a solar energy system on the customer’s property at little or no cost. The developer will then sell the generated power to the home customer at a fixed rate, which is lower than normal local rates. The contract typically lasts for 10 to 25 years, at the end of which the customer can choose between extending the PPA, removing the solar system, or purchasing the system for themselves.
A company that enters into a PPA benefits from the sale of electricity generated by the system and from tax incentives and other incentives given to the company for operating the system.
Some “free solar” ads refer to solar leases in addition to PPAs. In a solar lease, the homeowner pays a fixed monthly fee, such as $150 per month based on the system’s output.
“You have the right to use all the energy the system produces, and you will likely reduce the amount of energy you receive from your utility,” the FTC said. “If the system produces more energy than you need and your utility uses net metering, the utility can pay you or credit your bill for the energy the system returns to the grid. Your contract may allow your monthly payment to increase over time.”
But in a PPA, the customer agrees to pay a fixed price for all the electricity produced, even if the customer does not use all the electricity. The price is determined per kilowatt-hour (kWh).
“Unlike a lease, you don’t pay to use the system, and you don’t automatically buy all the power it produces,” explains the Federal Trade Commission (FTC). “You pay for the power generated by the system at the price set by the PPA provider. Some PPA providers say they charge a reduced rate for energy because they get tax credits and incentives.
The FTC urges potential homeowner customers to read the contract carefully before signing a PPA for this reason. “Most people will pay more over the life of their solar lease than they would if they bought and financed the system,” says the Illinois Citizens Utilities Council.
The US Department of Energy operates several federal financial assistance programs to encourage consumers to go solar. While these may include tax credits and rebates, none of the programs give a person free solar panels and free installation. There are some programs that may be available at the local level, such as a program in Washington that installs solar panels for households below 80% of the area median income.
Solar energy company Unbound Solar notes that a homeowner who signs a PPA cannot claim rebates or tax credits from the federal government or state government because they do not own the solar system when they install through the PPA.
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There is no federal government program for free solar panels
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