You may be coming across offers touting the ease and accessibility of “free solar” packages, claiming that by signing up to lease solar panels for your home you can enjoy the cost savings of switching to solar energy without spending a dime. These claims, like many other things that seem too good to be true, are just that, and don’t tell the whole story. Getting involved in such a deal could cost you time, money and frustration down the road. Let’s take a deeper look at these offers and why that is.
When a solar panel installation company pitches “free solar panels,” what that usually means is that they will install solar panels on your roof, free of charge as part of a solar lease or solar power purchase agreement, otherwise known as PPAs. In such deals, a company installs solar panels on your home for no up-front cost, but—crucially—you do not own the panels, or the energy they produce. You purchase that from the company that installed the panels.
Basically, you agree to let them use your house to produce energy, and they sell this energy back to you for a 20% discount. Under this agreement, you will likely be able to cut down your monthly utility bill a bit, but you lose the ability to make money from your solar system.
One of the other significant downsides of entering into one of these “free solar” leasing agreements are the leases themselves, which run 20-25 years on average. These leases stick with the house and need to be assigned to any new homeowner should the house be sold. Having to convince a prospective home buyer to enter into this lease—especially if it’s been a few years and there are now much better options on the table—can make the selling process even more complicated and cause buyers to walk away.
As noted in our recent blog comparing purchasing vs. leasing a solar energy system, when you opt to lease you lose control of decisions regarding the system on your own house, and miss out on valuable tax incentives and renewable credits that homeowners get when they make the switch by purchasing a solar energy system. In a lease agreement, both of these perks go to the leasing company.
Both leasing and purchasing a solar energy system provide the benefit of a reduced carbon footprint, but the leasing option—despite the tantalizing free solar program—is simply an inferior deal. Traditionally, leasing companies have relied on the up-front cost of purchasing solar to be the deterrent from purchasing that drives interested consumers to their product. However, at NJ Solar Power we’ve eliminated that edge entirely through our zero money down, low-interest finance plans. These options are tailored specifically for your needs and goals with maximum profits in mind, and include a plan that returns the entire cost of the system in as little as six years!
The data is in and the choice is clear. If you’re going solar, purchasing your system is the smarter, more cost-efficient route.