Introduction
The phrase ”free solar panels in California” easily draws the attention of many, more particularly in states like California, which dominated the adoption of solar energy. You get a solar power system set up at your property without an upfront cost. But it really isn’t all that simple. This article explores the issue of “free solar panels” in California, how such offers do work, and if they are fully free.
The concept that usually comes to mind when people hear “free solar panels” relates to getting a solar energy system up and running for absolutely free, no matter what, and with no strings attached. In this regard, “free” would mean these solar financing options being discussed include solar leases or PPAs, or even the government incentives that drastically reduce the up-front cost of installing solar. These financing models enable a homeowner to install a solar panel without paying the full amount upfront, although it is not 100% “free” in the strictest meaning of the word.
How Solar Leases and PPAs Work
Solar Lease
A company comes to your property and installs solar panels; it then charges you a fixed monthly fee to make use of their system. The solar panels belong to the solar leasing company, so you get lower electricity bills as the panels generate power. Many times, the lease payment lessens the previous electricity bill, thus creating immediate savings.
- Pros:
small or no out-of-pocket cost. Savings on electric bills start immediately. Maintenance and monitoring are typically built in. - Cons:
You partly share the incentive and credit for the solar panels. Avoid the above-listed tax and the increase in home value.
The lifetime cost may work out to be more than purchasing the system.
Power Purchase Agreement (PPA)
A PPA is like a lease, except this time you do not pay a fixed monthly fee but rather you only pay for the generated electricity, paying for less generated power by the solar panels than from your utility. The solar company installs the panels on your roof, sells you electricity at a discounted rate, and owns the system.
A few pros and cons are listed below:
- Pros:
Lower electricity costs than Installing a system yourself or purchasing a system. No maintenance to worry about. - Cons:
You forgo the tax incentives and rebates. Long term, the savings may be less than if you were to purchase a system.
Government Programs and Incentives
While the government providing “free solar panels” is largely a myth, there are several California programs or incentives that can drastically reduce the cost of going solar:
California Solar Initiative (CSI)
The CSI was a state program providing rebates for residential solar installations. While the program has largely phased out for residential projects, some utility companies still have rebates, which can help partially offset installation costs.
Federal Solar Investment Tax Credit (ITC)
The ITC enables a homeowner to deduct 30% of a solar energy system installation cost from federal taxes. Such an incentive can drastically shave off the upfront cost of going solar because it is so huge.
Net Energy Metering (NEM)
NEM allows homeowners in California to sell electricity generated by solar panels back to the grid when there is excess production, subsequently further lowering the overall electricity bill of the customer and strengthening the return on investment from this technology.
Property Assessed Clean Energy (PACE) Financing
PACE financing occurs when homeowners pay for the solar panels via their property taxes. The following program provides long-term, low-interest financing by which solar power just may become a dream realized in the lives of many who do not have to come up with any cash upfront.
You Still Pay for Electricity: Under a PPA, you still pay for electricity; it is just a minimum percentage less than the utility.
You Do Not Own the System: With a lease or PPA, ownership of the system is always transferred to the solar company. You won’t be eligible for any of the federal tax credits, rebates, or increase in property value as ownership remains with the solar company.
Long-Term Costs: Over the life of the agreement, it will probably cost you more than if you had just bought the system outright. This is a big factor to consider, especially when you weigh the lifetime value of owning the system.
Is a “Free Solar” Offer Right for You?
Deciding if a solar lease or PPA is the right way for you will very much come down to your finances, your energy needs, and long-term goals:
Short-Term Savings: With $0 down for a solar lease or PPA, you can get immediate savings on electricity bills. Solar maintenance and monitoring are taken care of by the solar company.
Long-Term Savings and Ownership: If you’re interested in the full level of long-term savings and maximizing the value that solar adds to your home, then buying the system directly or through financing is usually the best bet. Being a system owner maximizes tax credits, rebates, and potential home equity upticks.
Independence in Energy: In case independence in energy is your main concern, owning the solar system can provide you with the highest control with time and benefits. All in all, in terms of lighting, with time, you will be able to add energy storage options like solar batteries, which further raise your energy security and independence from the grid.
Conclusion
The idea of “free solar panels” in California is commonly associated with financial mechanisms like solar leases and PPAs, wherein a household can have a solar system installed at little or no upfront cost. Although this would offer a person savings from day one, it is not actually “free” and comes with monthly payments or a contract agreement. For those wanting to maximize long-term savings or gain through solar ownership, purchasing a solar panel system directly or with financing is often the best way. However, for those seeking short-term savings, along with ease and simplicity, a lease or PPA may in fact be a reasonable alternative.
Get a Quote In case you are interested in integrating an inverter with a solar charger into your power system, do not hesitate to contact us today for your custom quote.
FAQs
Are “Free Solar Panels” Really Free?
No, “free solar panels” usually relate to financing; it’s like when people mean leasing or PPA finance where you pay for the electricity generated by the panels, but you don’t pay for the system’s functioning per se.
What’s the difference between a solar lease and a PPA?
A solar lease is where a customer pays a fixed monthly fee to use the solar panels. In a PPA, a customer simply pays for the electricity generated by the system at a rate lower than the rate their utility charges.
Indeed, tens of thousands of American homes currently receive solar power through solar leases, PPAs, and some of those options for financing, such as PACE. Again, there is no initial capital outlay for solar panels, though, of course, ongoing payments will be required.