Is "Free Solar" Ever Actually Free?
Summary
No. The FTC says a door-to-door promise of free rooftop panels paid for by government programs is likely a scam, and that while some government-funded programs exist for qualifying households, "going solar" isn't free. A $0-down offer is usually a lease (15 to 20 years) or a power purchase agreement, or PPA (six to 25 years), and for that whole time the panels belong to someone else.
What a $0-down contract charges instead
The CFPB's August 2024 report says typical solar leases last 15 to 20 years and require no down payment, but in many cases the payments rise each year by a set amount. A PPA sells you the electricity the panels on your roof produce; contracts run six to 25 years, and some include escalators that raise the rate 1 to 5 percent a year.
That spread matters most near the end. Starting from a rate of 15 cents per kWh:
| Annual escalator | Rate in year 20 |
|---|---|
| 1% | about 18.1 cents |
| 3% | about 26.3 cents |
| 5% | about 37.9 cents |
The FTC's consumer guide adds that with a lease or PPA you don't own the system, so you aren't eligible for tax credits or incentives; those go to the owner. Ending a lease early may be difficult and expensive, and when you sell the house, whether the buyer can take over the contract, and whether they must pass a credit check or pay fees, depends on its terms.
The hidden fee in a solar loan
Owning through a loan has its own catch: the loan principal may not match the cash price. The CFPB found markups, known in the industry as dealer fees, of 10 to 30 percent of the cash price, sometimes above 50 percent. On its example of a $30,000 cash price with a $9,000 fee, the loan documents show a principal of $39,000 plus interest.
The FTC warns about anyone who rushes a signature or asks you to sign on a tablet without showing the full agreement, and says honest businesses state the full cost and give you time to read the contract.
Sources
- Federal Trade Commission — Solar energy is rising in popularity. So are the scams. (2024-09)
- Federal Trade Commission — Solar Power for Your Home
- Consumer Financial Protection Bureau — Issue Spotlight: Solar Financing (2024-08-07)
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