What's the Catch With Free Solar Panels?
Summary
There are four, and the first is that they are not free. A "$0 down" or "free panels" offer is a lease of 15 to 20 years or a power purchase agreement of six to 25 years, and you pay every month of it. Second, the payment usually rises: the CFPB found annual escalators of 1 to 5 percent, which turns 15 cents per kWh into 18 to 38 cents by year 20. Third, you do not own the system, so any tax credit or incentive goes to the company. Fourth, getting out early is hard and expensive, and selling the house means a buyer who must take over the contract. The FTC's separate warning: a door-to-door pitch for free panels paid by a government program is likely a scam.
Catch one: it is a 15-to-25-year bill
The FTC's consumer guide says plainly that going solar is not free. What a "free" offer describes is a lease, which the CFPB's August 2024 report puts at 15 to 20 years with no down payment, or a power purchase agreement, in which you buy the electricity the panels on your roof make, over contracts of six to 25 years.
Catch two: the escalator
Many leases raise the payment by a set amount each year, and many PPAs raise the per-kWh rate by 1 to 5 percent a year. Starting from 15 cents:
| Annual escalator | Rate in year 20 |
|---|---|
| 1% | about 18.1 cents |
| 3% | about 26.3 cents |
| 5% | about 37.9 cents |
A rate that beats the utility in year one can be above it in year twelve; the comparison that matters is against what the utility will charge then, which nobody knows.
Catch three: the incentives are not yours
With a lease or PPA you do not own the system, and the FTC notes that tax credits and incentives go to the owner. For 2026 installations the federal residential credit no longer applies in any case, which removes the largest item from both sides of that ledger, but state and utility incentives still follow ownership.
Catch four: leaving, and selling the house
The FTC says ending a lease early may be difficult and expensive. When you sell, whether the buyer can take over the contract, and whether they must pass a credit check or pay fees, depends on its terms. Our Sunrun transfer guide shows what one company's process looks like; read your own contract's version before you sign.
The loan version of the catch
If the pitch is "own it for nothing down" through a loan, the CFPB found dealer fees of 10 to 30 percent of the cash price, sometimes over 50 percent, folded into the principal: on its example, a $30,000 system financed as $39,000 plus interest. Ask for the cash price and the loan principal side by side.
And the scam version
The FTC's September 2024 alert: a promise of free rooftop panels paid for by government programs, especially door to door, is likely a scam. Some government-funded programs exist for qualifying households; they are applied for, not sold at the door.
Sources
- Federal Trade Commission — Solar energy is rising in popularity, and so are scams (September 2024)
- Federal Trade Commission — Solar Power for Your Home
- Consumer Financial Protection Bureau — Issue Spotlight: Solar Financing (August 2024)
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