No free solar panels federal government program exists

Homeowners can never own the “free solar panels” advertised online. Some companies will install them for free, but homeowners still have to pay for electricity.

Some homeowners, especially in sunny states, may be interested in solar panels as a potential way to save money on their utility bills and reduce their carbon footprint. As such, it’s not uncommon for a person already looking to save money to be tempted by the many ads promoting “free solar panels” on Google and social media.

Several viewers asked VERIFY if these ads were genuine. Christal asked if the government was giving away free solar panels. Larry asked, “All over the internet I see ads from solar companies claiming a free government program to pay for free home solar systems. Is that true?”

THE QUESTION

Does the federal government give away free solar modules?

THE SOURCES

THE ANSWER

That's wrong.

No, the federal government does not give away free solar panels. There are private companies that offer to install solar panels on homes for free, but the homeowner just rents the panels and still has to pay for their electricity.

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WHAT WE FOUND

Both the Illinois Citizens Utility Board and online energy marketplace EnergySage are taking this type of misleading advertising head on, saying there is no such thing as free home solar panels. They say that these types of ads are for Power Purchase Agreements, or PPAs for short, where you rent the panels installed on your home.

A solar power purchase agreement, explains the Environmental Protection Agency (EPA), is an agreement in which an outside developer owns, operates, and maintains a solar power system, and a guest customer agrees to keep the system on their property and purchase the power at a fixed rate for a certain period of time.

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The company will arrange for the design, permitting, financing and installation of a solar energy system on a customer’s property at little or no cost, as specified by the Solar Energy Industries Association (SEIA). The developer then sells the generated electricity to the host customer at a fixed price, which is typically lower than usual local rates. The contract period is typically 10 to 25 years, at the end of which the customer can choose to extend the PPA, remove the solar system, or buy the system themselves.

A company that enters into a PPA benefits from the sale of the electricity generated by the facility, as well as tax benefits and other incentives provided to the company for operating the facility.

Some of the “free solar” ads refer to solar leases in addition to PPAs. With a solar lease, the hosting house owner pays a fixed monthly payment, say $150 per month, based on the production of the system.

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“You are entitled to use all of the electricity the system produces, and you will likely reduce the amount of electricity you buy from your utility,” the FTC says. “If the system produces more electricity than you need and your utility uses net metering, the utility can pay you or credit your account for the electricity 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 electricity generated, even if the customer does not fully consume it themselves. The price is set per kilowatt hour (kWh).

“Unlike with a lease, you don’t pay to use the system and you don’t automatically get all the electricity that’s produced,” states the Federal Trade Commission (FTC). “You pay for the electricity the system generates at a price set by the PPA provider. Some PPA providers say they charge a discounted electricity rate because they receive the tax credits and incentives.”

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For this very reason, the FTC advises potential host customers to read the contract carefully before signing a PPA. “Most people pay more over the life of a solar lease than when they buy and finance a system,” says the Illinois Citizens Utility Board.

The US Department of Energy maintains several government grant programs to encourage consumers to use solar energy. While these may include tax credits and rebates, none of a person’s programs offer free solar panels and free installation. There are some programs that may exist at the local level such as For example, a program in Washington, DC that installs solar panels for households below 80% of the area’s average income threshold.

Solar company Unbound Solar points out that if a homeowner signs a PPA, they won’t be able to claim any rebates or tax credits from either the federal or state government because they don’t own the solar power system if they install one through a PPA.

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Alley Einstein

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