If you’ve seen solar advertising popping up in your newsfeed or peppered through your online search results, there’s a good chance you’ve encountered certain promises that seem too good to be true. While offers like “Go solar for free,” “Get free solar panels,” or “The government will pay you to go solar,” may sound great, they’re hiding the details with the hope that you’ll click first and ask questions later. And the truth is usually waiting in the fine print. (Hint: It’s all about the financing!)

To help you kickstart your renewable energy journey with confidence, we’ve put together this guide to separate fact from fiction when it comes to misleading solar deals and the financing truths behind them.

"Free solar panels" advertisements: What do they mean?

When you see an advertisement offering free solar, what they're really offering you is solar financing.

Usually, this means a business offers you solar panels with zero money down. In other words, you won't need to pay anything upfront to install your solar energy solution. That said, you will need to enter into an agreement and pay the money back in installments.

This is an enticing prospect, and there are many great reasons to start your clean energy journey with a zero-down solar installation. Still, you must know the facts before you agree.

To elaborate on this, let's explore different types of solar financing.

Solar financing explained: How does it work?

If you’re looking for affordable solar panels in 2024 or are trying to get solar installed with little to no upfront costs, below are some popular finance options. While the solar panels aren't free, they generate electricity from the sun that can provide significant savings on your electricity bill.

Solar leases and PPAs

Solar leases and power purchase agreements (PPAs) are modern financing options. Under these arrangements, a solar company will install a solar panel system on your roof with no up-front cost (for qualified customers), while also handling maintenance or repairs as outlined in your agreement throughout the term of your lease or PPA.

Much like renting an apartment or a car, you don't own your solar equipment when entering a lease agreement or PPA. The length of your solar agreement will vary depending on your provider.

The primary benefit of solar leases and PPAs is cost savings. You can save on your electricity bill without having to pay for the system itself. And, because you don’t own the solar system, you’re generally not responsible for any necessary maintenance or covered repairs.

However, because you don’t own the system, you won’t be eligible for some of the rebates and incentives that cash and loan purchasers may enjoy. Instead, these will be passed along to the solar company or financier who legally owns the system—a practice that can help those companies offer lower lease or PPA payments to their customers in the first place.

In a time when inflation has caused the cost of almost everything to go up, signing up for a lease or PPA can provide some much-needed savings, often with no upfront cost.

Solar loans and ownership financing

Just like financing the purchase of a car, loans enable you to purchase solar panels and pay them off over time with monthly payments (plus interest). Most solar companies offer loans with little to no money down for qualified customers.

Owning your system can provide you with greater savings potential over time than leases or PPAs. The payback period can vary from under ten years to longer, but will ultimately depend on your system's size, cost of electricity, interest rates, and your financial situation. Once you break even on your investment, the rest of the electricity your system produces is essentially “free.”

The downside of financing your solar installation with a loan is the added money you’ll spend in interest. Interest rates for solar loans vary and are generally impacted by inflation and other economic factors that impact rates for home and vehicle loans too.

Cash purchase

Purchasing your rooftop solar panel system outright offers the greatest value throughout its 25+ year lifespan. Despite the initial cost, you can enjoy all the financial advantages and savings from going solar including any tax credits and other incentives for which you may qualify.

"Free solar panels from the government": Another popular claim

Another popular claim being made online involves the idea that the government has a special program where they’re giving away panels for free to a select number of homes across the country. This claim is false, but there is a tax incentive for solar that has been approved by the federal government, and advertisers are referring to this when making the ads you see online.

Federal tax credit

The Solar Investment Tax Credit (ITC) is a federal tax credit for those who purchase solar energy systems. The credit, which is applied to a homeowner’s federal income tax return debt, is equal to a percentage of the cost of eligible equipment.^*Federal and state tax credits and local incentives vary and are subject to change. SunPower does not warrant, guarantee or otherwise advise its customers about specific tax outcomes. Consult your tax advisor regarding these solar tax credits and how they apply to your specific circumstances. You can also visit the dsireusa.org website for information on incentives available in your area.

As of 2024, this federal incentive allows those who qualify to claim 30% of their equipment and installation costs as a credit toward their federal tax bill.^*Federal and state tax credits and local incentives vary and are subject to change. SunPower does not warrant, guarantee or otherwise advise its customers about specific tax outcomes. Consult your tax advisor regarding these solar tax credits and how they apply to your specific circumstances. You can also visit the dsireusa.org website for information on incentives available in your area. The tax credit value applies to systems installed and operating before December 31, 2032.

Local rebates and incentives

Many states offer incentive programs like tax credits, but availability varies wildly from state to state. Depending on your location, you also may have the opportunity to participate in net metering initiatives, where your utility company reimburses you for surplus kilowatt-hours (kWh) of electricity you produce and send back to the grid.^*The availability of net metering varies by location and is subject to change. Your SunPower Dealer can help you determine if you qualify. You can also visit the dsireusa.org website for detailed solar policy information.

Additionally, some counties, local municipalities, and utilities offer financial rebates to assist with the initial expenses associated with installing solar panels.^*Federal and state tax credits and local incentives vary and are subject to change. SunPower does not warrant, guarantee or otherwise advise its customers about specific tax outcomes. Consult your tax advisor regarding these solar tax credits and how they apply to your specific circumstances. You can also visit the dsireusa.org website for information on incentives available in your area.

Explore your solar options with SunPower

SunPower is changing the way our world is powered by making solar and storage more accessible to everyone. With nearly 40 years of dedicated solar experience, we're the top-rated U.S. solar company with over 15,000 five-star reviews.^*Based on public solar providers in the U.S. Includes average of BBB, Yelp, ConsumerAffairs, BestCompany, Google, Solar Reviews and Energy Sage review scores as of 10/22/23. If you're considering installing solar panels, energy storage, or EV charging at your home, make sure you talk to SunPower.

To get a quick estimate of how much you'll save with solar, whether you pay upfront, finance your purchase with a loan, or opt for a solar lease or PPA, check out our solar calculator. You can also give us a call at 1-800-SUNPOWER to speak with a solar advisor today.