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Nothing in Life is Free…Including Solar Energy Systems

Lately we’ve noticed a lot of advertising in Westchester, Rockland County and the greater New York area claiming that solar energy installation is free.

As advocates for the solar energy industry—and its growing body of homeowners—we feel the need to explain why this advertising is misleading. Companies who advertise “free installation” are usually offering homeowners a lease option, whereby the homeowner does not own the system, but instead leases the system for a 20-year period from the solar company. The solar company owns the system and is responsible for its operation and maintenance for the life of the term. The system resides on the homeowner’s roof.

While this may sound economical, there are some serious considerations with leasing. Not only is this option not “free”—as with anything else you lease, there’s a monthly payment—but by leasing you can lose out on tens of thousands of dollars in savings. Here’s what the advertisers aren’t telling you about these “free installations.”

Dollars and Sense

Solar energy systems create electricity using the power of the sun. When sunlight hits your solar panels during the day, it’s converted into direct current (DC) electricity. Inverters convert DC electricity to alternating current (AC) electricity, used to power your lights, electronics, and other household appliances. Any excess electricity you create is pushed back into the utility grid. Your meter “spins backwards” and you’re credited on your utility bill, a process known as net metering. (For more information on how solar works, please read our FAQs.)

All solar electricity production can translate into savings, because you’re not paying your utility for this power. If your system creates 1,000 kWh/month and you pay $0.20/kWh to the utility for your power, then you are saving $200 (1,000 kWh X $0.20/kWh).

When you own your system, you receive the full $200 savings each month. When you lease a system, while you save the $200 on your utility bill, you’re also responsible for a lease payment of usually $150- $180. Because of this, by owning your system, you can save tens of thousands of dollars more over the life of the system than by leasing it. Consider these numbers:

  • If you own your solar panel system, you can save around $90,000 over 30 years.

  • With a solar panel lease, you’ll save around $10,000 over 20 years.

  • Over the same 20-year period, you’ll save around $50,000 if you own your home solar energy system.

As you can see, while you may not pay upfront installation fees with a lease, you lose substantial savings over the life of the system. This is especially true when you take into account the government rebates and tax breaks available to homeowners who purchase their solar systems.

You already made the choice to buy your home. Why would you rent your solar energy system?

No Free Lunch

A solar lease is similar to leasing a car. You, the homeowner, pay the solar company for the lease each month. As with a car lease, you don’t own the system—just like a driver doesn’t own a leased car. Yet I don’t recall seeing any advertisements for “free leased cars.” This type of advertising would be deemed irresponsible, unethical, and maybe even illegal.

We will be writing more in depth about leasing vs. owning a system as well as different financing options. The purpose of this post is to remind people of what they already know – nothing in life is free. If you see an advertisement from a company stating that “Solar Installation Is Free,” what you are seeing is not the truth.

At SunBlue Energy, we pride ourselves on educating homeowners on the benefits and science behind solar energy. If you have any questions about going solar in Westchester NY, Rockland County, or the greater New York area, send us a message or call our office at (914) 222-3510.