It’s no secret that solar panels aren’t exactly cheap. Sure, they can be cheaper in the long run, but the large up-front cost can be a deterrent for some. Thus, you might find yourself looking for free solar panels.
But hold on. If the cost of solar panels is so high, is it even possible to get them for free? The reality is that it probably isn’t possible to have the entire cost covered up front, but you might be able to take advantage of some cost-saving incentives.
Truly Free or Just Free Up-Front?
Have you ever seen one of those ads for new cars that offer something like “no interest financing for 36 months” or something to that effect? These offers might sound enticing, which is exactly the goal–to get as many people in the door as possible.
Any company selling something that isn’t cheap knows the cost could be intimidating for many people, so they lure you in with “no money down” offers. Companies that sell (and install) solar panels are no different; they might offer to install them with no money down.
They might even market them as free . But, of course, they aren’t really free. You will have to pay a monthly cost, effectively leasing the panels.
In such cases, you don’t actually own the panels. But ownership is what affords you the biggest cost savings (in the long run). Once you have recouped the cost of the panels, it’s smooth sailing–especially if your system has a high enough capacity to cover all of your energy usage.
Leasing panels isn’t all bad, though. Since the panels on your roof are what generate the electricity, you will likely pay less per month than you were paying for electricity previously. Still, it goes without saying that if you are paying a monthly fee to the company that installed the panels, you aren’t getting the best possible return on your investment.
Lowering Your Costs
So, what if you want to avoid these monthly costs and do it yourself? The panels will likely pay for themselves in the long run, but is there any way to make that happen even faster?
As it turns out, there is. Let’s look at a couple of those options.
Solar renewable energy credits, or SRECs, are another way you might be able to quickly recover some of the cost of your solar panels.
How it works: The easiest way to understand SRECs is that they are credits for the energy you produce. For every 1,000 kW of power you produce, you’ll be eligible for one SREC. The dollar value of SRECs can vary widely; from $15 up to $300.
SRECs were created due to the renewable portfolio standard (RPS) or renewable electricity standard, which mandated an increase in renewable energy production.
Only a handful of states have SREC programs (plus Washington, D.C.). At the time of this writing, here is where SRECs were available:
- District of Columbia
- New Jersey
As you can see, only a small portion of the population is represented here, but if you live in one of these places, you’ll definitely want to look into SRECs.
There doesn’t appear to be a central database for SREC incentive amounts so you will have to research your state. States often resolve to purchase a set number of SRECs. For example, Delware resolved to purchase up to 15,000 SRECs in 2019.
If you’ve wondered if there are tax credits available for solar panels, the good news is that there are. According to Consumer Reports, there is currently a 26% tax credit (in 2020) for both purchase and installation costs. That is a pretty sizable chunk.
That said, the tax credit was 30% in 2019 and it will continue to decrease to 22% in 2021. Beyond that, it’ll be just a 10% credit.
While these credits won’t make or break your installation, it’s clear that the government is purposefully decreasing the credit every year.
Also note that there may be substantial rebates available from your state and local governments, so be sure to check those as well.
If you live somewhere that has SRECs available, that plus tax credits are going to amount to substantial savings. However, there are several other incentives for which you may be eligible. Every state has a laundry list of incentive programs that you may want to investigate.
The Database of State Incentives for Renewables & Efficiency (DSIRE) is a great place to state. It has a map of incentives for every state, and each state has dozens of incentives available.
Not all of them are solar incentives; some apply to wind and others are loans rather than rebates/credits. Still, there are a ton of programs here that may help you reduce your costs even further.
When you start to add up all these incentives, the initial high cost of solar power isn’t looking quite so bad.
Used Solar Panels
Believe it or not, it is actually possible to find solar panels used. You may find them used on Amazon, Facebook Marketplace, Craigslist, and so on. And if they are used, the panels will likely be cheaper than they were when they were new.
However, there are several things you have to keep in mind when buying used items. Many of the benefits mentioned here, such as tax credits, are not going to be available if you buy used.
This makes sense because tax credits are meant to incentivize more people to adopt renewable energy. But if you’re buying used, the net number of people using renewables hasn’t changed.
And it’s not just about tax credits. There are other things you have to keep in mind, such as warranties. Most solar panels come with at least a 10-year warranty (some have up to 25-year warranties).
Yes, solar panels last quite a long time. The good news here is that usually a warranty can be transferred. But if you do decide to buy used panels, it would probably be wise to ask the seller if they have the original warranty.
So, yes, buying used solar panels may seem like a good idea, but may want to calculate some of your savings via tax credits and other incentives before committing to buy.
Free Solar Panels – or at Least Cheap Ones!
It’s not very likely you will be able to find someone who will just plain give you brand-new solar panels for free. Still, it’s much cheaper to generate power this way, and you can even turn a profit if you produce more electricity than you consume in a given month.
If you are able to do so on a consistent basis and are also eligible for some combination of SRECs, tax credits, and other incentives, it’s easy to see that solar panels can pay for themselves in due time.
In fact, most of the people I have heard talk about their installs said they would pay for themselves in under 10 years, often without taking advantage of all these incentives.
So while they can certainly be a significant cost up-front, the long-term cost savings can make them well worth it for sure.
Have you purchased your own solar panels? How was the experience? How long before you break even on the cost? Let us know in the comments.