Are "free solar panels" really free?

You've probably seen the ads: "Free solar panels!" "No-cost solar!" "$0 down!" They're everywhere, plastered across social media, tucked into search results, maybe even on a flyer stuck to your door. The pitch sounds incredible: clean energy on your roof without spending a dime upfront. So what's the catch? 

Well, “free solar" usually means solar with no upfront cost, not solar you'll never pay for. Most of these offers are solar leases or power purchase agreements (PPAs), where you don't own the system, but you do get to use the electricity it generates, typically at a lower rate than your utility charges. In other words, you're trading your utility bill for a solar bill. 

The pitch has gotten louder in 2026, and for good reason. The 30% federal tax credit for homeowners who buy their own solar panels ended in 2025, which eliminated an average $9,000 tax credit kickback for most shoppers. But there is still a commercial federal tax credit through 2027, so the company offering a lease or PPA can claim that credit and, ideally, pass the savings onto you through lower monthly payments. On EnergySage, the share of installers quoting leases and PPAs nearly tripled in the first half of 2026.  

To be clear: That shift doesn't make "free solar" ads any more honest, but it does mean third-party ownership options deserve a fresh look. We'll cover what "free solar panels" actually means, whether the government will pay for your panels, and how leases, PPAs, and loans stack up now that the rules have changed. 

When companies advertise "free solar panels" or "no-cost solar programs," they're almost always talking about a solar lease or PPA. Under these agreements, a solar company (often called a third-party owner, or TPO) designs, installs, and owns a system on your roof. You don't pay for the equipment or the installation. You pay for the power instead: 

• With a lease, you pay a fixed monthly amount to use the system. 

• With a PPA, you pay a set price for each kilowatt-hour (kWh) of electricity the panels produce. 

Either way, the company that owns the system typically handles monitoring, maintenance, and repairs for as long as the contract runs. 

These deals can save you money, and they look better in 2026 than they did a few years ago. In the first half of the year, PPA rates on EnergySage were cheaper than utility rates in every qualifying state, with the widest gaps in California (59% cheaper) and Illinois (55% cheaper). And because the company that owns the system can still claim a federal tax credit, reputable providers can afford to offer lower rates. 

Leases and PPAs themselves are legitimate products. Calling them "free" is where the marketing goes off the rails. A trustworthy provider will tell you exactly what you'll pay each month and how that payment changes over time, so if a company leads with "free solar," read the fine print twice. 

Before you sign any $0-down agreement, find out: 

• How much your payment goes up each year: Many contracts include an annual escalator that raises your monthly payment or per-kWh rate by a set percentage. A modest escalator can still work out if your utility's rates climb faster, but a steep one can wipe out your savings in the back half of the contract. 

• What happens if you sell your home: Usually, the buyer has to take over your contract, or you'll need to buy out the system before you move. 

• What your options are when the contract ends: You can typically buy the system, renew the agreement, or have the company remove the panels. 

• What you'll pay in total: Add up every payment over the full contract, escalators included, and compare that number with what you'd likely pay your utility over the same stretch. 

Some companies advertise free solar for a different reason entirely: to collect and sell your information. Check out these sponsored Google ads offering "no cost solar," "free solar," and "government funded solar energy." They're all misleading. When you click on any of these ads, they bring you to pages where you need to provide personal information, including your phone number, before you can learn what the offer includes. If you enter that information, expect a lot of spam calls. 

Despite what misleading ads suggest, the federal government doesn't give away free solar panels. A lot of "government-funded solar" ads were really pointing to the federal solar tax credit, which let most homeowners take 30% off the cost of a system they bought. But that credit now works very differently depending on who owns the panels. 

The federal tax credit expired for homeowners, but not for companies 

The One Big Beautiful Bill Act, signed in July 2025, ended the solar tax credit for homeowners effective January 1, 2026—years ahead of schedule. If you buy your panels with cash or a loan today, there's no federal tax credit to claim. 

Leases and PPAs are a different story. Because a company owns those systems, it can claim a separate commercial tax credit instead. Under current IRS guidance, solar projects that didn't start construction by July 4, 2026, generally need to be up and running by December 31, 2027, to qualify. In practice, that means leases and PPAs signed in 2026 and much of 2027 may still come with credit-subsidized pricing. 

You won't see that credit on your tax return. It goes to the system's owner, and it's up to the provider whether to pass the savings along through lower monthly payments or rates. Competitive providers usually do, which is a big reason leases and PPAs have become a more reasonable option. One trade-off to know about: To keep the credit, providers have to follow new rules that restrict equipment from certain foreign suppliers, which can limit equipment choices compared with buying your own system. 

Buying your own system still makes sense for plenty of homeowners, too. Most people who go solar save between $41,000 and $155,000 over 25 years, according to EnergySage Marketplace data. Without the tax credit, ownership just takes a bit longer to pay for itself—about 10 years on average. 

What happened to Solar for All? 

The closest thing to government-funded "free solar" was Solar for All, a $7 billion EPA grant program designed to bring solar to more than 900,000 low- and moderate-income households. The EPA canceled it in August 2025. In September 2026, a federal judge in Rhode Island ruled that the cancellation was unlawful and set it aside, but the EPA has said it's considering an appeal. As of this writing, it isn't clear when (or whether) that money will reach homeowners. 

Some states run their own low-income solar programs that are separate from the federal one. Illinois Solar for All, for example, is a state program that requires approved installers to offer terms that leave income-eligible residents paying less for electricity than they would without it. If money is tight, check with your state energy office to see what's available where you live. 

State, local, and utility incentives 

Many states, utilities, and local governments still offer incentives that make solar more affordable. Some incentives, like net metering, typically benefit you no matter how you pay for your system. Others, like rebates and SRECs, usually go to whoever owns the panels. Here are some of the most common incentives still available: 

Solar panels aren’t free, but you can go solar at no upfront cost if you spread the payments out over time. And even if cutting your carbon footprint matters more to you than saving money, it’s still worth comparing your options. Prices and terms can vary a lot between companies and financing structures. 

Sign a solar lease or PPA 

Lease and PPA providers make money by selling you electricity (or the use of the system), usually at a lower rate than your utility charges. You won't own the panels, so your lifetime savings will typically be lower than if you paid cash. In exchange, you skip the big upfront bill, start saving from your first month, and leave maintenance and performance to the provider. 

These products have also gotten better for homeowners. Escalators, long contracts, and high-pressure sales gave leases and PPAs a bad reputation for years. Now, with the tax credit still flowing to system owners, many providers have improved their transparency and consumer protections. In the first half of 2026, a standard PPA on EnergySage cost 32% less per kWh than financing a system with a loan, though paying cash still came out about 33% cheaper than a PPA. 

Leases and PPAs tend to make the most sense if you'd rather not tie up savings in a big purchase, you don't want to manage maintenance, or you're not sure you'll stay in your home for the long haul. To compare the two in more detail, see our guide to leases vs. PPAs. 

Consider a pre-paid lease or PPA 

If you have some cash (or are open to financing), a newer hybrid option is worth a look. With a pre-paid lease or PPA, you pay for the entire agreement upfront at a discount, because the provider claims the commercial tax credit and passes part of it to you. Ownership typically transfers to you around year six, after the holding period the IRS requires. 

The savings can be significant. In the first half of 2026, pre-paid leases on EnergySage cost 39% less per kWh than a cash purchase, and pre-paid PPAs cost 57% less. The catch is that most contracts say ownership transfers at "fair market value" rather than guaranteeing a $0 transfer, so read the full contract and ask exactly how that value will be determined. 

Take out a zero-down solar loan 

Solar loans let you own the system without the upfront cost. With ownership comes the ability to claim available state incentives and the flexibility to manage your system as you see fit. You'll make fixed monthly payments (often with $0 down) over 5 to 25 years while benefiting from energy savings right away. And once the loan is paid off, the electricity is free, and you keep 100% of your savings. 

The trade-off is interest. Without a federal tax credit to pay down part of the balance, loans were the most expensive way to pay for solar per kWh on EnergySage in the first half of 2026. If you go this route, compare loan offers carefully and make sure your expected bill savings cover your monthly payment. Our guide to zero-down solar walks through your options.

There's no single right answer anymore. Without the residential tax credit, ownership and third-party ownership are on a much more even playing field, and the best choice depends on your budget, how long you plan to stay in your home, and how much you value owning your energy outright. 

A cash purchase or loan is likely your best fit if you plan to stay in your home for a long time, want full control over your system, and want to keep 100% of your savings once it's paid off. A lease or PPA may suit you better if you want to start saving with no money down, prefer to hand off maintenance, or want flexibility for other financial goals. And a pre-paid lease or PPA can split the difference if you can pay upfront and are comfortable trusting the provider to transfer ownership down the road. 

Solar panels may not be free, but comparing your options is. When you sign up on the EnergySage Marketplace, you'll receive personalized quotes from vetted installers in your area, and you can compare cash, loan, lease, and PPA offers side by side, with free help available from one of our Energy Advisors. 

The panels on your roof will never be free. The electricity they generate for 25 years or more, though, can make a real dent in what you pay for power, whichever way you choose to pay for them.