Don't sign a solar contract until you read this.

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When is the last time you got something from a company for free? I mean really free, with no strings attached? Probably never, right? Cars aren’t free, major home renovations aren’t free, heck, school lunch isn’t even free. We know that nothing is free, so what makes solar for your home any different? 

If you own your home, you’ve probably been approached by a door-to-door salesperson trying to get you to go solar...FOR FREE. This, without a doubt, sounds really appealing. But as the saying goes, if it sounds too good to be true, it probably is. 

In this post, I will tell you how those “free” solar panels are anything but. From restrictive long-term contracts that come with UCC1 “liens” on your home to escalator payments for the life of the solar lease, free solar proves itself to be just like free cars and free home repairs; non-existent! 

Is it really free? 

As you’ve probably guessed, no, solar is not free and the solar leasing companies are making a LOT of money every time someone signs on the dotted line. Right now, the federal government offers solar owners a 26% tax credit just for going solar. That’s a significant discount right off the bat.  

Who gets those solar incentives?

The Federal Tax Credit is given to the solar OWNER. That’s an important detail because solar lease contracts stipulate that the panels are owned by the solar company, not the actual homeowner. And  we’re not talking about pocket change here!

Here’s an example. Let’s say you want a PV system that costs $35,000. That system would earn a 26% federal tax credit equalling $9,100. That $9,100 tax credit goes to the solar company, not you! The same goes for state tax credits and the compensation for the excess energy the panels produce. That’s a lot of money you will never see.

So, while you are not paying anything out of pocket for the solar panel installation, you are missing out on thousands and thousands of dollars in tax credits and other financial benefits that would help pay down your system in about 6-7 years. After that, you could actually make money every month!  

What happens if I want to sell my house?

Now this is where things get really sticky. Most solar lease and power purchase agreement contracts say that no lien is placed on your home. So on paper, you should be able to sell your home anytime, right? Wrong! Sadly, the reality is much different. While these solar lease companies don’t technically hold a lien on your property, they do hold UCC-1’s. This means that you can’t sell your home until you have satisfied the terms of the contract. 

There are, however, a few ways that these lease companies say you can get out of your contract.

  • Some solar lease companies will say that you can just pre-pay the contract, but what they mean when they say that is you can pay them now for all of the money they are expecting to receive in the form of energy credits, tax credits, and all of their scheduled annual price increases they plan on leveling against you over the next 20 years. You will technically be out of the contract, but they will be back to take the panels off the roof in 20 years because you still won’t own them and you definitely won’t see any of those generous tax credits I wrote about earlier.  
  • The next claim is that you can sell the contract to your potential home buyer, but the reality is nobody wants to buy your weird, complicated solar contract! Buying a new home is complicated enough, so the majority of potential buyers will walk away the second they bump up against anything that seems abnormal or confusing. They just don’t want the added trouble.
  • The next thing you can do is agree to buy the contract if your property sells, which really just translates into you losing tens of thousands of dollars on the sale of your home. That “free” solar array doesn't look so free anymore, does it?   
  • Another claim is that you can just move the panels to your new property. But beware! You have to move to a place with equal or greater sun exposure or they will flat out deny the move. Solar arrays are designed to create the greatest amount of energy possible at any given site. These solar lease companies are literally banking on the expected production of your system, so don’t plan on moving anywhere with tree cover or a west-facing roof!

Can I just cancel my contract?

The good news is yes, you can cancel your contract. The bad news is you only have three days to do so! And guess what? Nobody ever cancels their contracts in three days and in some cases, people are not even aware that you can cancel at all! Once signed, you are locked into a long-term (usually 20-years) contract that comes with all sorts of stipulations, some of which include required tree removal, tree trimming, and other permanent property modifications. This might sound ridiculous, but it is totally legal under the terms of the contract and you are required to abide by the contract or face penalties. 

Don’t they say they will perform all maintenance for free?

In most cases, solar lease companies say they will perform all required maintenance. This is really just a sleazy sales line because, in reality, solar panels are designed to be completely maintenance-free, they have no moving parts, and don’t require any maintenance at all—ever! If something does happen to one of the panels or components, they are typically covered by extremely long warranties from the manufacturer. 

Will the price of my home go up or down?

Let’s be clear here. If you lease solar panels, the value of your property will go down usually by the amount it would cost to pre-pay the contract or remove the panels. 

On the flip side, if you buy your panels outright and own the system, you can expect the value of your property to increase because the buyer is getting cheap, clean energy with no contracts and no strings attached.

Who installs the panels?

Many national solar lease companies sub-contract out their installations.

Sadly, even some smaller solar companies use subcontractors. One very important question you should ask ANY solar company is if they use sub-contractors or employ in house electricians and installation crews. 

Here at Northeast Solar, we have licensed electricians, solar designers, and installation crews on staff. We never hire out our work and never use temporary workers because we want to maintain strict quality control over everything we do, from the initial site assessment to the very end when we activate your system.

At the end of the day, you have to decide if you want to put your home in the hands of temporary workers or subcontractors, or full-time employees who are experts in their field.

Should you just buy solar?

Yes! You should absolutely buy solar from a reputable solar installer. Like I mentioned, solar owners receive some very generous federal and state tax incentives, electric bill savings every month, and compensation for excess solar energy production. Solar incentives change from state to state, but in Massachusetts (where I’m writing this), people who purchase a solar array can expect to pay off the system in about 6-8 years.

Solar ownership in Massachusetts looks really good!

Solar is a great thing to do to reduce the impact you have on the environment, but it’s also a smart investment.

  • $1,000 state tax credit
  • 26% federal tax credit that is based on the total cost of the system
  • Significant savings on energy bills
  • SMART solar credits for your energy production
  • Solar will not increase your property tax rate in Massachusetts for 20 years
  • Homes with owned solar have a higher property values

What to look for in a solar company.

There are a lot of really great local solar companies to choose from, but some stand above the rest. 

In general, you will want to look for a company that offers workmanship warranties. Many national solar lease companies (and even some local companies) hire temporary workers or subcontractors to complete the entire installation. Not good! You should be able to trust that the company you bought the solar from is going to be there for you should something go wrong with the installation. Subcontractors are hired to do so many jobs that the quality of work suffers and when they are done with your installation, they are off to the next job and they’re not looking back! 

Look at Google and Angie’s List to read customer reviews. Is the company you’re considering communicative? Do they take the time to explain the ins and outs of solar and the installation process? Do they return your phone calls and emails in a timely fashion? These might seem like petty things to consider, but they could be indicative of the kind of customer service you can expect AFTER the solar is installed.  

Solar financing.

Solar is mainstream. That’s great news for the environment and for your bank account! Banks, credit unions, and private lenders offer solar financing packages that make affording solar easier than ever. Ask your solar sales representative to go over all the options with you.

Have Questions? Give Us a Call: 413-247-6045

Or email us at: info@northeast-solar.com