Residential solar is on an upward trend in the United States, especially since President Biden signed the Inflation Reduction Act in 2022. Thanks to the legislation's 30% tax credit provision, more Americans will be able to afford solar panels in the next decade.
The U.S. Energy Information Administration (EIA) reported an additional 13.2 gigawatts (GW) of solar generation in 2021. This equated to 25% more than 2020's 10.6 GW capacity.
However, many low-to-moderate-income households that want to have solar need help paying the initial costs. About 90% of solar adopters have excellent credit, while 30% of low-income consumers have nearly zero. Additionally, households that earn $75,000 or more annually are more likely to receive 62% of the residential solar tax credits.
How do you take advantage of lower electricity bills with solar panels? There may be a way to acquire residential renewable energy without dishing out high upfront costs. Here are some of the most popular options.
Free Solar: A Misleading Statement
Many homeowners can improve their household's energy efficiency with a few changes, such as installing a programmable thermostat to adjust the interior temperature automatically according to occupancy and comfort. However, many aspire to purchase and install solar panels on their roof for a fully clean energy source.
Unfortunately, even after rebates and incentives, solar panels remain unaffordable for those that could benefit from them the most. A recent survey by Rocket Homes found that 74.8% of homeowners want solar panels but want to avoid paying the initial price tag. That leaves many wondering if it's possible to tap into residential renewable energy for free. The short answer is no — however, there are ways to avoid most or all upfront costs.
Any solar installation company offering free solar panels must be transparent with its customers. Installers may provide no-cost panels but still require the homeowner to pay for installation. Other options include leasing or signing a Solar Power Purchase Agreement (SPPA) with little to no expenses.
Solar Power Purchase Agreements
An SPPA is a contract between a third-party solar panel developer and a customer to install a system for a determinable amount of time. Usually, SPPAs last between 10 and 25 years, although every company is different.
The customer can receive clean energy with much lower electricity bills, with service providers collecting tax benefits from selling electricity.
Although homeowners don't own the panel system themselves, the advantage is a slight or zero amount due for installation. However, the downside to that is homeowners forgo tax credits and incentives for generating renewable electricity.
Buying Clean Energy
Buying clean energy outright is also an option for homeowners. Approximately 50% of customers can buy renewable electricity from their utility provider, while every person can purchase green certificates.
Green certificates enable homeowners to contribute clean, renewable energy to their utility providers even if they can't buy it from them or the marketplace.
Also known as "green tags," green certificates equate to 1 megawatt-hour (MWh) of electricity derived from renewables. The tag is then sold to a utility company and made purchasable at a competitive price.
What Is Community Solar?
A community solar program is an option for low-income residents with high utility bills and an inability to buy panels outright. Community solar delivers equal access to generation with potentially zero upfront costs.
Companies like GRID Alternatives Mid-Atlantic have helped families save over $100 million in electricity bills while offsetting 315,000 tons of greenhouse gas emissions from fossil fuel energy sources.
A community solar program benefits numerous people and businesses within a community. Customers can buy or lease panels and earn an electric bill credit for their share.
Community solar is ideal for low-income families, those who don't own a home or live in multifamily housing. Nearly 5.3 GW were installed in solar communities across 41 states in the third quarter of 2022.
Renewable Energy Is Possible for Everyone
You don't have to be wealthy to enjoy the rewards of having clean, renewable energy run through your home. You also don't have to use your savings to afford and reap the benefits of solar panels. Programs are available to consumers of all backgrounds to ensure green power is accessible and affordable for everyone.