As a Penny Hoarder, you probably know the measures environmentalists encourage to conserve energy can also save a lot of money.
It’s simple: Non-renewable energy costs money. Use less, and you’ll pay less. On average, families who use solar energy save over $83 per month.
There’s just one catch: Household solar photovoltaic (PV) systems cost about $23,000 to install.
Sure, they’ll save you twice as much in electricity costs during their lifetime. But where does the initial investment come from?
26 States Where You Can Get Free Solar Panels
It turns out states around the U.S. have a variety of programs to support solar energy.
Some will even help you install new solar panels completely free.
In fact, 26 U.S. states have laws allowing third party companies to install solar panels for free.
Want to see if your state is one of them? Enter your address on this website to find out how much your state will give you in rebates/tax credits.
In addition to the no-money-down options, Massachusetts, New Jersey and New York have some of the best solar energy policies in the country, as ranked by solarpowerrocks.com.
In these states, not only can you receive incentives to offset the cost of solar panels, but you can also earn money — even after your system is paid for.
Here’s how much you can earn in these top states over the 25-year life of your solar energy system:
- Massachusetts: $50,286 (30.7% return on your investment (IRR))
- New Jersey: $38,250 (18.3% IRR)
- New York: $35,305 (19.8% IRR)
After you recoup costs, you can continue to profit for the life of your solar panels through a process called net metering and by selling Solar Renewable Energy Credits (SREC).
Net metering means you can export power to the grid when your solar system produces more electricity than you use. Then you can apply bill credits from the excess electricity to a future month’s bill.
You can also sell SRECs to companies that don’t meet their state-mandated targets for solar energy generation, which can amount to almost $1,000 per year, depending on how much energy your system produces.
With all of these credits, rebates, energy savings and incentives, you’ll earn back the cost of your solar energy system in Massachusetts in just four years!
In New York or New Jersey, you’ll recover costs in about seven years.
Are Solar Panels Really Free?
There are two ways to get solar panel without any money down:
- Solar Lease: The solar panel company owns solar panels, helps you install them for free and collects a monthly lease payment.
- Power Purchase Agreement (PPA): The solar panel company owns the solar panels and helps you install them for free, and you pay monthly for power (like your normal monthly power bill — but cheaper!)
These 26 states allow either solar leases or PPAs: Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Georgia, Illinois, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas and Utah.
How Much of a Rebate Can You Get?
Four states — Florida, North Carolina, Oklahoma and Tennessee — have laws prohibiting third-party ownership.
The remaining 20 states have no lease options, but haven’t prohibited them from existing in the future.
In any of these states, you’ll have to pay for your system upfront, either from savings or by taking out a loan.
If you live in one of these 24 states, you could still save money on solar panels through tax incentives or rebates.
Enter your address here to find out which rebates and incentives are available in your state.
Your Turn: Does your state or city offer solar rebates, tax incentives or leases?
Disclosure: You wouldn’t believe how much coffee The Penny Hoarder team goes through. This post contains affiliate links so we can keep the grinds stocked!
Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).