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Florida Solar – Going Solar in the Sunshine State

Florida Solar – Going Solar in the Sunshine State

florida-solar

Thinking of installing solar in sunny Florida?

You’re not alone! The state ranked 17th in the most solar installed in the US in 2015. Not too bad considering Florida lacks many of the incentives that heavily discount the cost of going solar. However, the state sees excellent weather for producing your own renewable energy and homeowners can take advantage of numerous tax incentives to save even more money going solar!

Florida has some excellent policies to both encourage the growth of the solar industry and make going solar as easy as possible for homeowners. Unfortunately though, financial incentives like rebates are a huge hole in the state’s solar outlook and their general lack of financial incentives has plagued the solar industry in the state for years. Florida solar is buoyed up a bit by the state sales tax exemption and property tax exclusion and Florida homeowners are also eligible for the 30% federal tax credit as well.

The financial savings is still lower than other states with pro-solar policies, you can still save thousands of dollars going solar in Florida!

* Note that these are estimated values for informational purposes only, and do not take into account the full complexity of all financial projections. They also only apply to cash purchases, which means your numbers will be different if you lease your system or pay for it with a loan (factoring in interest).

#2 Options for buying solar panels in Florida

Florida homeowners have plenty of excellent options to own their own solar installation, from cash upfront to PACE financing. Really it’s just a matter of deciding which financing type most suits your needs. Each has their own drawbacks and benefits.

Cash Upfront

Ah, the cash purchase. No matter what you’re buying – a solar installation, a car, a private plane – you can pretty much rest assured that you’re making the most financially responsible decision if you can simply purchase the item outright. It’s simple and cost-effective. No interest rate, no loan fees, no annual rate increases (like with solar leases). However, you need a pretty big sack of money saved up to buy something as big as a solar installation. After applying the 30% federal tax credit, an average-sized (5 kilowatt) installation in Florida runs about $11,600. Many of us simply don’t have that kind of change just lying around. Thankfully, there are some excellent alternatives available to Florida homeowners! Take a look below to learn more.

If you can afford it, outright ownership of your solar installation comes with some definite perks. First, you’ll see a better return on your investment than with a loan or lease. Secondly, as the sole owner of the installation, you are eligible to receive all available financial incentives, including the federal tax credit, state sales tax exemption, and state property tax exclusion. These tax incentives drop your installation price by over 30%! That’s a sweet deal! Keep in mind though that with ownership comes the responsibility to maintain, repair, and monitor your installation. Solar is fairly hands-off. There are no moving parts, and major equipment like the panels and inverter comes with long-term warranties, so maintenance responsibility isn’t really something you should worry about. It’s just something you need to be aware of.

Leases

Leases and power purchase agreements (PPAs) are two very popular types of third-party ownership for residential solar. With leases and PPAs, solar installers provide the initial funds to install the solar system and homeowners are required to pay little to no upfront costs. To the homeowner, leases and PPAs look very similar – you pay little upfront and then pay off the installation in monthly increments over 20 years.

The state of Florida is one of the very few states in the United States that outlaws third-party ownership of solar. Utilities are the only businesses that are legally allowed to sell electricity.

Legalizing solar leases was one positive piece of Amendment 1, the solar amendment that was thankfully voted down by Florida residents during the 2016 election. Why, you ask? Most in the solar industry agree that legalizing solar leases would be a huge step forward for the state’s solar, but the amendment also included provisions backed by utilities that would’ve allowed them to charge solar customer more money. The solar industry ultimately breathed a sigh of relief when the amendment didn’t pass.

More: Solar Leases

Loan

Loans are becoming increasingly popular to finance residential solar installations. They give the benefits of ownership (higher financial savings than with leases and eligibility for financial incentives) while not requiring the high initial investment. The financial savings of a loan-financed solar installation depends greatly on the size and total cost of the installation as well as the loan details like interest rate, fees, and loan term.

Banks, credit unions, third party solar financiers, and even utility companies will offer loans for solar installations. Oftentimes solar installers will have a preferred lender they work with, so if you’re interested in taking out a loan for your solar installation, go ahead and start talking to a few different installers to see what options are available in your area.

There are also a handful of utilities throughout Florida that offer solar loans with low interest rates, including:

  • The City of Tallahassee Utilities offers 5% interest loans up to $20,000 to residential customers for a variety of renewable and efficiency measures, including solar installations, home insulation, and high-efficiency air conditioners.
  • The City of Lauderhilll’s Revolving Loan Program mainly provides small loans for high-efficiency appliances like dishwashers and washing machines, but solar installations are eligible as well. The maximum loan amount is capped at just $2500 – likely lower than your solar installation’s total cost – but the loans are interest free for the first two years! If you live in the area and are eligible for the loan, take advantage of this incredible offer from the city to at least partially pay for your installation.
  • The Solar and Energy Loan Fund, a non-profit solar and energy efficiency financier, has partnered with the Orlando Utilities Commission, St. Lucie County, and the City of Orlando to offer unsecured loans to local residents for solar installations. Interest rates range from 7% to 9.5% and the loan can last between 3 and 7 years. These interest rates are fairly high, so make sure the financial savings are there before signing the agreement.

More: Solar Loans

PACE Financing

PACE (Property Assessed Clean Energy) financing is a fairly new –and exciting – way to finance solar installations that is currently available to Florida homeowners in certain cities. Through PACE, local governments provide financing for solar installations for homeowners and/or businesses, who then repay the installation costs through assessments on their annual property tax bills.

The city of Berkeley, CA, began the first solar PACE program in the 2000s, but unfortunately this financing type has been mired in controversy since it began, mostly revolving around property liens and who would be paid first – the PACE financing or the home loan- if a homeowner defaults on her mortgage. The struggle culminated in Fannie Mae and Freddie Mac publishing a notice refusing to issue mortgages to homes involved in the PACE program.

Since that tumultuous time though, Fannie Mae and Freddie Mac have jumped on board the PACE train and have agreed to work with homeowners with PACE financing as long as certain criteria are met. With these roadblocks cleared, PACE has grown across the country and Florida is one of the first adopters for residential solar!

PACE financing offers some really excellent advantages to homeowners. First, there is no large upfront payment required like a cash purchase. Secondly, unlike a lease or loan that is tied to the homeowner, PACE financing is tied to the home address, so the trouble of transferring a lease or PPA agreement to a new homeowner (which can sometimes get messy), is a non-issue! The local government typically ensures low interest rates and long terms, so going solar is easy and cost-effective.

To offer PACE financing, local governments partner with organizations that provide funding and can run the program on their behalf. There are currently three PACE organizations in Florida, each working in different areas:

  • Residents in the certain cities in the counties below can secure PACE financing through The Ygrene Energy Fund and their local government. Be sure to check Ygrene’s website to see if your city is on the list!
    • Alachua County
    • Broward County
    • Charlotte County
    • Marion County
    • Miami-Dade County
    • Orange County
    • Palm Beach County
    • Pasco County
  • The Florida PACE Funding Agency, an organization originally created to facilitate PACE financing in the Kissimmee area, has grown in size and now runs PACE programs throughout Florida, including:
    • Fort Meyers area
    • Fort Lauderdale area
    • Ocala area
    • Gainesville area
    • Pensacola area
  • RenewPACE also offers PACE financing through local governments to homeowners in certain cities in the following counties.
    • Alachua County
    • Broward County
    • Charlotte County
    • Indian River County
    • Levy County County
    • Martin County County
    • Miami-Dade County
    • Orange County
    • Palm Beach County
    • Pasco County

Savings Comparison for Different Financing

We’ve compared the financial savings from the different financing options to help you decide what makes the most sense for you. Using Florida-specific industry averages for cost, we compare the savings between financing with full cash upfront and through loans.

We looked at financial savings of an average-sized 5 kilowatt installation over a 25 year period. To compare the cost of going solar to utility rates, we used the state average of $0.1139 per kilowatt-hour with an annual increase of 3.5%. We also assumed a 0.08% decrease in the production of the solar panels each year, to account for degradation of the panel components (a standard allowance, as solar panels produce a little less electricity each year they are installed).

For our financial savings calculations with a solar loan, we used 12 year term with 5% interest, a fairly standard loan agreement for solar.

First off, no matter the financing type, you can save $10,000 to $18,000 over 25 years by going solar in Florida! If you’re looking for the absolute best savings, cash upfront is the way you’ll want to go. For an average-sized installation, you can expect to save about $17,844 over 25 years!

If you don’t have enough cash to fork out for a solar installation, you can still almost $11,000 with a solar loan. Keep in mind though that when financing with a loan the total financial savings will vary by interest rates. Higher interest rates will see lower savings. At the end of the day though, even with a higher interest rate, you’ll still be realizing thousands of dollars in savings – all with no upfront payment!

Payback time is the amount of time it takes to recoup your investment. In the solar industry, a payback time of 5 to 10 years is considered excellent to very good, and 10 to 15 years is considered average. Over 15 years is quite a long time to wait to recoup your investment….

For cash purchase, payback time for Florida solar hovers around 12 years. Certainly not the best, but the longer payback is no surprise considering the real lack of any financial rebates to decrease the total cost of installations.

With a 5% loan, the payback period jumps to 18 years. That seems like a long time – and admittedly it is – but once the installation is paid off, you’ll be enjoying your renewable, no-cost electricity!

#3 Solar Policy Information

Florida has some very supportive policies for residential solar. In fact, they’re some of the best in the southeast, if not some of the best in the country! On top of all this, the state sees sunny skies perfect for producing good, clean energy. It’s no wonder SolarCity, the largest solar installer in the country, just decided to start working in the state in December 2016.

Net Metering

Florida has fantastic net metering policies that are very similar to other pro-solar states. The law, passed at the same time as the interconnection guidelines, requires investor-owned utilities to offer customers net metering incentives for residential solar installations by providing full retail credit for any excess electricity produced by the installation. Homeowners accumulate net metering credits over the course of the month and the credits roll over month to month. At the end of 12 months, homeowners can cash out their credits at the utility’s avoided cost, which is typically based on what the utility pays for the electricity they produce. This is usually only a fraction of retail cost, but, hey, cash is cash!

The best part about these net metering incentives? They’ll be around a long time, as the law makes no provision to phase out the incentives as more people install solar (a common tactic in other states). So no matter how many people install, these incentives will always be in place!

Through passing these net metering rules, the state of Florida allows you to save even more money over the life of your installation.

More: Net Metering

Interconnection Process

The state of Florida has setup some great policies to encourage homeowners to go solar in the state. These policies ensure a quick installation process as well as fantastic net metering rates. Remember though that policy is just one part of the equation. Read on to learn about solar incentives in Florida.

Interconnection is the process to connect your solar installation to the electricity grid, usually involving an application to and approval from the utility. As you can imagine with utilities involved, this is sometimes a slow and arduous process for homeowners. Utilities need to keep tabs on how much electricity is going into the grid so they can better plan for the future and ensure their infrastructure isn’t overburdened (and potentially cause blackouts). To this end, pretty much every homeowners across the country, regardless of the state they live in, must receive approval to connect to their installation to the utility grid. In some states, there is a long, long wait before your installation can get up and running – a few years ago, Maryland homeowners going solar had to wait more than 2 ½ months for approval from their utility Pepco!

Thankfully, in 2008 the state of Florida passed interconnection rules that make it easy for homeowners to apply for and receive interconnection approval. The state created a three tiered system, based on the size of the installation, with each tier having its own interconnection rules:

  • Tier 1: Solar Installations under 10 kilowatts. Unless your installation is extremely large, most homeowners fall into this category. The application process is straightforward – homeowners aren’t required to pay application fees and no study is needed to assess the impact the installation will have on the electrical grid (large scale solar installations typically require this assessment).
  • Tier 2: Installations between 10 kW and 1 MW. Homeowners installing large systems on their roof will likely fall into this tier. As a safety precaution, the state requires installations larger than 10 KW to have an external safety disconnect installed along with the rest of their installation – a requirement that can be found in other states as well.
  • Tier 3: Systems over 1 MW. These are mainly large-scale commercial installations. Most homeowners don’t have the need or space for an installation this large.

All installations must be inspected by the city or county for safety – an extremely common requirement across the country.

These tiers only apply to investor-owned utilities like FPL and Duke-Progress. The law does require municipal utilities and electric cooperatives to offer standardized net metering and interconnection, but doesn’t explicitly address how these organizations should go about this process. No matter your utility, if you’re looking to go solar in Florida, the interconnection process should be easy, simple, and relatively fast.

Solar Access Rights in Florida

Over the past 5 years, solar access rights have become an increasingly important issue across the country. More and more situations have popped up where solar homeowners have had to defend their right to go solar and even their right to sunlight.

Sound crazy? Well, imagine that you want to install solar panels on your roof, but your Homeowners Association doesn’t like the look of rooftop solar and denies approval for your installation? What recourse do you have to continue moving forward?

Imagine still yourself in a situation where you just spent $15,000 on beautiful new solar panels. The next day, your neighbor, unaware of your solar panels, plants trees that block the sunlight from hitting your panels and your energy production drops to almost nothing in an instant! What do you do? Ask her to remove the trees? What if she says no? Sue? Call the police? What if you installed your panels while the trees were just little saplings, but 10 years later they’re shading your installation and your production drops?

All of these situations have been experienced by homeowners across the country and many pro-solar states, seeing renewable energy as more important than the aesthetics of a neighborhood, have passed laws protecting solar installations as well as access to sunlight.

In 1978 (and amended a couple times since then), Florida passed a law making it illegal for HOAs to block approval of rooftop solar installations. This is great news for Florida homeowners. In other states, homeowners aren’t so lucky and HOAs can deny rooftop solar. The Florida solar law does allow HOAs to request that homeowners move panels from a visible front portion of the house to the back if, and only if, the change doesn’t affect the installations’ energy production – a fairly standard allowance in other states as well. If you’re going solar in Florida, no need to worry about your HOA. Some can be finicky or picky, but in the end they cannot block your solar installation!

Shading issues on the other hand, are a bit more nuanced. There are currently no laws in Florida protecting the ‘right to sunshine’ for solar homeowners. If your neighbor plants a tree that blocks sunlight from hitting your solar panels, even if they planted the tree after you installed your solar system, you have little legal recourse to make them trim or remove the offending trees. Florida courts typically sides with whoever is acting in accordance with state property rights, so if your neighbor isn’t doing anything illegal on his property (planting trees is legal, after all), there’s not much you can do about the shading since it’s his legal right to plant trees on his property.

Other states have solar access laws protecting the ‘right to sunshine’ for solar homeowners. After a 2008 lawsuit in northern California, state lawmakers passed regulation giving solar homeowners the power to force neighbors to cut or trim trees shading their installation if the trees were planted after the panels were installed.

The best course of action for Florida homeowners going solar is to intelligently plan were to install solar panels, taking into account the height of any nearby trees over the next 20 years. Just as important, having good relationships with neighbors allows you to find solutions peacefully and amiably if any issues arise. For more information on solar access laws, check out our article Stop Shading My Solar Panels! Solar Access Rights in the US.

Renewable Portfolio Standards

Renewable portfolio standards (RPS) are an important driving undercurrent of solar adoption and lawmakers in many states like California and New Jersey have adopted RPSs, which set a goal for how much energy in the state must come from renewable sources by a certain date. Colorado, for example, set a mandate in 2004 that 30% of all electricity generated by investor-owned utilities must come from renewable sources by 2020. Hawaii has set a goal of 100% renewable energy by 2045! RPS mandates force utilities to adopt and encourage renewable energy much faster than they would otherwise do naturally.

Unfortunately Florida has yet to adopt any RPS goals for any sort of renewable energy. It’s actual quite amazing the solar industry is so large in the state without these mandates! If they really want to push the solar industry forward, Florida needs to look into adopting mandates like so many other states have. RPSs encourage the solar industry to expand and drive forward, which can lead to lower prices for homeowners as installers become larger, more efficient, and more streamlined.

2016 Florida Solar Amendment

In late 2016, Florida residents narrowly voted down a state constitutional amendment that many (including Al Gore and Elon Musk) saw as a thinly-veiled attempt by utilities to hold onto their control over electricity in the state. Those against the bill called out both the utilities’ confusing and deceptive language while promoting the bill as well as the actual nature of the bill.

Consumer for Smart Solar Choice, the organization that promoted this Florida solar amendment, promoted it as a “pro-solar” constitutional amendment that guaranteed all homeowners’ right to go solar while also protecting non-solar residents from unfair costs.

That sounds pretty good, right? How can you argue with that? Well, you might sing a different tune when you find out that Florida Light and Power and Duke Energy (2 big utilities in the state) gave Consumers for Smart Solar $8 million and $6.7 million respectively to fund the campaign – the highest and second highest amount ever spent on a ballot initiative in Florida! Something seems a little fishy here. Let’s find out what’s going on.

The ballot actually contained two parts:

  1. A guarantee that all homeowners have the right to produce solar electricity. No real issues here. This part’s great!
  2. Here’s where it gets a little messy. Part 2 allows state and local governments to prevent non-solar homeowners from subsidizing other solar homeowners’ electricity production. What exactly does that mean? In essence, the state government (ie the Public Service Commission that makes the rules governing utilities) can allow utilities to charge solar customers additional fees to cover infrastructure costs (maintain poles and wires, for instance). This is the part that’s not so good.

If you think about it, you’ll see how deceptive this is. By voting no, you’re saying you don’t want to protect people’s right to go solar! Of course, in reality by voting no you’re actually voting to protect solar homeowners. Confusing, right? We agree.

If the amendment passed, it would’ve set the legal stage for utilities to start charging solar homeowners additional fees simply for going solar. That seems like a far cry from being “pro-solar” like the utilities touted!

Once word got out exactly what was going on, celebs like Al Gore, Elon Musk, and Jimmy Buffet came out in opposition to the bill. Even after utilities poured millions of dollars into promotion, the amendment thankfully did not receive the 60% approval that was needed to amend the constitution, thereby narrowly missing a huge blow to the solar industry (and solar homeowners) in the state!

Good job, Florida homeowners!

#4 Financial Incentives, Rebates, and Tax Credits

Florida has some excellent policies to encourage the growth of solar, including streamlined interconnection processes as well as guaranteed net metering incentives for customers of investor-owned utilities like FPL.

Unfortunately, all those great steps forward are weighed down by the state’s serious lack of financial incentives for solar. While Florida does offer a sales tax exemption and property tax exclusion for roof top solar, the state doesn’t offer any rebates themselves nor do they mandate utilities to offer them, as in other solar-friendly states like California and Oregon.

If you’re looking to go solar in Florida, you’ll have to eke out as much savings as possible, though with the 30% federal tax credit that’s not too hard.

Federal Tax Credit

All homeowners across the country who install solar are eligible for the federal residential renewable energy tax credit. This tax credit is equal to 30% of the total installation cost and goes to the owner of the installation (so if a homeowner leases the installation or finances through a power-purchase agreement, the credit goes to the installer-though they usually pass these savings on indirectly through a decrease in homeowners’ monthly bills). Originally the tax credit was supposed to phase out at the end of 2016, but lawmakers extended the credit to the end of 2019, which then decreases to 26% until 2021, and 22% until 2022.

Unlike tax deductions, tax credits are a dollar-for-dollar reduction, so in essence homeowners who purchase their installation through cash or loan enjoy a 30% discount on their installation! Homeowners apply for the credit when you fill out your next tax return.

Florida Solar Rebates (or lack thereof)

Seeing the importance of encouraging growth in solar, many states mandate that utilities, or at least investor-owned utilities (as opposed to municipal utilities or cooperatives) must offer some form of financial rebate to homeowners going solar.

For example Energy Trust of Oregon, the state-wide organization that provides rebates for renewables and energy efficiency, offers up to $0.60 per watt to residential customers of local investor-owned utilities (the organization is funded through fees on customers’ bills of local investor-owned utilities).

Through Energize Connecticut, an organization similar to Energy Trust of Oregon, Connecticut homeowners going solar can receive rebates equal to $0.40 to $0.51 per watt for going solar.

These incentives add up to a lot of savings for homeowners. Even at $0.40/watt –the lower end of the spectrum- a homeowner installing an average-sized 5 kilowatt system knocks $2000 of her total installation cost!

For all those homeowners in Florida though, you’re unfortunately not so lucky. There’s currently no state-wide solar rebate program. In fact, there’s only one solar rebate program in all of Florida! This goes to the City of Longwood, which provides rebates for a variety of efficiency and renewable energy upgrades to homeowners. Through the Raising Energy Efficiency Program, the city provides 10% of the project cost, up to $500.

That’s a fraction of the rebates in other solar-friendly states, but we still give mad props to the City of Longwood for being a shining beacon in an otherwise dark state (at least in regards to solar rebates). And as a bonus, homeowners can apply for this rebate once a year, so if you want to install efficiency upgrades after your solar (or vice-versa), go for it!

Sales Tax Exemption for Florida Solar

One thing Florida has done right in regards to solar incentives is the sales tax exemption, which allows homeowners to save hundreds of dollars at the outset of the installation.

Passed in 1997 as a three-year financial incentive, legislatures made the bill permanent in 2005. The exemption is for the hardware and equipment for the solar installation (so labor costs aren’t exempt), including the solar panels and inverter, but also the mounting hardware, electrical conduit, wiring, and even the nuts and bolts. In the future, as solar with storage becomes more common, solar batteries are also exempt from the purchase! The state publishes a list of installation components that are sales tax exempt as well as a form that homeowners can show their installer to document the exemption.

The state typically charges a 6% sales tax, so you can see big savings when you take advantage of this incentive! According to the National Renewable Energy Lab’s 2016 benchmark of costs in the solar industry, in an average-sized installation of 5.6kW the cost of the solar panels, inverter, and hardware equal about $1.25 per watt, totaling $7000. So, in this example, the sales tax exemption would save homeowners $420! (6% of $7000)

Property Tax Exclusion for Florida Solar

In the same vein as the sales tax exemption, the state also provides a property tax exclusion for 100% of the added value a solar, wind, or geothermal installation brings to the property. As an example, if your home is worth $140,000 and you install a $20,000 solar system on your roof, your property tax is still only based on $140,000, not the total $160,000 value of your property.

Compared to the sales tax exemption, this is a relatively new incentive, with the state legislature only passing the bill in 2013. The value of this tax exclusion obviously depends on the size of your installation as well as the market value of your home, but stands to save homeowners quite a bit of money.

Even with Florida’s poor record in regards to solar incentives, homeowners can still knock thousands of dollars off the initial price of the installation by taking advantage of all the federal and state tax credits, exemptions, and exclusions.

As rooftop solar costs drop, utility attempts to raise barriers may not work

A solar array at Duke Energy Florida's 3.8 megawatt solar array in Osceola County, near St. Cloud. [Times files]

A solar array at Duke Energy Florida’s 3.8 megawatt solar array in Osceola County, near St. Cloud. [Times files]

TALLAHASSEE — Florida’s utility industry steered more than $20 million of their profits into a failed constitutional amendment to impose new barriers to the expansion of rooftop solar energy generation, but developers say that as the cost of installing solar panels drops, the state could quickly become a leader in private solar energy expansion no matter what the energy giants do.

The Florida Solar Energy Industry Association estimates that over the next five years, Florida homeowners, businesses and utilities are projected to take advantage of the falling prices and install 2,315 megawatts of solar electric capacity — 19 times more than the amount of solar installed in the last five years.

“Solar prices are in free-fall, and no one knows where the bottom is,” said Chris Delp, an attorney with the Tampa law office of Shumaker, Loop & Kendrick.

Large companies, such as Elon Musk’s Solar City, are offering zero down, low-interest loans and people can also cut their expenses by deducting 30 percent of their costs under a federal Investment Tax Credit program that was extended last year, he said. “The economics are just going to make these regulatory barriers irrelevant. Florida’s utilities could work with customers to roll out solar or they could work to rule it out.”

What approach will Florida’s investor-owned utilities take?

Will they encourage homeowners and businesses to install their own solar systems — as utilities in Georgia, California, New York and dozens of others states have done — or will they ask regulators to stifle rooftop solar expansion, as they attempted to do with Amendment 1, so that they can control the development of solar themselves and limit the hit to their bottom line?

According to the Florida Public Service Commission 10-year site plan, utilities plan to increase their solar generation, but solar will make up only a tiny fraction of all energy generation supplied by the regulated utilities in the next 10 years. Gulf Power has announced it will add up to 500 megawatts of solar power to its fleet by 2024 and Florida Power & Light has asked the PSC for permission to add 1,200 megawatts over the next four years as a part of a settlement agreement to raise its electric rates.

Florida ranks third in the nation for rooftop solar potential, according to SEIA, but is only 14th for cumulative solar capacity installed. That could change, Delp said, if the emerging interest in solar installation in Florida, fueled by the drops in prices, results in more people installing their own electricity generation, circumventing utilities.

“I don’t think this was their intent, but what the utilities did with Amendment 1 was bring the discussion of solar energy development in Florida to the forefront,” said Delp, who is working with a company building a 30-megawatt private solar farm in Leesburg. “It’s now a kitchen table issue. There is awareness that there is a lack of solar in Florida and that we lag behind so many other states.”

In the last year, the price of installing a solar photovoltaic system has dropped by at least 12 percent and prices are down 66 percent from 2010, according to the independent Energy Information Institute. Experts say that as the price of solar installation continues to plummet, the cost of installing it will drop no matter what the utilities attempt to do — unless they erect new barriers.

Amendment 1 was an attempt to do that by creating legal language intended to force regulators to change the so-called net metering law. Under that law, every Florida electric utility is required to provide customers that have installed solar panels the opportunity to sell their excess energy back to the utility through an interconnection agreement and net metering program. The program was intended to make it easier and more affordable for customers to invest in clean renewable energy generation and lower their utility bills. Utilities now are required to pay customers at the net retail rate.

Florida’s two largest utilities, Florida Power & Light and Duke Energy Florida, have said it is time to change the net metering laws as utilities have done in other states and they have already begun asking Florida’s PSC to address it. The changes include imposing a monthly service charge on people with solar systems or reducing the net metering rate to reflect the industry’s claim that solar users subsidize other ratepayers.

But solar advocates counter that the subsidy argument is based on economic studies that do not take into consideration any of the environmental or efficiency benefits from solar installation. When those are calculated, they say, private solar installation produces cost savings for non-solar users.

In Nevada last year, the state’s utility regulators changed their net metering law to split solar customers off into a separate rate class and lower the reimbursement rate for excess energy from 11 cents per kilowatt hour to 2.6 cents per kwh. After the change, applications for rooftop solar installations saw a steep drop, several solar installers like SolarCity left the market and protesters rallied outside the Public Utilities Commission headquarters in Las Vegas. Regulators initially also refused to grandfather in existing solar systems but, after public push back, they reversed it.

“You make rooftop solar power financially unattractive in one of two ways,” said Jeff Prutsman, CEO of American Solar Energy Systems, a solar installation company with three offices in Florida. “You either get rid of net metering or you add surcharges to the electric bills of consumers who own rooftop solar power systems. Either way, you increase the number of years that it takes for a rooftop solar power system to pay for itself with utility electric bill savings.”

Susan Glickman, Florida director of the Southern Alliance for Clean Energy which was one of the most outspoken opponents to Amendment 1, said the top priority of her organization is for regulators to “remove market barriers and allow the solar market to develop,” rather than impose new barriers to entry.

Her group has not decided whether to continue to pursue a constitutional amendment promoted by the solar industry’s political committee, Floridians for Solar Choice, which would have allowed homeowners to lease their solar system to companies that could sell solar energy produced to neighboring properties.

“Because costs have come down, we have not decided if that is still a top priority but it is still an option,” she said.

She noted that in addition to rejecting the utility-backed Amendment 1, voters in August overwhelmingly approved Amendment 4, which extends a residential renewable-energy tax break to commercial and industrial properties. “Voters have spoken very loudly,” she said. “It’s now up to the Legislature to implement it.”

Meanwhile, as the cost of solar installation falls, Duke Energy Florida is seeing more than 100 residential and business customers a month install solar panels, said Suzanne Barr Grant, Duke Energy spokesperson. There are now more than 3,800 business and individual customers that have installed solar power, a 400 percent increase in the last five years, she said.

Key to the utility’s approach is how solar expansion is framed and defined, said Delp. “There has not been in Florida, like there has been in other states, a finding of fact of what the real costs of solar are and what is considered a subsidy.”

Duke Energy and Florida Power & Light adopt language used by utilities in dozens of other states. Instead of rooftop solar, they call it “private” or “customer-owned” solar and instead of utility-controlled solar, they prefer to call it “universal solar.”

Both companies say they want the net metering laws changed.

“The current net metering policy needs to be updated,” said Grant, the Duke spokesperson, in an email. “As more customers net meter, we believe it will become increasingly important to appropriately value solar and grid resources so that customers who net meter are also paying their share for the electric grid services they receive while being appropriately compensated for the generation they produce.”

Rob Gould, FPL spokesman, said his company believes that the net metering reimbursement rate needs to be lowered because it was designed to encourage customers to install solar when the cost for solar panels was higher. He also repeats the argument made by utility companies in other states that customers who install solar and rely on net metering reimbursement receive a “subsidy” from those who don’t.

“As solar declines in cost and more customers choose to install, some argue that net metering can become an unfair, regressive subsidy because the bulk of the benefit goes to individuals and businesses that have the ability to install solar at the expense of low-income families, renters, schools, small businesses and all other utility customers who cannot choose private solar for themselves,” Gould said in an email.

Glickman warned, however, that “the current market is working.” She notes that several large retailers in Florida such as Ace Hardware, Whole Foods and IKEA have installed corporate photovoltaic systems in the state and new barriers will delay, not expand, solar in Florida.

Regulators should instead look to ways to encourage communities to develop solar cooperatives, community solar projects and other approaches that have proliferated in other states, she said.

Empowered by the broad-based group of solar energy supporters who defeated the utility-backed amendment, Glickman also believes that voters won’t be happy with any delay in solar progress.

“If utilities try to do an end run on net metering through the Legislature or the PSC, we will fight that,” she warned, referring to the Public Service Commission. “We don’t believe the PSC needs to take any action now.”

Contact Mary Ellen Klas at meklas@tampabay.com. Follow @MaryEllenKlas.

As rooftop solar costs drop, utility attempts to raise barriers may not work 11/13/16 [Last modified: Sunday, November 13, 2016 11:24am]

PV Canopy for a Bocce Court

Tom and Carol Godwin had solar energy in the back of their minds when they designed and built their house in 2010, but didn’t bring solar expertise onto their team until I entered the picture several years later. I found small, south-facing roof areas that were shaded by each other and nearby trees. Using the Solar Pathfinder, I identified the best site on their small, narrow property—at one end of their bocce court. A PV canopy over the court was a good fit. The couple installed a whole-house 12 kW generator when the house was built. With backup power already in place, a batteryless PV system seemed like an appropriate choice.

Tom is an investment planner, and PV made sense to him for stabilizing his electricity costs during retirement. He also wants to leave the planet in better shape for his great-great grandchildren. Mild peer pressure from close neighbors and friends, who have been using solar electricity for many years, was also a factor in the decision.

Building a freestanding structure added significant expense, but the Godwins ended up with more than twice the system the small roofs could have accommodated—plus better performance. Dana Brandt of Ecotech Solar designed the PV system, and his crew installed it in one eight-hour day. “I love that the structure not only supports the array but provides shade for the court. It feels like such a waste to build a ground-mount structure that does nothing but support the array,” says Dana. “Any time a ground-mount system can serve an additional purpose, such as a carport, covered storage, or shaded area, feels like a win to me.”

Architect Chris Keyser (who also designed Tom and Carol’s house) designed and engineered the post-and-beam structure to support the array and complement the house. Bill Chagnon of Crater Lake Building and his crew constructed the structure, using pre-made galvanized steel brackets and stainless lag bolts to tie the 6-by-10 rafters to the 6-by-8 posts. Set on top were 4-by-10 purlin timbers. Made from pressure-treated wood, the structure is expected to outlast the 25-year module warranty, giving the homeowners reliable electricity for decades.

The 5.7 kW array uses 20 SolarWorld 285 W modules on Unirac SolarMount racks, and a Sunny Boy 5 kW inverter. The inverter has SMA’s “Secure Power Supply” sunny-day backup capability. A subpanel and outlet was installed at the power center behind the bocce court, allowing some electricity use courtside.

The couple is pleased with the system’s production. Tom checks the meters daily, and reports seeing modest production even on cloudy days. This spring, the system produced up to 40 kWh per day. The system’s generation is zeroing out the couple’s 11 kWh per day average usage, and, since the system’s commissioning in April, a megawatt-hour of clean solar electricity has been made. When the system will be running net-positive, Tom may trade in his hybrid vehicle for a pure electric model.

Apple’s Government-Approved Solar Plans

Most people know Apple as a company that develops smartphones, computers and tablets, but recently the famous fruit dipped its toes into another market: energy. The U.S. government has granted Apple approval to sell the company’s excess solar energy under the name Apple Energy LLC.

If Apple becoming an energy “provider,” in addition to consumer, doesn’t serve as a proof point of the massive change happening in the utility industry today, not much else will. This move not only means Apple can now offload its surplus and make some extra cash; it also signals mounting pressure for traditional utilities to innovate, or else risk seeing customers turn elsewhere for energy services. Commercial customers make up over half the overall load and revenue at a typical utility — in smaller numbers and greater concentration than residential customers — and increasingly are taking matters into their own hands to meet their energy needs.

Historically, utilities were seen as basic energy providers — expected to provide reliable electricity and gas service to homes and businesses, as long as customers paid their bills. Today, however, with the growth of renewables and increased competition, that paradigm has shifted. Now customers have more options and expect their utilities to help them navigate that through personalized engagement.

Apple’s recent approval to start selling
solar power is a nod toward the future of the market. In a recent survey by PriceWaterhouseCoopers, 72 percent of U.S. companies indicated that they are actively pursuing procurement of clean energy. In other words, a vast swath of corporate America is reconsidering its energy supply. Companies like Apple are taking it one step further, becoming suppliers themselves. New energy providers are establishing themselves every day, competition is increasing, and utilities face growing pressure to respond.

The story of Apple holds a two-part lesson for utilities. The first is in regards to retaining commercial customers. The second is about out-competing present and future entrants to the market.

The good news for utilities, for now, is that they are still the default energy provider across most of the U.S., and they still hold customer relationships with the most energy consumers. This status means they have a lot to build on — and a lot to lose. If more commercial customers act like Apple, coming up with their own solutions to energy needs, soon utility customer numbers and revenues will look like a shadow of their former selves. Negative load growth causes all kinds of financial problems for utilities and their shareholders and big problems could arise.

A key to commercial customer retention is to recognize customer motivators, which may include corporate sustainability, strategic energy management, or simply low levels of satisfaction. Because of their incumbent customer base, utilities maintain many years worth of meter data that, when analyzed correctly, has the power to illustrate those motivators, building-by-building. By using data, utilities are able to assemble a composite picture of every customer at a granular level and better engage them with personalized information. Armed with customer intelligence, utilities know which customers will benefit from retrofits and can pinpoint how much energy they will save by implementing them. Utilities can also identify small operational changes for customers, advising them on how to adjust operations to save on energy costs.

This intelligence also sheds light on some more complex questions: Which of my customers are investing in rooftop solar? Which customers could benefit the most from battery storage? How can I leverage new commercial rate structures to please my customers and reduce distribution costs?

Which brings us to the second part of the Apple lesson. For now, Apple can only sell electricity on the wholesale market. But what if they were to launch a retail energy business — how would the company approach that market opportunity? They would win the way they’ve won in many other businesses — by innovating through understanding how their customers can use their products. In personal electronics, this innovation means designing devices like the iPhone that people love to hold and can’t live without. In energy, the innovation would mean understanding customer energy use in a granular way and evolving quickly to anticipate where consumer expectations are headed.

While data itself might seem like a small piece of the puzzle, it is in reality the most important asset for utilities to stay in the game. Intelligence gives utilities the opportunity to retain customers using highly personalized care and service, and to leverage deep information to design and sell new revenue alternatives suited to their customer base. New entrants who don’t have the data yet won’t have such capabilities. Apple uses data to out-compete present and future competition. Utilities should too.

The energy market is going through a massive transformation and most are unsure how it will shake out. Knowledge is power, and for utilities it’s a competitive advantage.

August 22, 2016
By Indran Ratnathicam
Vice President, Marketing & Strategy, FirstFuel