Lora Novak, Senior Editor, Today’s Homeowner
Florida’s nickname is the Sunshine State and it’s not surprising that it’s one of the country’s most popular states for solar power, according to the Solar Energy Industries Association (SEIA). Florida has a generous number of solar incentives for homeowners who convert to solar power.
While the cost of solar equipment on a per-watt basis in Florida is well below the national average, solar arrays in the state must be bigger and that drives the up-front cost to about $6,000 more than what most Americans pay. Florida’s incentives reel in that cost and increase long-term savings with solar power.
I’ve spent years researching and writing about solar incentives in different states and in this article, I’ll discuss all of the solar incentives in Florida and how you can claim each one to bring down your installation costs.
Florida is a solar-friendly state and has more solar incentives than most states and it needs them. The average solar system in Florida is about 2.5 kilowatts (kW) larger than the national average, which equates to a total installation cost of about $29,095, much higher than the national average of $23,940.
Taking advantage of Florida’s solar incentives is necessary for keeping your solar array within budget. The table on the next page includes a quick breakdown of all of the solar incentives in Florida and estimated savings you can expect from each one. I’ll explain these in greater depth in the following sections.
My Take: The federal tax credit is the single most crucial solar incentive in Florida. It’s easy to apply for and
can save you thousands of dollars. The federal government offers a 30 percent federal tax credit on your entire system’s installation cost. The overall cost includes panels, inverters, wiring, conduit, solar battery storage and labor. In Florida, the average credit value is $8,729, much higher than in most states.
It’s important to note that this incentive is not a rebate, so those savings aren’t guaranteed. Rather, this is a tax credit. That means your tax burden for the year in which you install your system gets reduced by 30 percent of your full installation cost. You won’t see any benefit from this credit if you don’t owe money on your income taxes.
However, you don’t have to take the credit all at once. You can roll over any unused credit to future tax years for up to five years. Ultimately, if you expect to owe around $1,750 or more per year for the next five years in income taxes, you should be able to take the entire credit.
The Energy Policy Act, signed in 2005 during the Bush administration, established the federal tax credit. The original credit was 30 percent but the rate scaled back over time and was ready to expire in 2024.
The Inflation Reduction Act (IRA), passed in 2022, revived the tax credit, extended its expiration date, increased the rate back to 30 percent and set a new rate schedule. It is:
■ 30 percent for all systems installed prior to 2032
■ 26 percent for systems installed in 2033
■ 22 percent for systems installed in 2034
Without renewal, the credit discontinues in 2035.
The best part about the federal tax credit is how easy it is to apply for it. Most of the time, your installer or accountant fills out the necessary paperwork. If you need to fill it out yourself, though, you can follow these steps:
1.Go to the IRS website and print out IRS form 5695.
2. Fill out the form. You’ll need contact information for your certified installer and some information from the system’s paperwork, including the size of the system, projected output and the address where the system is running.
3. Give the form to your accountant or file it with your tax return (if you file your own taxes).
The federal solar tax credit provides the most benefit overall, but there are also some state solar incentives in Florida that you should consider. The statewide incentives aren’t quite as appealing as in other states but they can still save you a lot of money. More importantly, they help you avoid some potential downsides of going solar.
■ Sales tax exemption
■ Property tax exemption
■ PACE financing
■ SELF financing program
My Take: Sales tax exemptions are common incentives, but I love them because they save you money up front with no extra work required.
Florida’s solar and CHP sales tax exemptions waive all sales tax on solar equipment, including panels, inverters, wiring, racking systems, conduit and solar batteries. The savings you’ll see from this tax exemption will vary based on where you live but with
an average sales tax of 7.02 percent in Florida, the typical savings will be $2,042, given the average solar array cost in the state.
The sales tax exemption is especially great for two reasons. First, unlike a rebate or tax exemption, it provides those savings up front. Second, you don’t have to do anything to apply for it. All solar equipment doesn’t get taxed. When you purchase panels, you’ll automatically see those savings reflected in your pricing.
Florida initiated the solar sales tax exemption in 1997 and set an expiration date of 2002. But it extended the exemption for three years, through 2005, when it made the exemption permanent.
My Take: Property tax exemptions for solar are also common throughout the U.S. but that doesn’t mean they’re not worthwhile. I love to see states offering this because it requires no work to file for it and it can save thousands over the life of your panels.
The property tax abatement for solar equipment in Florida prevents your property taxes from increasing after solar installation. Normally, any significant home improvement that bumps your home’s value would also cause your taxes to go up. Because a solar conversion should add considerable value to your home, it would typically lead to higher property taxes.
Thankfully, the property tax exemption prevents this from happening, eliminating one of the only major downsides to converting to clean energy.
It’s tough to pin down what this perk will save you over time because different municipalities use varying tax rates and your solar array will gradually decline in value. If we take the average system cost and tax rate and assume it retains its value for at least 25 years, you’re looking at tax savings of around $232 per year. Over 25 years, that equates to savings of $5,800.
The property tax abatement in Florida was initially offered in 2013, much later than most other states adopted similar legislation. The exemption expires at the end of 2037.
Much like the sales tax exemption, the property tax abatement is automatic and doesn’t require any work on your part to take advantage of. When your tax assessor calculates your property taxes, they will simply ignore any value added by your solar array. The lack of application and application fees for this perk makes it even more valuable, in my opinion.
My Take: The SELF financing program is a great way for the state to provide accessible financing to solar customers. It keeps interest rates and loan terms low to help make funding solar more affordable.
Florida’s Solar and Energy Loan Fund is funded by a small charge on each resident’s electric bill. The fund provides affordable loans for prospective solar customers. It caps the interest rate for the loans between 8 and 9.5 percent and it mandates that the loan term be between five and ten years.
Solar is expensive no matter where you live but going solar is about 25 percent more expensive in Florida than in most other states. Most Floridians turn to financing. Still, private solar loans have higher interest rates and longer loan terms, which increases the cost of financing and the final price you pay for your Florida solar panel system.
This fund is a great way for Florida to provide accessible and affordable financing for up to $50,000 per renewable energy project, which should be more than enough to cover the cost of solar panels in the area.
Florida created the Solar and Energy Loan Fund in 2011 after a federal grant kickstarted the program in St. Lucie County the year before. It has been available ever since with no changes to the terms. It has no expiration date but could end if funds run out or if the state discontinues electric bill charges that keep the fund alive.
Applying for a loan through the SELF program is pretty simple and you can get started before you pull the trigger on your solar array. Here’s how to claim the credit:
1. Go to the SELF program website: https://solarenergyloanfund.org/.
2. Click on “Apply Now.”
3. Put your information in, including proof of income, state-issued identification information and a quote from your solar panel installation company.
4. A program administrator will review your information and let you know if anything else is required.
My Take: PACE financing makes solar more accessible to low-income households. The program has some downsides, though, so I’d recommend securing financing elsewhere unless you have no other options.
Property-assessed clean energy (PACE) financing is a common solar incentive program nationwide. It lets you install solar for no money down, making the upfront costs universally affordable and then adds the monthly payment for your system to your property’s tax bill.
In most cases, your program administrator will set up the interest rate and loan term so that your total monthly payment will be lower, with your system reducing or eliminating your energy bill. PACE financing is only available for low-income residents, as defined by individual municipalities that support the program.
There are a few downsides to this program. First, your monthly payments get added to your tax bill, which means selling your home might be difficult if the buyer doesn’t want to assume those payments or if their lender doesn’t want to lend with the lien on your property. Second, if you can’t make payments on time, you could lose your home. A personal loan might be more difficult to secure, but your home isn’t used as collateral for the loan like it is with PACE financing.
Florida closed its first loans through the PACE financing program in 2011. Since then, several municipalities have come on board and approved local PACE programs. There is currently no scheduled end date for the program.
I recommend finding an alternative loan program to PACE financing, if possible, but PACE financing is usually still better than a solar lease. A lease will often still complicate the sale of your home and it will save you far less over time and you’ll never own your system.
Filing for the PACE program is usually quite time-consuming and involves verifying a lot of information. You can follow these steps below to apply:
1. Navigate to the PACE program page for your municipality.
2. Apply.
3. Fill in the required information, which usually includes contact information, personal identification and an income statement.
4. A PACE program administrator will call or email to discuss next steps or let you know about additional information they need.
5. The administrator will then direct you to a list of certified solar installers to choose from and they should walk you through the rest of the process.
There aren’t any tax exemptions or grant programs offered at the local level in Florida. But a handful of rebates, permitting laws and local financing programs make going solar in certain municipalities slightly more affordable and more accessible. Here is a breakdown of the more appealing local solar incentives in Florida:
■ Orlando Utilities Commission (OUC) Solar Thermal Rebate Program: Provides a rebate of up to $900 for each solar array installed within Orlando. Eligibility depends on your contractor, location and system costs.
■ Boynton Beach Energy Edge Rebate Program: Provides a solar rebate of up to $1,500 per solar array and solar storage system for residents of Boynton Beach.
■ Miami-Dade County Solar System Permitting: This perk provides information about how the solar permitting process works in the county. It allows for expedited permits and reduces the permit cost.
■ City of Tallahassee Utilities Solar Loans: This is a low-interest solar loan program with interest rates capped at a competitive five percent to reduce ongoing costs of solar conversion. You can finance up to $20,000 for up to 10 years.
■ Lakeland Electric Residential Energy Efficiency Loan Program: Homeowners serviced by Lakeland Electric can finance up to $5,000 at 0 percent interest. The minimum loan amount is $500.
■ City of Lauderhill Revolving Loan Program: Residents in Lauderhill can borrow up to $2,500 through this program to put toward their rooftop solar system. It’s a short-term loan for up to two years, but the interest rate is set at 0% to bring down your financing costs.
■ Broward County Online Solar Permitting: This is another permitting ordinance that allows you to expedite solar permitting and pay a lower flat rate for your permit for upfront savings.
I believe net metering is one of the most beneficial solar incentives in the entire solar industry because it helps offset and even eliminate utility bills using your solar array.
Florida net metering works by monitoring your grid consumption, how much electricity you pull from the grid and your energy exportation, how much excess energy your panels produce and send to the electric grid.
Without net metering, you’d have to pay the retail rate per kilowatt-hour (kWh) for any energy you pulled from the grid, like at night or on cloudy days when your production drops. With net metering, you earn credits for each excess kWh you export to the grid and can then use those credits when your production dips to offset your consumption.
Florida has one of the best net metering programs in the country. The Public Utilities Commission (PUC) mandates all excess energy be credited at the full retail rate, meaning every kWh you export can offset a full kWh of imported energy and any unused credits at the end of the year gets paid back to you.
The payout rate is the avoided-cost rate, below the retail rate, but this is still beneficial. The exact rate will depend on your utility company and the policy applies to customers of all investor-owned utilities, including Duke Energy, Florida Power & Light (FPL), Tampa Electric Company (TEC) and Gulf Power. Electric cooperatives aren’t required to offer the program but some have eligibility.
Provided you install an appropriately sized solar array, Florida’s net metering policy means you can often eliminate your electric bills and even turn a profit if you over-produce enough.
It’s hard to estimate how much net metering can save you over the lifetime of your panels because there are many factors to consider, like your local electricity prices, the size of your system, your monthly consumption and more. However, net metering helps the average solar customer in Florida pay off their solar power system in just 12 years and then save an additional $21,632, on average, after that point. Your system may save significantly more, even enough to cover other utility bills.
Some of the best solar companies in Florida will enroll you in net metering automatically, so it often doesn’t require any work on your part. Here are the steps to enroll if you must do the work yourself:
1. Head to your electric company’s website and search for an interconnection application.
2. Fill out the application. Gather information about your system size, the equipment you’re installing, expected output and contact information for your solar company.
3. Apply to the electric company.
4. Proceed with your solar installation.
5. Finally, an inspector from the utility company must check your system’s connection before approving your net metering setup.
Given the prevalence of solar installations in Florida, it’s not surprising to uncover solar scams. Since incentives are highly beneficial for solar customers, some less reputable companies use them as a means of bilking Florida residents of their solar financial benefits.
First up is a misrepresentation of how the federal tax credit works. I’ve seen a lot of companies in Florida, including Solar Energy Today, either misinterpreting this perk or outrightly misleading customers by providing false information.
In most cases, the solar representative will tell customers that this is a solar rebate and that the savings are guaranteed. Remember that this is a tax credit and unless you owe more than the credit amount in income taxes over the next five years, you won’t be able to take the full incentive.
I’ve also heard about scammers lying about solar rebates or incentives that don’t exist. Often, they say there’s a small application fee and once you pay it they stop responding and never provide any incentive. You can always refer back to this article for guidance about available perks. Also, conduct your own research before signing anything.
Misleading marketing and high-pressure sales tactics are other issues to look out for. Scam companies sometimes misrepresent your solar savings and installation costs to get you to sign. Some will pitch solar leases or power purchase agreements (PPAs) as being superior options to paying in cash or with a loan, but those payment options are objectively less beneficial to the large majority of customers.
One solar company, Vivint, found trouble and faced class action lawsuits for this last point a few years ago and other companies have done similar things and faced legal action.
Photovoltaic (PV) equipment in Florida is less expensive on a per-watt basis than in most states. But solar energy systems are more costly because of the system size required to offset energy consumption in many areas. Thankfully, the solar incentives available make going solar more accessible and beneficial. With federal, state and local incentives, you can reduce
your up-front installation costs, push up your long-term savings and secure affordable financing for your renewable energy system.
Now you’re ready to take advantage of the Florida solar incentives I’ve mentioned and find certified installers who can help you maximize your savings from solar incentives.
Lora Novak, Senior Editor, meticulously proofreads and edits all commercial content for Today’s Homeowner to guarantee that it contains the most up-to-date information. Lora brings over 12 years of writing, editing and digital marketing expertise. She’s worked on thousands of articles related to heating, air conditioning, ventilation, roofing, plumbing, lawn/garden, pest control, insurance and other general homeownership topics. If you can think of it, Lora’s probably written on or edited it. She also enjoys using her adventures as a homeowner to make TodaysHomeowner.com’s articles even better. She graduated from Widener University in 2008 and holds a Bachelor of Arts in English and Creative Writing. This story was originally published on Today’s Homeowner: https://todayshomeowner.com/solar/guides/florida-solar-incentives/.
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