Mike Antheil, President, Florida Solar Energy Industries Association
Florida ranks third in the nation for rooftop solar potential, but all the way down at 12th in terms of cumulative solar capacity installed, according to the U.S. Solar Energy Industries Association (SEIA). Fortunately, several recent developments are shaping up to help Florida achieve its true potential.
In 2016, Floridians delivered a major win for the state’s solar industry when they rejected a misleading amendment that would have led to the destruction of the state’s most effective solar policy – net metering. With net metering, homeowners and businesses can deliver their excess electricity to the grid and receive a retail credit for the amount of electricity they produce. This retail credit is
capped out once the excess production equals the amount or electricity consumed by the homeowner or business in a given month. If the excess electricity exceeds consumption, the credit drops to a wholesale rate. A retail rate for distributed power generation through the current net metering program is fair to all users, and ultimately saves money for the utility company and ratepayers.
The following year, Florida lawmakers approved a measure that exempts residential and commercial solar projects from both tangible personal property tax and ad valorem real estate taxes. This, combined with the Florida Public Service Commission’s (PSC) unanimous decision earlier this year to lift a ban that prevented households from leasing solar systems, means that Florida homeowners and businesses who decide to go solar can enjoy an added incentive – beyond the existing federal tax credit that is set to expire for residential systems in 2021.
Taken together, these shifts are accelerating the deployment of solar power in Florida – and helping our state make up for lost time. In fact, SEIA announced earlier this year that for the first time ever, Florida joined the ranks of the top five state markets for solar installations in the first quarter of 2018.
Florida consumers now have several options when it comes to getting solar. Although Power Purchase Agreements (PPAs) are still outlawed in Florida, the PSC’s vote from earlier this year means that companies are now able to offer solar leases in our state. Essentially you can lease solar equipment, you just can’t sell electricity. Another option for homeowners who may not want or be able to pay the full cost of a system up front is PACE (Property Assessed Clean Energy) financing.
Many Florida roofers are familiar with PACE, a unique financing option that empowers homeowners to make energy-efficiency upgrades as well as improvements that can protect a home against hurricane damage. Homeowners who use PACE pay nothing up front; the financing is paid back over time at a competitive, fixed rate through an additional, voluntary line on a homeowner’s property taxes.
In California, the nation’s largest PACE market, PACE has played an important supporting role in the growth of solar. Earlier this year,
researchers at Lawrence Berkeley National Laboratory (LBNL) released a federally funded study showing that PACE financing has been a “uniquely successful” driver of residential solar-power deployment in California. The LBNL analysis indicated that thousands of California homeowners would not have installed rooftop solar systems between 2010 and 2015 had PACE not been available in their communities.
Florida is taking steps in the right direction to grow the share of solar in the state’s power mix, but we still have a long way to go to catch up with the solar behemoths such as California and New Jersey (that’s right – New Jersey!). New Jersey gets a whopping 3.9 percent of their total energy from solar, compared to a paltry 0.65 percent in Florida, and California leads the way with almost 17 percent. There are many ways to get where we need to go, but several challenges remain.
One essential step is to protect net metering at all costs. The state’s Investor-owned utilities, such as FPL, Duke, TECO and Gulf Power, who account for 75 percent of our state’s consumers, are obligated to have a net metering program by the Florida PSC. However, the municipal utilities are not regulated by the PSC and can take it upon themselves to decide how to handle net metering. Unfortunately, JEA, the state’s largest municipal utility, has decided to gut their net metering program, effectively neutering the rapid growth of solar in Jacksonville. JEA cited cross-subsidizations concerns. According to a recent amalgamation of studies by the Brookings Institute, cross-subsidization may become a legitimate concern around 20 percent market penetration, not the current market penetration of about one-tenth of 1 percent. Nevertheless, JEA took an unprecedented action to eliminate net metering. It is essential that this policy does not spread to other municipal utilities or to the IOUs.
Two more simple but extremely important barriers that will need to be overcome are insurance requirements and local permitting processes. FlaSEIA will be working with local building departments to streamline and simplify solar permitted processes, which can vary significantly in time, cost, and requirements between each of the 67 counties in Florida. Insurance requirements are a tall order without an immediate solution. Given the safety of modern inverter systems, this requirement is redundant and outdated, and can greatly reduce the ROI of solar systems. For example, a tier 2 solar system will be required to have $1 million in liability insurance.
So, as we can see, there is a ton of good things happening in solar, and a few hurdles that are left to be overcome. The good news is the market is growing every single day and the demand for solar has grown significantly in the past few years. We encourage you to get involved and learn about how you can make positive changes for the solar market in Florida in 2019 and beyond.
Mike Antheil is the President of the Florida Solar Energy Industries Association (FlaSEIA) and the Senior Director of Market Development and External Affairs at Renovate America, the country’s largest provider of PACE financing.
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