The Sunshine State offers decent solar savings… for now.
Florida is one of the more popular states to have rooftop solar installed. Under their current policy, net metering is offered to the customers of their four investor-owned utilities. Net metering policies are one of the best incentives for having solar power – having the potential to save homeowners good money.
However, access to net metering has been jeopardized in Florida in the past, and there could be attempts from legislators to dismantle the policy for Floridians in the future. Thus, the best time to go solar in Florida is sooner rather than later.
Read on to learn everything you need to know about net metering in Florida.
Florida net metering at a glance
- Net metering allows solar owners to earn credits for excess energy that they send to the grid that offsets their grid usage when their panels aren’t generating power.
- Florida’s net metering program covers all customers of investor-owned utilities. Several municipal and rural co-op utilities offer it, as well.
- House Bill 741 was the utility companies’ latest attempt to kill net metering. It passed the legislature but was vetoed by Governor DeSantis on April 27th, 2022. The bill would have taken away the financial benefits of solar for Floridians and allowed utilities to impose extra new fees on solar owners.
- There will certainly be another attempt to dismantle net metering in Florida, so homeowners who are interested in solar panels should consider their options now before any changes are made.
How net metering works in Florida
Florida’s current net metering rules were enacted in 2008 by the Florida Public Service Commission (PSC). These rules provide a fairly good version of net metering, but there are some important things to know.
First, the state’s net metering law only applies to Investor Owned Utilities (IOUs). Customers of these four companies are covered:
- Florida Power & Light (FPL)
- Duke Energy Florida
- Tampa Electric Company (TECO)
- Florida Public Utilities Corporation
The IOUs cover about 79% of Floridians. The remainder are covered by municipal electric companies or rural electric co-ops, and some of these have enacted their own form of net metering (details below).
Credit rollover policy
In Florida, homeowners cannot get credit for more electricity than they used from the grid in a given month, but extra credit does roll over to the next month’s bill at the full retail rate.
At the end of each calendar year, any leftover credits are paid to the solar owner at a lower rate based on the utility’s wholesale energy cost—generally around 3 to 4 cents per kilowatt-hour.
Insurance requirements
Florida’s interconnection guidelines—which govern how solar systems can be hooked into the grid—separate solar systems into different “tiers” based on size in kilowatts (kW):
- Tier 1 systems are those sized 10 kW or less
- Tier 2 systems are those between 10 kW and 100 kW
- Tier 3 systems are sized above 100 kW (far larger than nearly all home systems)
Florida offers streamlined permitting and inspection for Tier 1 systems, has no insurance requirement, and charges no application fee for connecting them to the electric grid. Tier 2 systems are subject to an additional application fee (depending on the utility) and also come with the requirement that the homeowner purchase up to $1,000.000 in liability insurance.
These fees and insurance requirements do make larger systems somewhat more expensive in Florida, but they do not make an investment in solar much less economical.
Community solar and virtual net metering
Community solar is a newer concept that helps people who can’t install solar panels (whether due to an imperfect roof or if they’re renters) get some of the savings benefits that come with solar.
Rather than being installed on a home, a community solar installation is a subscription-based large-scale solar system that allows individuals to receive a portion of the energy output from the system that’s roughly equal to their annual usage. The subscription offsets their energy bill, and usually costs a little bit less than they would have paid without solar.
Unfortunately, there is nothing in Florida law that allows for a community solar program. However, some of the state’s IOUs have developed their own programs that are sort of like community solar.
Here’s a quick rundown:
- Duke Energy Florida offers two programs called “Shared Solar” and “Clean Energy Connection”. The former costs much more than a standard electric bill, but the latter should provide a small amount of savings over time.
- FPL offers the SolarTogether program, which it estimates will result in savings over time. Unfortunately, the program is currently fully subscribed.
- TECO offers a program called “Sun Select” that offers solar energy offsets for its customers. The program currently costs more than standard electricity, but locks in the fuel charge at current rates, which may result in a small amount of savings in the future.
Without a good community solar law to require the utility companies in Florida to offer actual savings to their customers, the IOUs will continue to expand upon their hundreds of megawatts of solar farms and charge whatever they can get the PSC to allow for the energy.
Net metering with Florida municipal and co-op utilities
In addition to the four IOUs, some of the biggest municipal and rural co-op utilities offer something similar to a net metering program. Here’s a quick rundown of what’s available:
- Jacksonville Electric Authority offers a “distributed generation program” that pays the fuel rate for all excess generation. For those who want to store excess electricity, JEA offers a battery rebate program
- Orlando Utilities Commission offers full-retail rate net metering
- Lee County Electric Cooperative offers full-retail rate net metering, but resolves excess credit at the end of the year by paying the “as-available” (wholesale) rate
- Withlacoochee River Electric Cooperative offers full-retail rate net metering, but resolves excess credit at the end of the year by paying the avoided cost (wholesale) rate
- Sumter Electric Cooperative credits all excess generation to the customer’s bill at the wholesale rate
- Clay Electric Cooperative offers full-retail rate net metering with indefinite carryover of credits. Under special circumstances, a customer can elect to have credits older than 24 months paid out to them
We can’t run through the programs (or lack thereof) from all 57 Florida utilities, but the ten listed in the sections above cover roughly 95% of Florida’s population. If you’re interested in whether your municipal or rural electric utility offers a plan like this, the best bet is to call them and ask, or request solar quotes from companies in your area, who are experts at dealing with the local utilities.
Is net metering in Florida going away?
The short answer to the question posed in this heading is “not yet”. There was a threat to net metering in Florida from a bill that passed through both houses of the Florida legislature, but was vetoed by Governor DeSantis on April 27th, 2022.
Despite the fact that customer-sited solar installations account for just 0.16% of all electricity sold in the state (as of 2020), lawmakers in Tallahassee decided it was time to dismantle the state’s net metering program. In November 2021, Senator Jennifer Bradley introduced SB 1024 (later joined by its companion HB 741 in the House), which would have directed the PSC to write new rules for how solar owners are compensated by the state’s utility companies for excess solar energy.
In the final version of the bill that was sent to the governor’s desk, homeowners whose solar installations would have been placed into service after December 31, 2023, would no longer receive net metering credits.
In addition to the reduction in compensation for excess energy, the PSC would have been allowed to consider rate schedules that include increased “fixed charges, including base facilities charges, electric grid access fees, or monthly minimum bills” in order to make solar owners pay more than non-solar owners.
Why were these changes proposed?
Lawmakers claimed that net metering represents a “cost-shift” from solar owners to all other (non-solar) ratepayers. They claimed that earning retail-rate credits for excess solar kWh allows solar owners to avoid paying their fair share for costs associated with maintaining the grid that everyone uses.
This argument is false. Solar, in fact, provides benefits both to the grid by reducing expensive new projects, and to society through jobs, economic growth, and carbon reduction.
In a review of distributed solar cost/benefit analyses sponsored by the U.S Department of Energy, researchers found that seven out of 14 analyses discovered that rooftop solar was a net benefit to the grid, while only two analyses found that it represented a cost-shift. The other five studies provided frameworks to study the costs and benefits, but made no determination. Importantly, none of the studies looked at all possible ways distributed solar benefits the grid and society.
But there’s another, easier way to tell why this bill was proposed and who stands to gain from it. FPL actually wrote the bill that became SB 1024, and delivered it to Senator Jennifer Bradley, along with a $10,000 donation two days later. This was likely inspired by the NEM 3.0 fight in California, where the Public Utilities Commission has proposed a “net billing” scheme that would similarly destroy the state’s rooftop solar industry.
Of course FPL wants to kill rooftop solar in Florida—it would much prefer to be the only game in town when it comes to renewable energy. FPL owns huge solar generation sites and loves that it can keep increasing rates, even though operating existing solar facilities cost it almost nothing.
We know the proposed bill would have killed the solar industry: shortly after its passage, we conducted a survey of thousands of Florida homeowners who had previously expressed interest in solar. Of the people who responded, 93% said they would no longer consider solar for their home if HB 741 were to pass.
What can Floridians do to stop future challenges to net metering?
Governor DeSantis ultimately decided to veto HB 741, but it was thousands and thousands of committed Floridians who stopped the bill. They offered public comments at hearings, sent their representatives countless letters and emails, and made their voices heard in op-ed columns and social media.
You can join the fight to protect solar for the future. No matter who you are or why you love solar, there is a group in Florida for you. Citizens should check out Floridians for Solar Choice and VoteSolar, while people in the solar industry should join FlaSEIA. Strong industry groups are the very best way for us to fight back against entrenched utility interests.
The final word on Florida net metering
Going back to basics here: net metering exists in Florida today, and helps homeowners save money. Paired with incentives like the federal solar tax credit, the time it takes solar panels to pay back their cost averages around 10 years of their 25- to 30-year life.
We know that FPL and other utility companies will do everything they can to kill home solar power, but they haven’t done it yet. That makes now the best time to go solar, before the next attack on solar makes it a much less appealing financial investment.
Thi Deremer
Solar Policy Analyst and Researcher
Ben Zientara is a writer, researcher, and solar policy analyst who has written about the residential solar industry, the electric grid, and state utility policy since 2013.