2015-09-03 / Top News

Squandered SUNSHINE

Florida’s policies restrict the use of solar electric or photovoltaic energy compared to most other states. Voters could change that in 2016.

IF EVERY AVAILABLE ROOFTOP IN FLORIDA WAS used, solar electric panels could produce some 52,000 megawatts of electricity. That’s nearly enough to meet the entire electric energy demand of the state, found a 2008 report prepared for Florida’s Public Service Commission, which is in charge of regulating the state’s public utilities.

Rooftop and ground mounted solar electric or photovoltaic (PV) systems have by far the highest “technical potential through 2020” of all of Florida’s renewable energy sources, the report found, about 89,000 MWs all together, well above the roughly 60,000 MW electric capacity of Florida now. Note that “technical potential” takes into account the roof and ground space and technology needed but not the trickier question of how to integrate PV power into Florida’s current utility system. Florida’s power diet is heavily reliant on natural gas. For homeowners and businesses interested in solar electric power, the difficult question becomes how to bring down the upfront cost of installing solar panels enough to make them a viable economic choice.

Floridians for Solar Choice started gathering petitions and raising money late last year to put a constitutional amendment on the November 2016 ballot that would end Florida’s ban on PPAs. 
FLSOLARCHOICE.ORG / COURTESY PHOTOS Floridians for Solar Choice started gathering petitions and raising money late last year to put a constitutional amendment on the November 2016 ballot that would end Florida’s ban on PPAs. FLSOLARCHOICE.ORG / COURTESY PHOTOS At least half of other states have tackled this question in part by adopting rules that allow private companies to sell energy and lease solar equipment directly to consumers for little or no upfront costs, commonly called “power purchase agreements.” Florida is one of only four states that specifically prohibits PPAs, or for a homeowner or business to buy solar electric energy from anyone other than a public utility. Another 21 states do not forbid the practice but also haven’t endorsed it.

“Florida is the most restrictive state in the U.S. as far as rules for utilization of solar,” said Professor Joseph Simmons, Ph.D., Florida Gulf Coast University Backe Chair for Renewable Energy and former head of the Arizona Research Institute for Solar Energy. “In other states, companies can come in and lease a solar system to put on your roof. They charge you kilowatt hours for that installation over a period that is determined by the contractor. Generally it’s a 10- or 12-year contract.”

A contract or PPA would also be passed on to a new homeowner if the house were sold.

“I’m not sure if it’s just the legislature or just the mindset in Florida, they’ve never put the backing behind it to incentivize it,” said Aaron Fields, an owner of Advance Solar & Spa, an established contractor that serves the Southwest Florida region.

LEVY LEVY One of the reasons they don’t, he and other industry professionals say, is that nonrenewable energy is still relatively cheap in Florida compared to states such as California.

“Utility companies have a duty to customers to provide the most cost effective and environmentally sound energy,” wrote Orin Rosenfeld, president of Rosenfeld Realty Advisors in Boca Raton, to the PSC. “Solar is one of these and cannot be ignored any longer, especially in a state with abundant sunshine like Florida.”

Currently, those using solar panels must sell the energy they produce back to the power company in an agreement called “net metering.” The power company distributes the solar electric energy they produce through the grid and credits them for it, lowering and in some cases eliminating their electric bill.

Solar Choice initiative

SMITH SMITH A political action committee called Floridians for Solar Choice started gathering petitions and raising money late last year to put a constitutional amendment on the November 2016 ballot that would end Florida’s ban on PPAs. It would allow private third-party solar companies to contract with homeowners and to compete with big public utilities such as Florida Power & Light, as well as smaller local power companies, in the energy market.

“I don’t think it’s such a bad idea that the power companies compete,” said Palm Beach Gardens Councilman David Levy, although he’s undecided on the Solar Choice amendment.

FPL and the state’s other major public utilities are publically traded, forprofit companies, but under the current arrangement the state allows them, along with a network of smaller local utilities, some of them nonprofits, to monopolize the energy market in exchange for letting the PSC regulate them and providing reliable service for all. They have organized against the Solar Choice amendment. “You can’t blame the investor-owned company for wanting to make as much as they can for their investors,” said Professor Simmons. “But you can blame the Public Service Commission for not serving the public. And that’s the difference between us and other states. In the states where solar (electric power) has (grown more rapidly), it’s because the PSC has been more concerned about all the benefits of solar and taking advantage of them despite complaints by the regulated utilities.”

To make it on the ballot, Solar Choice will need approval from the Florida Supreme Court, which will revue the amendment language starting Sept. 1. Then they’ll need more than 683,000 signatures, an effort that could cost an additional $1 million, the group estimates. It has already raised about $436,000 and signed up 109,397 voters.

If they fail, “We would fully intend to keep advocating and agitating for people having a choice and go to the legislature and (PSC), and say ‘why aren’t you doing your job and looking out for the interest of the people?” said Stephen Smith, on the board of Solar Choice and executive director of the Southern Alliance for Clean Energy. But it would miss the 2016 ballot, a presidential election year that gives it the best chance of passing.

The Solar Choice amendment would also allow consumers to generate and sell up to two MW of electricity on their own, enough to power roughly 300 homes or an average Walmart store, depending on how energy efficient they are. (Few homeowners or businesses could produce that much now because it would take up to 10 acres of space for the panels).

HECKER HECKER Allowing PPAs would also lower costs for solar panel equipment and installation in general in the state because large contractors such as SolarCity, a solar power provider with staff in 19 states and

Washington, D.C., are backed by investment bankers and have a trained staff, Professor Simmons said: “Solar City right now is so rich and solar investments are such good investments that they have excess money. They would love to have a market like Florida open up for them.”

Supporters say solar would give con- sumers a steady source of electricity that wouldn’t go up in price, hedging against nonrenewable energy, which rises historically, although remains relatively cheap in Florida at about 12 cents per kilowatt hour. Although solar energy is generally cheaper than nonrenewable sources, upfront costs for the technology remain the biggest barrier for consumers.

LERNER LERNER “As the Sunshine State, obviously solar is an extremely viable and logical source for supplying energy needs and it is being underutilized and underinvested in which is why this Solar Choice amendment is needed,” said Jennifer Hecker, director of natural resource policy for Conservancy of Southwest Florida.

“Not only is it not a loser of revenue but solar installations are enhancing our revenue,” said Cindy Lerner, mayor of the Village of Pinecrest, who supports the Solar Choice initiative. “We get permit fees of hundreds of dollars, we raise property tax revenue, it’s a whole new green economy and job booster.”

Solar industry professionals in Florida estimated that at current rates it could take roughly 10 or 12 years to break even on a solar PV system for a typical home depending on a number of factors. The systems themselves are built to last upwards of 20 years, with some lasting twice that long, said Mr. Fields of Advance Solar.

BATCHELOR BATCHELOR There are other questions besides cost, Professor Simmons points out. What are you leaving for your children? What benefits or cost will you give them?

He said, “I would predict in about four years, (PV) storage will be so inexpensive that people will say, ‘I’ve had it with this utility, I’m going off the grid,’ and they’ll be able to do that without paying a big penalty economically.”

The price of PV systems continues to drop in Florida, by 17 percent in the last year, according to Solar Energy Industries

Association, and by 45 percent nationally since 2010.

Defending the status quo

The Solar Choice initiative has come under attack from Florida’s major utilities, including FPL, which provides electricity for nearly half of the state’s consumers who live in South Florida and along the coasts.

The major utilities and its supporters say that the Solar Choice amendment would threaten consumers, allowing unscrupulous, relatively unregulated out-of-state contractors to take advantage of them and cause non-solar customers to pay more when the utilities lose customers who engage in PPAs.

“I do not support any policies that will drive up the energy costs of Florida households and businesses,” wrote Robert Young of Cape Coral to the PSC.

And because companies would lose revenue, opponents of Solar Choice say it would reduce the franchise fees the utilities pay to local governments, affecting the services they provide.

According to the Florida Municipal Electric Association, the state’s major utilities, FPL, Duke Energy, Gulf Power and Tampa Electric Co. have helped finance their own competing 2016 ballot amendment initiative, contributing a total of $115,000 to a political committee called Consumers for Smart Solar, in an effort to stop Floridians for Solar Choice.

RODRIGUES RODRIGUES In a memo in May, FPL and three other utilities wrote that “even displacement of one percent of utility sales (to private companies) would result in a loss of about $8.5 million annually to the affected counties and municipalities.”

Mr. Smith of Solar Choice argues instead that those losses to local governments would be minimal and offset by the creation of a solar PV industry and the money consumers save on solar power spent in the community; but also that the argument is beside the point.

“If I said ‘I’m going to be more energy efficient and therefore I’m not buying as much electric power from a utility company,’ is that unfair to other customers?” he asked. “Of course not.”

Dick Batchelor, co-chairman of Consumers for Smart Solar, contends that his competing amendment would also encourage more use of solar PV, but is designed to “(stop) the other amendment.” His primary concern, he said, is that the other amendment creates a new industry through the state constitution instead of doing it through the legislature.

“It’s certainly worth a consideration,” he said of the idea that you could have both private companies and regulated public utilities, but that the other amendment gives the private companies too much leeway. “Consumers don’t want an unregulated enterprise that has no regulations at all.”

He adds that the state’s big utility companies “are heavily invested in solar, and hopefully will continue to be.”

The Smart Solar initiative essentially makes official what is already legal in Florida, said state House Rep. Ray Rodrigues, R-Estero, who supports it. “It’s a defensive mechanism, if you will.”

The other Solar Choice amendment is based on “distributed generation,” he explained, with unregulated private companies competing with public utilities, instead of the system of regulated monopolies Florida uses now.

“If you go with a distributed generation what you lose is the guarantee that everyone will have access to reliable affordable power,” he said. “I’m not convinced the benefits would outweigh the cost. I’m all in favor of increased use of solar but I think the way we have it now is adequate.”

He adds, “Solar is popular in Florida, but what is also popular is not paying for someone else’s solar infrastructure for their house.”

Because state rules require the utilities to maintain the grid infrastructure for all energy consumers, solar and traditional non-solar users alike, he and other Smart Solar advocates say, traditional users would continue to pay for the grid while exclusively solar users and private companies would get a free ride.

“A situation where everyone has access to solar and everyone pays their fair share towards infrastructure to the gird, I think that is the best of both worlds,” he said.

In some states with PPAs, a solution to the issue of paying the fair share has included solar users continuing to pay a fee to stay connected to the grid. Rep. Rodrigues said that if the Solar Choice supporters “make everyone in Florida understand and believe that’s what their amendment can do, if they can do that

I think their amendment passes.”

But he is not convinced.

Rep. Rodrigues is sponsoring his own 2016 ballot amendment in the House, with a similar one in the Senate, that would ease the tax burden of installing solar panels for homeowners and businesses.

“I think solar should be a bigger part of our portfolio,” in Florida, he said. “If you look at where we are, we have greater access to solar and I don’t know that we’re taking advantage of that.”

But for those who want solar now, he said, “There shouldn’t be anything in the state that holds them back from that. And I don’t think our status quo prevents them from that currently.”

Unrealized solar potential

In the six years since the report describing the huge technical potential of solar electric power in Florida, the PSC and state lawmakers have done relatively little to expand the use of PV power or even discuss it, say critics. Florida ranks third in the country for rooftop solar potential but comes in 13th for total solar PV capacity installed, according to the Solar Energy Industries Association.

“We haven’t had very many robust conversation on renewable energy,” allows Ryan Mathews, a legislative advocate for the Florida League of Cities, although the League is against the Solar Choice amendment. “We support solar power as long as it does not impede the business and operations of Florida’s municipalities.”

Those who are for the Solar Choice amendment point out Florida lags behind in use of PV power compared to Georgia, New York, New Jersey, California, Arizona, Colorado, Oregon, New Mexico and other states, which in spite of regulatory and legislative challenges found ways to allow private companies into the utility market place, the Conservancy of Southwest Florida said. One solution included exempting thirdparty, privately owned PV systems from being defined as “public utilities.”

“It is the state’s intent to promote the use of renewable energy, yet Florida currently falls behind the rest of the nation in its use of solar energy,” the Conservancy wrote to the PSC. “The use of solar energy can lower energy costs for the consumer, spur economic growth, provide a consistent energy source during extreme weather events, and conserve the environment.”

State records show about 6,700 of the state’s roughly 8.5 million residential and 1.1 million commercial energy customers use solar PV power with the required net metering agreements. Those customers along with existing solar fields owned by public utilities account for less than a percent of the state’s energy generation.

In addition, the Public Service Commission “approved allowing utilities to end solar rebates in 2015 and gut energy efficiency goals by 90 percent, because the utilities claimed neither is ‘cost effective,’” reported PolitiFact Florida in January.

“It’s going to hurt the industry a lot,” said Steven Baillie, owner of Solar Concepts, a contractor in Palm Beach and Broward counties. “You need subsidies in order to operate because it is an expensive system.”

Currently, the only rebate for customers who buy solar PV panels is a 30 percent federal tax credit, which is set to expire in 2016 unless lawmakers renew it.

Instead of encouraging the growth of solar business through continued rebates, power purchase agreements, and other mechanisms, say Floridians for Solar Choice and its supporters, the policies of Florida’s utilities, lawmakers and PSC are stifling a new solar electric industry that is ready to bring construction and manufacturing jobs to the state.

“The greatest difference (between solar and natural gas-produced electricity) is seen when looking at where the money goes,” wrote Professor Simmons in response to Florida Weekly questions. “All the costs to purchase natural gas are spent outside the state and amount to more than $6 to $7 billion per year, repeated year after year. The only cost of solar-produced electricity is the capital cost of the installation of which more than 60 percent is spent on labor for installation. With educational training of a workforce, this money can be spent locally in Florida. As a result, dollar for dollar, natural gas is a wasted expense while every dollar spent on solar invests 60 cents into the local jobs.”

He adds, “Of course, no one proposes totally replacing natural gas with solar at this time, because energy storage technologies are not sufficiently developed. So for now, one needs a proper balance of solar and natural gas. Wind is a very important renewable resource, but Florida does not have regions of good wind except off-shore.”

The 10-Year Plan

More than half of Florida’s renewable energy now, estimated to supply about 2.8 percent of the state’s total electric energy capacity, comes from processing biomass such as municipal solid waste or sugarcane waste (sugar mills get energy from burning it, for example).

And in its 2014 10-Year-Site Plans review, the most recent available, the PSC expects biomass to continue to be the Sunshine State’s most abundant and reliable renewable energy source, continuing to account for almost half of it through 2023. Florida has no statewide renewable energy portfolio requirements.

“While these new projects represent a significant increase from the existing total, renewable generation continues to provide a relatively small contribution towards the reduction of the state’s reliance upon fossil fuels,” the 2014 Plan reads.

The relatively low cost of natural gas combined with Florida’s lack of renewable energy standards are two of the main reasons why “current market conditions do not favor the development of renewable generation.”

In 2013, solar electric energy accounted for almost .4 percent of the total, or 218 MW of solar PV energy out of 57,375 MW total electric energy. By 2023, solar PV will still account for less than a percent of the total according to the 2014 Plan, with the state adding 332 MW of solar PV energy. That’s not quite half of the 722 MW of renewable energy capacity the state expects to add and is a fraction of the total 12,500 MW worth of new utilityowned plants the state plans to add through 2023.

In the wake of news articles about the Solar Choice and Smart Solar amendments, the PSC said that utilities plan to expand PV capacity, which included approving 110 MW of solar generation for FPL. Duke Energy Corp. announced plans to install 35 MW by 2018 and as much as 500 MW by 2024. ¦

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