Want to go solar in Florida? Here's your guide.
Curious about installing solar on your home? Want to know the cost of solar panels in Florida? Maybe see if there are any solar rebates and tax credits available to you? You're in the right place.
Installing a home solar system is something many homeowners dream of, but there are many questions you should ask before you consider solar for your home. If you're the kind of person who'd rather ask those questions directly to a knowledgeable solar expert than do a bunch of reading, fill out our contact form and talk to solar experts in Florida today.
Otherwise, read on to find out all about solar power in Florida!
Why solar panels are great in Florida in 2020
New pro-solar laws were lacking in 2019, and Florida homeowners could really use some good policymaking from the folks in Tallahassee. However, with the Federal Solar Tax Credit set to step down from 26% at the end of 2020, there's never been a better time to consider solar panels for your Florida home.
If you're concerned about the up-front cost of solar or can't take the tax credit because of limited income, a recent ruling by the Florida's Public Utilities Commission has opened up solar leasing in the state, which makes solar affordable and an economically smart decision for more and more homeowners.
If you're ready to take the plunge and see how solar can save you thousands in electricity costs over the next couple decades, connect with our partner installers in your area today!
What you'll find on this page:
We've divided the page up into sections that each relate to a specific aspect of going solar in Florida. First, we discuss solar investment options, and break down the cost of solar panels and how much you can expect to save whether you choose to pay with cash, get a solar loan, or sign a lease.
Then we run through the laws and incentives that govern the solar industry in Florida. We walk you through the ways the Florida state legislature has chosen to support home solar power, and ways they could improve. Each specific policy or incentive is given a grade, and the grades add up to the final state grade.
Here are links to all the sections of our page:
|Your Florida Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Florida|
|Solar Loans in Florida|
|Solar PPAs in Florida|
|Solar Purchase Payback Time in Florida|
|Florida Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
The cost of solar panels in Florida
The cost of going solar is different for every family and home. Your energy needs, the structure of your roof, and other variables go into determining the final cost. Still, we can use information about average Florida home energy needs and current pricing for solar panels to show the average cost. So let's do that!
In 2020, the average cost of home solar in Florida is about $2.90 per watt of generating power, and the average home needs a 10.1-kilowatt (kW) solar system. Multiplying the number of kilowatts by the cost per watt, then multiplying the result by 1,000 (a kilowatt equals 1,000 watts), shows us that the average cost of a home solar system in Florida is $29,000, before incentives like the federal solar tax credit and any rebates you may qualify for.
However, how much solar costs isn't as important as how much you can save. As we'll discuss below, your solar panels will pay back their cost in 13 years, essentially giving you free power for the remainder of the system's 25-year warrantied life.
Note: Every home is different, and it's a good idea look at your past 12 months' energy bills and how much energy you can generate for every kW of solar panels on your roof, so you can estimate how many solar panels you need for your home.
Okay, but what's the best way to pay for solar?
Figuring out the best way to pay for solar in Florida can be daunting, and the reasons to choose one way of paying over another are personal to each homeowner. Outright ownership is always the simplest way, but solar loans have benefits that can't be denied (more on that below). For people who can't take advantage of the federal solar tax credit, a solar lease may be a good option.
To help you pick the one that might be best, we've created the handy decision tool below. Answer a few simple questions about you and your home, and we'll recommend the solar payment option we think is best for you. When you've got your answer, scroll further down this page and read our cost and return-on-investment estimates for each payment option.
Comparing Florida Solar Purchase Options
The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or lease.
As you can see, the purchase option leads to the highest dollar-amount returns over time, but it also requires a big up-front investment. If you can get a solar loan or take a home equity line of credit (HELOC), though, your payments over 15 years will be only a little more than your savings, and you'll still come out thousands ahead in the end.
The thirs option is something unique to Florida—a lease with fixed monthly payments over 20 years (an the option to extend the lease at the end). It's designed to replace your electricity bill, and costs about the same at first, but over time, you can start to see savings. As the utility company raises the price of electricity you no longer have to buy, your payments stay the same!
Read on to find out more about each option.
Option 1: Paying cash for solar
An outright purchase used to be the only way to get solar, and it's still the option that provides the 'biggest' financial returns. The reason we put 'biggest' in quotes here is because it's technically true. You'll see a net return of around $30,000 in 25 years if you pay up front. But it requires a significant up-front investment.
If you have equity in your home or good credit, you can get a solar loan or HELOC with an interest rate of 4% or less. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans below.
If you've got cash and you prefer to pay up front, you'll have to plunk down $28,785. But by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced about $30,000 in income. The reason this works is that electricity in Florida is EXPENSIVE. Solar offsets enough of it to save you about $1,718 in year 1, and it just goes up from there. As the electric company raises rates, you save more and more, and more...
Here’s how the numbers pencil out when you pay up front for a 10.1-kW rooftop solar system:
- Installing a typical 10.1-kW solar system should start at about $28,785. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
- The Feds calculate their incentive based on actual out of pocket costs, so take 26% of $28,785, for a tax credit of $7,484. Your total investment is now down to just $21,301.
- After the tax credit we subtract your first year’s energy savings, which we estimate to be $1,718. That reduces your cost after the first year to only $19,583.
- Your system will pay for itself in just 6 years, and over its 25-year life, you'll see a total net profit of $30,019. The internal rate of return for this investment is a stupendous 8.6%!
- And don't forget... your home's value just increased by around $18,900, too (your expected cost after solar incentives)!
- In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 274 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Florida. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 2: Using a loan to pay for solar
You don't need $29,000 sitting around to pay for solar. As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.
That’s because, in Florida, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you a tax break. Your tax savings will be huge in the first year—more than enough to offset the small difference between the loan payments and electric bill savings. All this means you'll come out ahead early and finish way ahead after 25 years.
A solar purchase like this will make sense for you if the following is true about you and your current situation:
- You can qualify for a solar loan or home-equity line of credit (HELOC) for $28,785, with a fixed rate of 4% or lower and a 15-year repayment period. Don't be put off if you're offered a higher rate. It just means a tiny bit less of the thousands of dollars you'll make with solar.
- You love making money without much risk.
Here’s how the numbers pencil out for a Florida solar purchase with a loan:
- Installing a typical 10.1-kW solar system should start at about $28,785. That's how big your loan will need to be to cover it.
- The electricity you'll save in the first year of operation would have cost $1,718, but your annual loan payments will be $2,642, meaning you would spend $925 on solar this year, but...
- You'll also see a huge tax break. The Feds give you 26% of the cost of your system back as a tax credit, which in this case is $7,484. You'll be paying over time but getting all the benefits up front! Your net year 1 gain for installing solar with a loan is $6,559.
- The electricity savings will continue for 25 years, while your loan payments will last only 15. By the end of the 25-year life of your panels, you'll come out $19,168 ahead.
- On top of the green that will stay in your pocket, your system will mean green for the environment, too. 274 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in Florida. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 3: Leasing the system and getting whatever electricity it produces
Due to some quirks in the way the state's utility rules are written, Florida does third-party-owned solar a little differently than anywhere else. The first thing to know, if that technically, third-party ownership (TPO) is banned here, at least as it regards the traditional method of TPO solar: the power-purchase agreement (PPA).
Under a PPA, the solar company installs panels on your roof and sells you the electricity produced by those panels. You save money because the solar electricity is sold to you at a price that's lower than the retail price of electricity. A PPA comes with a guarantee that the panels will produce a certain amount of electricity over a the life of the PPA contract, usually 20 years.
Florida says that the PPA model causes the solar company to act like a utility company, and (put as succinctly as possible, though it's more complicated than this) unless a "utility company" can provide electric service to all the customers in a given area, it isn't allowed to operate under current Florida law.
But nothing in Florida law specifically prohibits third-party ownership of a solar system for use by a homeowner—just the whole, production guarantee and per-kWh pricing of the PPA model—so Florida solar installers recently petitioned the Florida Public Services Commission, and won the right to offer solar leases
Who are Florida solar leases for?
The ideal customer for a solar lease is someone without a ton of disposable income, or any income at all. If you buy your own solar panels, you get to take 26% of the cost of that installation of your taxes the next year, but that's no good for folks who have no income to tax in the first place, like retirees.
Under a lease, the solar installer will own the panels, and they'll be able to claim the 26% tax credit for themselves, passing on some of the savings to you in the form of lower monthly lease payments. A Florida solar lease should save you money by replacing much of your electricity bill with a fixed monthly lease payment from the start. No upfront investment required!
Just be sure to know how leases work, and do the math to make sure you'll be saving from day 1.
How do Florida Solar Leases work?
Solar leases differ from PPAs in a couple of important ways: instead of paying for the electricity produced by panels, the lessee pays a monthly lease payment for the privilege of having the panels on their roof, and gets whatever energy those panels make. Also, there is no production guarantee, so the customer won't have recourse if the panels aren't making as much electricity as the solar company estimates.
The good news is solar panels are very reliable, and the individual components will still come with warranties to ensure the system can be repaired if something happens to prevent the panels from working.
The final difference is that the lease payment is the same every month, whereas the energy savings will change based on the season. In the summer when the skies are clearer and the sun is at a relatively higher angle, the solar panels produce more energy, but in the winter, the panels will produce less electricity, perhaps not even offsetting the cost of the lease payment.
The savings calculation for a lease is electric bill savings from solar, minus cost of the lease payments. On top of that, you have to worry about panel degradation, which means the same panels will produce slightly less every year as they are exposed to the elements. The amount of degradation will be around 0.5% per year, which is tiny, but adds up to about a 15% reduction in performance over a 20-year lease.
In light of these considerations, you have to look at an annual average savings per year for 20 years, and subtract the lease payments from that amount.
Here's our estimate of the savings with a Florida solar lease over time
- The payments on a typical 10.1-kW solar lease should cost about $145 per month, or $1,740 per year.
- The electricity you'll save in the first year of operation would have cost $1,751, meaning your net 1st-year savings are $11.
- That lease payment will be fixed over time, but the cost of electricity from the utility company will probably go up (as it historically has), escalating at an estimated 3.5% per year.
- Overall, the lease will save you about $12,177 over the 20-year term. After that, you can extend the term, although we anticipate the annual cost to rise to $2,500 or more per year.
- Your system will remove as much carbon from the air as planting 274 trees per year, which is a pretty great thing, we'd say.
Keep in mind, the numbers above are based on an average home in Florida. If you're ready for a custom quote for a solar lease, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Is solar right for your Florida home?
If you answer “yes” to each of the following questions, you’re probably a good candidate for solar.
- Do you own your home?
- Does your roof get direct sun for most of the day?
- Does your electricity bill bother you (specifically how much you have to pay)?
The ideal home for solar has a south- or west-facing roof that gets little to no shade throughout the day. The roof can be covered with anything from asphalt shingles to clay or slate tiles, but the easiest roofs to work with are asphalt and standing-seam metal roofs.
Even if your home does not completely meet these conditions, you may still see huge savings from going solar. Your installer will take everything into account when providing you with a savings estimate.
We get more in-depth with roof shape, covering, and orientation in two useful articles:
Ready to go solar?
Florida Solar Policy Information
Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.
State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.
Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Florida:
Florida's Renewable Portfolio Standard
A Renewables Portfolio Standard (RPS) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels.
An RPS would be critical to strong renewable energy policy in Florida. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities would aid your transition to lower electric bills and offer you incentives to put solar on your roof would be if the state forces them to. Without an RPS, utilities have little incentive to help homeowners go solar.
So what’s going on in Florida? All those people, all that money, and no statewide RPS? We’re not just disappointed; frankly, we’re shocked. Props to JEA (formerly Jacksonville Electric Authority) for voluntarily opting into an agreement with some environmental organizations to produce 7.5% of its power from clean, renewable sources by 2015. Really, we meant that – but 7.5% in one of the state’s smaller cities is just a drop in the bucket.
Florida's Solar carve-out and SRECs
Along with a strong RPS, some of the best solar states also require a specific percentage of the electricity generated in the state to come from solar panels specifically. It’s been shown to spur immediate and widespread adoption of solar energy, but not here in Florida.
Florida Electricity Prices
Florida pays an average of about 12 cents for a kilowatt-hour (kWh) of electricity. That’s a little more than a penny cheaper than the national average. Cheap electricity rates mean you’re probably not feeling too much of a strain in your pocketbook... yet. Just don’t forget why electricity is so cheap.
That’s right, fossil fuels. Lots and lots of non-renewable, greenhouse gas-producing fossil fuels. When all those fossil fuels really start to bite us in the butt, or start to run low… or both… electricity rates are going to rise, and fast. When that happens you’re going to be really, really happy you switched early to all that efficient, clean solar power that will be in high demand.
In the meantime, solar power will still save you a chunk of change in Florida. We’ll go over just how much in a minute.
Florida Net Metering
Statewide with caveats
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus. Florida’s Public Service Commission “PSC” set specific standards for net metering back in 2008. The PSC rules apply only to the state’s investor-owned utilities; the rules do not apply to electric cooperatives or municipal utilities. Municipal utilities and electric cooperatives are required to offer net metering, but specific standards are not set by law.
Assuming you’re a customer of an investor-owned utility (most of us), any net excess generation (NEG), i.e. any surplus energy, is carried forward as a credit at the full retail rate to your next bill for up to 12 months. At the end of a 12-month billing period, the utility pays you for any remaining NEG at an avoided-cost rate.
Florida’s really making a late comeback here, because not only is that just about the perfect net metering law, it looks like you won’t have any problems getting on the grid. Unlike most states, Florida has no set capacity limit, i.e., you won’t get blocked from hooking up to the grid for net metering just because some of your neighbors have already done so. Your small residential system also lacks any of the possible hurdles and red tape that we’ve seen in other states. Now that’s more like it, Florida!
Florida Interconnection Rules
Overall we gave Florida a mediocre grade on interconnection standards because of the requirements for a redundant external disconnect switch and the mandatory insurance requirements for larger solar systems. Don’t worry though! These problems shouldn’t apply to you and your single-home system. For all systems under 10kw, it should be smooth sailing to get connected to the grid and start raking in those net metering savings.
Florida Solar Incentives
Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.
These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 26% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.
Let's see how Florida measures up:
The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.
Florida Solar Power Rebates
City of Longwood: 10% of costs up to $500
OK. It’s official. This is a trend. Florida has no statewide solar rebate program, and the few patchwork fill-ins from individual utility companies have closed. The statewide rebate program you may have heard of, Florida’s Solar Energy Systems Incentive Program, is sadly no longer taking new applicants.
There is one place that still offers solar rebates in Florida. The city of Longwood. There, you can get up to 10% of the costs of installation back as a rebate from the city. Sounds good, right? Not so fast... the rebate has a maximum of $500, so it's not nothing, but... well... the good news is you can take the $500 each year they offer it, but only if you keep making energy efficiency improvements that meet the city's criteria. Go to the city's site to read more.
Florida Solar Tax Credits
No State Income Tax
Since Florida doesn’t have any income tax, there aren’t any solar tax credits to redeem! Fortunately, local organizations like this are forming to help people like you. This group combines the Florida Solar Energy Industries Association, the Florida Alliance for Renewable Energy, and the Southern Alliance for Clean Energy; their goal is to highlight the benefits of solar and provide insight as to what can be changed to help this energy type thrive in the state of Florida. And hey, you still get the Federal government’s sweet 26% tax credit.
Property Tax Exemption
Thank goodness Florida at least realizes that homes with solar are worth more than homes without, and the state has been willing to exempt that value from additional property taxes. Your home’s value increases as much as $20 for every 1 dollar of electricity you save in a year. Not paying taxes on that value is a sweet deal.
Sales Tax Exemption
Florida gets another rare “A” here. Home solar panel systems are free from state sales tax, saving you 6% or more, right off the bat. Baby steps, Florida. Baby steps.
Low-income Solar Programs
Grade: FLearn more about low-income solar programs available in the U.S.
The consensus on Florida solar power rebates and incentives
While Florida’s government hasn’t done a whole lot to help home solar power take off, there’s so much sunshine here it almost doesn’t matter. If you’re interested for solar panels for home use, Florida is a fine place for it. Just be wary of lease offers and stick with low-interest financing or a cash investment. Your panels will pay back their cost in a little over a decade and provide you with many years of free electricity after.
Meanwhile, you should contact your state representatives and ask them to pass an RPS law with protections for solar owners. If Florida had an RPS and a solar carve-out, we’d have a much more sunny outlook for home solar here.
Again, if you are confused about how these numbers work and would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!