Your 2019 guide to getting solar panels for your home in Florida
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Florida home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
** What's new for 2019 **
Florida isn't as great a state for solar as its "Sunshine State" nickname suggests it should be. Lawmakers in Tallahassee have had a really tough time coming up with common-sense solar laws to help homeowners in the state go solar, potentially because of low electricity prices from utility companies that still rely on coal, and, oh yeah... millions of utility company dollars spent lobbying the legislature to prevent good laws from getting passed.
Still, as home solar has gotten cheaper, it's become increasingly viable for Florida homeowners to install panels and see immediate savings. Solar installations carry 25-year warranties, which means your roof will be making electricity and saving you money until your kids have kids of their own.
Finally, a recent ruling by the state's Public Utilities commission has opened up solar leasing in the state, which makes solar afordable 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!
The Solar Strategy section is focused on the 3 ways of paying for solar in Florida, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.
The Solar, Step by Step section is a guide to everything that happens from before you get solar quotes to the time when the panels are on your roof and you're getting ready to claim that sweet solar tax credit.
The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Florida. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.
Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Florida.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Florida Solar Strategy|
|Florida Solar, Step by Step|
|Florida Solar Policy Information|
|Florida Solar Incentives|
|Your Florida Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Florida|
|Solar Loans in Florida|
|Solar Leases in Florida|
|Solar Purchase Payback Time in Florida|
|Florida Solar, Step by Step|
|Getting & Comparing Quotes|
|Financing Your System|
|Signing a Contract, & What Comes After|
|Installation, Inspection, & Interconnection|
|Operation, Maintenance & Claiming the Tax Credit|
|Florida Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Florida
Figuring out the best way to go solar in Florida can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.
We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:
How to pay for solar panels in Florida
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. Since Florida doesn't allow homeowners to get solar through a third-party agreement like a lease or Power Purchase Agreement, we included two different sizes of solar loans—one for people with a lot of equity, and one for people with just a little.
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.
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—with lower equipment costs and a tax credit, solar costs less than ever before, and a solar installation in Florida pays itself off in 13 years. But if you're interested in solar as an investment, taking a loan to pay for the system is a better option.
With a loan, you can make monthly payments instead of putting $16,250 down on a solar system, which means you save money on electricity as you pay down the cost of your panels. If you have equity in your home or can get a large loan with an interest rate of 5% or less, a loan is the option to go with. 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 $16,250, but a Federal tax break and energy savings will erase a bunch of that after just 1 year. Over 25 years, your system will have produced nearly $15,000 in income, after your system cost is paid back. The reason this works is that solar offsets your electricity costs—enough to save you $729 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 for a Florida solar purchase with a 5-kW rooftop solar system:
- Installing a typical 5kW solar system should start at about $16,250. Don’t worry – even without state incentives, you can still knock a big chunk off the price right off the bat.
- Since the Feds calculate their incentive based on actual out of pocket costs, no state incentives means a bigger federal solar tax credit. Subtract $4,875 (30% of the costs) for a new price of $11,375.
- After the tax credit, subtract your first year’s energy savings, which we estimate to be about $729. That brings your cost after the first year to $10,646. That's 35% off the starting cost, in just one year!
- By the time your system pays itself back in year 13, you’ll be seeing over $1,000 per year in savings until the end of your system’s life.
- When all is said and done, our 25-year estimate shows a total net profit of $14,444.
- And don't forget... your home's value just increased by more than $19,000, too (your expected annual electricity savings over 20 years)!
- 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. In fact, the energy you’re not using has the carbon equivalent of planting 110 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
This is without a doubt the best option when it comes to percentage return on investment. That’s because it relies on using someone else’s money for the purchase price, which is paid back over time. The cost is similar to a new car loan, but because solar makes you money, it's a tremendous investment. One way to finance solar like this is a Home-Equity Line of Credit (HELOC), but solar loans at great rates are being offered by installers around the country. The chart above is our estimate for the average homeowner, so get a custom quote for a $0-down solar loan to get an accurate picture of how much solar can save you.
The reason a solar loan works so well is that you don’t have to put any money down, but you still get all of the incentives that go along with buying solar. You'll get the 30% federal tax credit and the energy bill savings will start right away. The bad news is your loan payments will be higher than those energy bill savings, so you'll end up spending about $59/month for solar in the first year. That difference will come down each year as electricity prices rise, but your system will keep on producing about the same amount of electricity.
Here’s how the numbers pencil out for a Florida solar purchase with a solar loan or HELOC:
- Installing a typical 5-kW solar system should start at about $16,250. 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 $729, but your loan payments will total $1,442, for a difference of $713, or about $59 per month.
- That's not so bad when you consider your tax savings for the year will be $4,875! You'll come out more than $4,150 ahead in year 1, which should help ease the burden of loan payments for a few years, at least.
- When your loan’s paid off in year 15, you’ll start see over $1,100 per year in savings until the end of your system’s life.
- For our 25-year estimate, you'll end up with $9,059 in profits.
- And the future is going to look a little brighter, since your system will mean green for the environment. It'll be like planting 110 trees 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 30% 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 30% 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 5-kW solar lease should cost about $50 per month, or $600 per year.
- The electricity you'll save in the first year of operation would have cost $762, meaning your net 1st-year savings are $162.
- That lease payment will increase by 2% per year, but the cost of electricity from the utility company will probably exceed that, escalating at an estimated 3.5% per year.
- Overall, the lease will save you about $5,500 over the 20-year term.
- Your system will remove as much carbon from the air as planting 110 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:
The step-by-step process for going solar in Florida
The most important thing to know about the entire process of going solar is that your solar installer is good at this stuff.
They'll make sure all the T's are crossed and the I's are dotted during the whole process:
- Step 1: Getting and comparing quotes
- Step 2: Financing your system
- Step 3: Sign a contract with an installer, and what comes after
- Step 4: Installation, Inspection & Interconnection
- Step 5: Operation, Maintenance and Claiming the Tax Credit
Step 1: Getting and Comparing Quotes
There are now many slick solar estimate tools online. Some have you draw lines on your roof from satellite imagery to place your panels and explain your savings. Others pit solar companies against each other in an automated battle for your dollars. Others still track the sun over the course of the year to show you your electric production with the panels you just struggled to draw on your roof.
In our view, they're all a waste of time. If you're serious about installing panels, the best way to get an accurate view of your costs and savings is to get actual quotes instead of messing around with these online tools.
After all, you're not a solar PV designer, it's better to let an expert who knows what they're doing use their own fancy tools for you (believe us—they have fancy tools).
Also, nothing beats a human connection from a trusted source. We've been forging relationships with strong partners and installers since 2007. They know what they're doing, and they're good people.
When you complete our form, we'll connect you with them. You’ll quickly get an accurate reflection of how much electricity your roof can make, how much your system will cost, and how long it will take before you see a profit. In Florida, with a solar loan or lease, you'll be in the green immediately.
What you should look for in a solar installer
If you seek solar quotes directly from providers without our help, be sure to judge them by the following criteria. All partners in our network are:
- Trained and Skilled - The standard for solar installers is certification by the North American Board of Certified Energy Practitioners (NABCEP for short). That means they’ve undergone training and passed tests that ensure they know what they’re doing.
- Experienced - How many solar systems has the company installed? A minimum of 10 is a good number to shoot for, unless you know they company well. Of course, choosing Tesla or Sunrun means you’re with a company that has installed thousands of systems, but their process can seem less personal, and their prices are often higher than smaller companies.
- Well-regarded - Look at reviews of solar providers on Yelp and Google and other review sites. Or simply ask the salesperson to speak with one of the company’s former clients. Solar owners generally love talking about their systems, and you can benefit from their experience.
- Licensed, bonded, and insured - Make sure the installation crew includes a licensed electrician, because if not, that can be a surprise charge to get the system hooked up.And of course, the company you’re going with has to be bonded and insured in case they do any damage to your home.
The solar quote process
Your first contact with one of our solar providers will be over the phone. They’ll take a look at a satellite photo of your roof and verify some simple details about you and your home. Many will be able to provide you a complete estimate without coming to your house. If you prefer, you can review your estimate in person.
Information included in solar quotes
Your quote will include information about how many panels will be used, how much electricity they can produce, your expected savings over time, and more.
- System size - System size isn't just about the square footage the panels will occupy on your roof. In the solar industry, size refers to the number of watts your system can produce in full sun. The average solar panel puts out 250 watts at a time, so your installer would call a system of 20 panels a "5-kW system."
- Energy production - Your solar panels' energy production is measured in kilowatt-hours (kWh), just like your electricity usage is measured by your utility company. The quote will include an estimate of the average kWh your system will produce per year, and might even show you how the seasons affect expected production by month.
- Cost and incentives - Solar system prices are quoted as "total cost" and "dollars per watt." For example, a 5-kW system that costs $15,500 has a $3.10 cost per watt. These are the first figures to compare what you’re being offered. The installer should also show you the available incentives that being the net cost of the installation down. Everyone is eligible for the federal solar tax credit of 30% of the system's cost, but there may be local incentives available, as well.
Note: if you're considering a lease, you won't be eligible for incentives, and the cost section might include your expected costs per kWh, but only as a guess. Solar leases in Florida cannot by law come with a guaranteed rate of energy production.
- Equipment - Not all solar panels are created equal, but nearly all the panels used by reputable installers should be able to reliably make electricity for the next 25 years. The options are numerous, and your installer should be able to provide you quotes for a few different kinds. For example, if having panels made in the USA is important to you, your installer should be able to offer you a quote for a system using panels from the USA and panels made elsewhere.
- Warranties - A solar system has multiple warranties that cover the panels, the inverter, and the installer’s work on your roof. What can change between quotes is the length of the warranties and what they cover. Read our full post on solar warranties and what they cover.
Deciding which solar quote is the best
Now for the easy part: choosing which solar company has the best offer. If one installer offers a lower cost per watt using great equipment, they might be the best choice. Just keep in mind that important considerations other than price set solar companies apart.
Larger installers are all about full service and efficiency, making the process of going solar fast and streamlined. They all offer in-house financing options and multiple ways to pay, and they might also throw in bonuses like free monitoring equipment and long-term warranties.
Smaller installers don’t have the overhead of national solar companies, so they can compete more on price. You might even develop a meaningful relationship with a member of your community who has been doing this for a while, and if something goes wrong with your system, it might feel better to pick up the phone to call them rather than an 800 number tied to a high-volume call center. Just keep an eye on their financing offerings. Third-party lenders for solar financing sometimes include finance charges or higher interest that can mean you save less in the long run.
For more of our guidance on choosing an installer, check out these useful articles:
- #1: Why you should get multiple solar quotes and check the math
- #2: 9 crucial things to look for in a solar installer
- #3: How to negotiate with a solar installer.
Step 2: Financing your system
If you plan to pay up front, this step is easy. Just get your checkbook out and make it happen, high-roller! But if you’re interested in a solar loan or lease, it’s time to explore options.
Many installers will offer you financing at this point. Compare their offer to the other options you have. If they offer third-party financing, it might be time to explore a HELOC with your bank before you sign their financing arrangement.
We discussed the options in the section on loans above, but here’s a quick refresher:
- Home Equity - Probably the best way to pay for solar, because you control it, the rates are lower, and you can repay it in a more flexible way.
- Solar loans - Most installers will offer some kind of The big guys like Sunrun, Vivint and Tesla/Solarcity have their own loans they can offer you, but most mid-sized installers work with a 3rd-party solar loan provider like Mosaic. These loans are usually structured with the solar tax credit as a balloon payment after 1 year, and the balance of the system cost as a long-term loan at 5%-7% interest.
- PACE loans - Property-Assessed Clean Energy financing is good for people who don’t have amazing credit or tons of equity, but who plan to live in their home for years to come and don’t mind slightly higher interest rates. The loan is repaid through your property tax bill, the interest is often tax-deductible, and repayment can be spread across as many as 25 years.
Don't forget about leases
If you don’t mind giving up a little control and letting your solar company own the panels, choose a lease instead. These are only available through an installer, since they’ll be the ones who own the system.
Again, a lease is best if you don’t have enough income to take advantage of the 30% federal solar tax credit, but it can work for anybody. It’s generally simpler than owning your own system. You just sign on the dotted line and start making lease payments for the system, which should generate enough electricity to save you money on your electric bills.
Step 3: Signing a contract, and what happens after
So, you’ve settled on a solar installer, and lined up the funding to pay for your shiny new panels! After you sign on the dotted line, it’s time for the pros to begin their work!
First up, you’ll be seeing a few folks out for site inspections. There will be a master electrician out to look at your main circuit panel and wiring, a solar contractor to do a detailed analysis of your roof and determine the best placement for the panels, and a roofing contractor to examine the structural integrity of your roof.
Design and permitting
Following the inspections, the system designer will get to work on a digital design for your system. Your solar company will finalize the design and components, and give you a final price for approval. Once you’ve authorized the final design, your solar installer will finalize the documents and submit them to your locality for permitting.
Step 4: Installation, Inspection & Interconnection
Florida is a mature solar market and most installers have their procedures down pat. Installation, which used to take several days, now usually takes between 4 and 8 hours. Unless your roof is complicated or your electrical systems need updating, your crew should arrive, perform their duties, and be done within one day.
Your installer will have already completed their site surveys and the workers on the truck will know exactly what they're installing and where. The crew will arrive at your home, set up their gear and get to work on your roof.
The first thing they'll do is mark off all the places the solar panel mounts will be placed, then attach those mounts to your roof. If you'd like to know more about the big metal bolts that will be screwed into your rafters, check out an article on how solar panels are attached to your roof.
The crew will then install the racks and panels, making connections that either wire the panels together in strings, or bring the wires from the micro-inverters together. If the crew includes a master electrician, that person will make the final connections between the panel, inverter, and your main AC panel (you may have to wait a day or two for the master electrician to finish the wiring).
What the heck are micro-inverters?
Traditionally, solar panels are wired in a series and connected to a single inverter box, which converts the electricity from DC to AC so it can be used in your home. Those large inverters work great for most people, but tend to make the system overall a tiny bit less efficient. Also, if a shadow or cloud passes over and blocks sunlight to some of your panels, the whole system suffers.
Micro-inverters, on the other hand, are attached to the back of every panel, which ensures that the maximum energy output of each panel reaches your home wiring. They cost a little more, but for a house with a partially-shaded roof, they can pay for themselves quickly.
Here's an infographic showing how the two types of inverters differ:
Inspection and Interconnection
After your system is installed, it needs to be connected to the grid, and for that, you’ll need to have it inspected. Your installer will line all this up for you, too, and it may take between a couple days and a couple weeks to get the final inspections scheduled and completed.
Your city may require an inspection from the fire department, but the most important inspection will come from the utility company, who will send out someone to examine your system’s components and wiring and install the new electric meter that will record your solar kWhs.
At this point, you might even get a chance to turn the system on yourself!
Step 5: Operation, Maintenance, and claiming your tax credit
So you’ve got a shiny new solar system installed and it’s working. Now what? To be honest, not much. Solar panels are the platonic ideal of a Ron Popeil creation: set it and forget it. Still, you might find yourself compulsively checking your monitoring software to ensure those panels are working as promised.
After the deep breath of fresh air that comes with seeing your new electric bills, you'll relax into a state of solar bliss. During other moments, you'll smile as you think of all the acreage of forest you basically just planted using only the few hundred square feet of your roof.
There are a few important things to know after your panels are installed:
- How to maintain your solar panels
- How to tell if your panels are working
- What to do if they break down
- How to claim the federal tax credit for solar
How to maintain your solar panels
Maintaining solar panels is a breeze. Solar panels are designed to handle rain, wind, snow, hail, and whatever nature throws at them for 25 years or more. All the maintenance a solar panel system needs is a yearly rinse and squeegee to take off extra dust and grime; maybe 2 or three times yearly if you live in a very dusty place. You can get by with a hose, if you need to.
If you own the system, either with a loan or having paid cash, you can expect to do (or contract out) the work yourself. If you have a solar lease contract, this annual or semi-annual cleaning may be included as part of your agreement, or you may have the responsibility to do any cleaning yourself. Be sure to look for this information as part of a lease offer.
How to tell if your solar components are working
Other than cleaning, you may someday experience the failure of one or more components. Right off the bat, you should be able to see whether your panels are delivering energy on the panel of your inverter or net meter.
Read the user manual of your inverter to find out how to access the proper information, but most inverters will have a real-time production number on an LCD readout right on the front.
If you have a system with a central inverter, you will likely need to replace it after 10-15 years. If, instead, you have micro-inverters attached to each panel, they should last for the life of your system, and if not, they’re usually covered by 25-year warranties.
Your installer may also have included monitoring software as part of your installation, either on a screen attached to your system or on the web. The monitoring software will tell you if the system is functioning properly, and, if you have micro-inverters on each of your panels, can even tell you if any panels are not working as they should.
If you discover that one or more of your panels isn’t working, it’ll be time to file a warranty claim.
What to do if your panels stop working
If you’ve done a good job by choosing one of our installer partners, you’ve got warranties that cover the installation (e.g., watertightness of roof penetrations and structural integrity of your roof), the panels (manufacturing defects) and the energy (production guarantee).
Your first step is to figure out who to contact. If you have a lease contract, that step is simple: call your installer or contact them via their customer portal. That might also be the case if you sign up for a solar loan from a big installer. Oftentimes, the loan comes with a similar kind of protection.
If, however, you went with a different installer, perhaps sourced through a different website, you’re probably stuck looking through the paperwork you got with the system to find the manufacturers of your panels, inverter, or other components.
How to claim the federal tax credit for solar
Claiming the Federal Solar Investment Tax Credit (ITC, for short) is easy, just have your personal assistant fax all the necessary paperwork to your accountant in the Caymans, and wait for your huge refund.
Oh wait, you don't have millions in an offshore account? Then we've got the necessary info for you. The ITC is claimed by filling out a special schedule, Form 5695, and entering the credit amount from that into your 1040 form.
For your edification and convenience, we've prepared a step-by-step guide to claiming the solar tax credit.
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:
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.
What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.
An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.
RPS solar carve out
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.
What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.
Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.
For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!
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.
Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.
The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.
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!
What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.
The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.
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.
Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.
Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.
Solar Incentives in Florida
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 30% of your 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:
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.
How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.
The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.
Florida Solar Power 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 30% tax credit.
About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.
(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)
The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.
Solar Power Performance Payments
Orlando Utilities Commission: $0.05/kWh
Performance Payments are small payments for each kWh a solar system produces. In Florida, there is only one utility company that offers performance payments, but the payment they offer is pretty nice.
The Orlando Utilities Commission will pay customers to produce solar power at the rate of $0.05/kWh. That’s on top of crediting you the retail rate for electricity your system generates—they'll pay you for every kWh, whether you use it to power your home or not. The program runs for 5 years, with automatic renewal for another 5 year term at whatever rate is available.
It won't mean a ton of money each year, but it adds up over time. In our example, your performance payments will mean more $332 in your pocket for at least 5 years, and it actually reduces your system's payback time by a year.
Remember: under this program, the electricity output of your solar power system is used to power your home and you still get paid based on total output, so that couple hundred bucks really is free money – you don’t have to sacrifice any other benefits of your solar power system to collect it.
Sadly that’s the end of the available performance incentives for solar panels in Florida. Again, just a drop in the bucket. Some local utilities offer net metering for a flat price, which could mean a bit of a bonus for you. The best way to figure out whether your utility offers favorable rates is to connect with one of our Florida-based installers on the ground, who know the lay of the land when it comes to solar policy in your area.
Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!
Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.
Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.
We've got a great article if you like to read more about what SRECs are and how to earn them.
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.
About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Some argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing). Other studies seem to indicate a home price premium about equal to the cost of installing the system, minus any incentives like the federal solar tax credit.
For many average-sized solar power systems on a house, that can mean adding $20,000 to your home value. And if you don't believe us, believe the bean counters: Many banks and solar financing companies now offer traditional style equity-based home loans for installing solar. An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!
The availability of a property tax exemption for solar energy was sourced from the Database of State Incentives for Renewables and Energy Efficiency. Grades in this category are basically all-or-nothing. Either you got it or you don't. Thankfully, many states have "got it.".
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.
What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).
The consensus on Florida solar power rebates and incentives
Without a strong RPS or a statewide solar rebate program, Florida’s utilities have little incentive to help you get into solar. Despite the state’s abundance of sun, Florida’s government hasn’t yet seen the benefit of pushing for clean, renewable energy that will produce for years to come. But with a decent overall payback time of 10 years, there is still good reason for Floridians to get into solar. We give the state a C just for solar still being a good investment, even without the policy to help make it an amazing investment.
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!