Florida has long been one of this country’s most confusing solar battlegrounds. The state has consistently earned some middling ratings in our yearly state solar power rankings reports, barely making the top half of the country despite its abundant solar resources. Seriously, how can the place nicknamed “The Sunshine State” be such a bad place for solar?
The answer, of course, is crony capitalism, by which Florida’s big utility companies have effectively made affordable solar a technologia non grata in the state. Not that solar doesn’t exist in Florida. In fact, anyone with enough money to purchase a solar installation with cash or a loan can get their panels up, get on the grid, and start saving money right away. It’s just that everyone else in the state, who would benefit from a third-party solar agreement like a Power Purchase Agreement (PPA), is out of luck. Florida has long banned third-party solar agreements, effectively killing the most popular way to go solar.
And the utility companies are at it again—this time backing a shadowy group called “Consumers for Smart Solar,” who have recently secured enough signatures to ensure their “Smart Solar” ballot measure will be up for a vote in Florida this November. The group claims the measure, called Amendment 1, “establishes the right to solar in Florida’s constitution,” and “allows state and local governments to continue to protect consumers from fraudulent practices, such as overcharging.”
Sounds good, right? Well, the amendment as proposed will have very little change on how home solar is sold in Florida, and specifically categorizes PPAs as “shady solar,” that “trap(s) customers in contracts with hidden ‘escalator clauses.'”
The assertion that PPAs are by nature “shady” is pretty silly, coming from a group backed by the biggest monopolies this country still condones. The “escalator” clauses the group is so worried about simply means that the price of electricity sold to the PPA holder increases with inflation. The typical increase is 1% per year, which means if you’re paying 11 cents per kilowatt-hour (kWh) now, you’ll be paying 13.4 cents/kWh in 20 years. Even if that rate were doubled, the per-kWh charge at 20 years would be 16.3 cents.
Compare that to the historical rise in electricity prices from utility companies, which from Duke energy in Florida have been as high as 4% per year in the past decade, and you can see that the “escalator clauses” can actually out-compete rates from the utility company, and when they don’t, they’re simply designed to keep up with inflation.
Of course no PPA will be as financially sounds as a simple money-down purchase of a solar system. See for yourself how the returns of a PPA stack up against other solar investments in Florida:
For our estimates, we use 3.5% as the annual rate of electric price increase, and a 2.5% annual increase in the price of electricity under the PPA (represented by the blue bars above). For the first year, the savings are small—just $96, but they grow over time. By year 20, you’d be saving $410 over buying electricity from the utility company. The total savings for a PPA over 20 years under this model is $4,618.
Why this matters
This is about more than saving money—it’s about the right to choose rooftop solar over dirty electricity from the utility monopolies. For people who can’t afford $20,000 for a solar panel system, a PPA may be the only choice they have to get solar. Without choice, they’ll be stuck with the status quo.
If you live in Florida, vote NO on the Smart Solar amendment on this year’s ballot. Instead, demand that the state put into place sensible rules to promote competition from solar installers who know how to keep costs low for consumers, all while expanding solar to rooftops all over the country, reducing carbon emissions and helping strengthen the electric grid for all of us.
Last modified: March 4, 2019