Florida bill could obliterate the state’s up-and-coming solar industry

As the Sunshine State, Florida might seem like it would be a leader in rooftop solar, but it’s taken years for the industry to make incremental progress in the state. Now a new bill threatens to upend that upward trajectory altogether.

Florida Republican legislators have proposed legislation that could threaten net metering — the policy under which utilities pay rooftop-solar owners the retail rate for excess power they produce — and thereby make going solar a lot less appealing to residential customers.

The Senate bill directs the state’s Public Service Commission to create a new net-metering rule that would require customers with renewable generation systems to ​“pay the full cost of electric service” and not be ​“subsidized by the general body of ratepayers.” It would also require any energy delivered by a customer’s solar system to the power grid to be credited at a price that would be below the retail rates. Revised net-metering billing could also include fixed charges, monthly minimum bills or electric grid access fees, all factors that would drive up the cost of solar for customers.

There is one saving grace: Those who own or lease systems in service before the effective date of the bill, and in some cases much longer, would still be able to use existing net-metering rules for the next 20 years.

If the bill’s wording sounds like it’s tailored exactly to the demands of the state’s utility companies, that’s because it largely is. The text was given to legislators by the country’s largest power company, Florida Power & Light, according to Miami Herald reporting. The sponsors of the Senate bill and its House companion, as well as representatives for FP&L, were contacted multiple times for this story — no one was made available for comment.

The controversy unfolding in Florida is being matched in states across the country. Utilities have long opposed solar net metering, which reduces the amount of money they collect from customers who generate more electricity than they consume. Solar groups, consumer advocates and clean-energy proponents argue that rooftop solar is an important tool for combating climate change and should be encouraged with policies that make it economically attractive to as many people as possible.

The ongoing battle between Florida’s utilities and solar

This is not the first time that Florida’s utilities have made a major play to dismantle customer-owned solar in the state. That occurred in 2016 with the proposal of Amendment 1, the controversial ballot initiative that would have inscribed in Florida’s constitution the ability for state and local governments to ​“ensure customers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do.” Essentially, it would have codified a backbone on which to build a case against net metering.

The current proposed legislation is nearing the governor’s desk. The House approved the measure 83-31 on Wednesday and its companion has passed multiple Senate committees. Florida’s current legislative session ends in less than two weeks.

Much of the debate centers on how much net-metered energy credits should be reduced. The bill initially called for customer credits to be immediately decreased to a utility’s full avoided cost for energy, which is well below the retail rates that customers pay. More recent versions have proposed a more gradual reduction in value over the next several years.

But not all legislators are convinced of the need for reducing net-metering value at this time. Republican State Senator Jeff Brandes, who has supported easing certain solar barriers in the past, doesn’t feel that the subsidy argument has been thoroughly proven. Solar hasn’t achieved enough market penetration for that to be true. As of 2020, less than 1 percent of Florida’s 10.5 million electric customers had any kind of renewable energy technology.

“I don’t think it’s a valid argument yet,” Brandes said. ​“If solar was 10 percent of the market, then it might be a valid argument. I think the power companies are trying to get ahead of the game.”

Florida still lags behind other states when it comes to rooftop solar. In 2018, Florida ranked 26^th based on its percentage of rooftop solar as part of total energy generation.

But even the states with the fastest-growing rooftop solar markets, such as Hawaii, California, Arizona and Nevada, have seen significant and controversial changes in net-metering policy over the past half-decade. That’s been largely driven by the fact that the number of net-metered customers in those states has grown large enough to potentially cause some of the revenue and cost imbalances that utilities say the policy can create.

These interventions have ranged from reducing or limiting the value of solar power fed back to the grid, as Hawaii has done, to adding fixed charges to customers’ monthly bills, as Arizona has done. California regulators are now contemplating a new net-metering regime that would make both of those changes, drawing fierce opposition from rooftop solar advocates who warn it could decimate the value of rooftop solar.

Florida was just gearing up for a new era of growth in the rooftop solar market. The state added the most new solar jobs in the U.S. in 2019, representing more than 12,000 total employees. Roughly 62% more residential solar was installed in 2019 versus the previous year. And Florida was primed to experience some of the highest levels of solar growth in the country over the next five years.

How net metering has helped Floridians

Net metering is a big part of the reason for that growth. In 2013, there were only 1,400 installs of residential solar systems in Florida, according to Justin Vandenbroeck, president of the Florida Solar Energy Industries Association. By 2020, that number multiplied to 31,000 installs. The current average payback period for a residential solar system in the state is about 11 years. Without net metering, that would go up to 17 years.

These numbers matter to the everyday Floridians who have rooftop solar. Almost 70 percent of net-metering customers with Florida Power & Light have a household income of more than $50,000, but only 34 percent have a household income of more than $100,000, according to numbers reported by FPL. The average age of a net-metering FPL customer is 54. The majority of Florida’s solar market is financed through loans, according to Vandenbroeck.

“It’s not like people are getting rich off solar,” he said. ​“They’re just stabilizing their electricity costs. Any modification to net metering today would be detrimental to our industry.”

By getting rid of net metering this early in the game, to borrow Brandes’ analogy, the utilities are effectively trying to end Florida’s solar progress before it has begun.

It’s not just the industry that will stand to suffer. It’s the Florida consumers who have already placed solar on their roofs, expecting the investment to continue to pay off, as well as the ones who might want to do so in the future. A February survey from consumer review site SolarReviews polled 254 Florida homeowners. Roughly 74% of respondents said they would no longer consider going solar if net-metering customers were paid at the avoided-cost rate versus the retail rate.

Sarasota resident Robert Gregory installed a 10-kilowatt system on his house 10 years ago. He was convinced to go solar largely by the financial savings he stood to gain.

When he first installed the system, he initially produced enough through net metering to have two or three months with no electricity bill. Now, he averages about $55 for a bill in the summer — roughly a quarter of what nearby comparable houses pay. But he worries about what might happen if net metering is taken off the table.

“My bill is probably going to go back up to well over $100 if they start discounting my credits,” Gregory said. ​“I won’t appreciate that.”

Sarasota-based solar installer Bill Johnson, who owns Brilliant Harvest and serves on the board of Florida SEIA, is already seeing an impact from the proposed legislation on his potential customer base. At a recent meeting with representatives of a large company wanting to equip ​“hundreds of buildings” with solar, they told him that they wanted to wait for the legislation to play out before making any decisions.

“Just the idea of a potential threat has already slowed down business,” Johnson said.

Florida SEIA’s leaders have already gone into overdrive mode. They’ve scheduled meetings with almost 100 legislators and are working on communicating the adverse effects this bill could have, says Vandenbroeck. The main focus of their message? Think of all the jobs Florida would lose.

“A lot of legislators are generally interested in the story that the rooftop solar market has to offer to the state,” he said. ​“I think a lot of legislators are very sensitive to the implications that this legislation could have on jobs in the state of Florida. No doubt that is the biggest concern.”

Johnson doesn’t mince words. The end of net metering would be a ​“job-killer,” he says.

“This is an industry that pays good wages with highly skilled jobs that are in demand all over the world,” Johnson said. ​“There is an opportunity here that we are ignoring.”

Who owns Florida’s solar?

Solar advocacy groups like Solar United Neighbors, which organizes residential co-ops across the state for homeowners interested in going solar, have been on red alert since word of the potential bill first came out in the fall.

“It’s not a solar issue,” said Heaven Campbell, SUN’s Florida program director. ​“We are not going to see solar disappear. We are going to continue to see solar grow extremely fast, like it has for the last couple of years, in the utility-scale sector. This is an equity issue. It’s about who owns all the solar in Florida.”

Floridians are already deprived of some of the standard benefits that come with residential solar in other states, according to Campbell.

“Net metering is the only thing that we have,” she said. ​“If we were to roll that back, we need to change the state’s slogan from the Sunshine State. We’re the dark place.”

But legislators like Brandes are still skeptical of whether this bill will pass in its current state. He acknowledges that there are certain points at which net metering should be reevaluated, but he doesn’t believe that it’s a ​“one-size-fits-all” solution.

“I think ultimately we’re going to find a pathway forward that is reasonable,” he said. ​“Bills often start out as unreasonable and move toward reasonable.”

Industry leaders like Vandenbroeck are ​“cautiously optimistic” from the conversations they’ve had with legislators. But they still remain prepared for a fight.

“I don’t want to underestimate the implications of this bill,” Vandenbroeck said. ​“I’m cautiously optimistic that we’ll come to a solution that makes sense for the long term, but I’ll say that the stakes couldn’t be higher.”

For Johnson, the stunning impact this could have is clear: It could mean the end of his business.

“If the bill were to pass anything like in its current form, we would seriously have to question if we would be able to stay in business,” he said.

What could happen, at least according to Brandes, is a solution that hits somewhere in the middle: imposing a fee on solar customers if they are connected to the grid.

“We’ve got to get it right,” Brandes said. ​“Clearly, there’s a cost that has to be recovered by power companies for the guarantee that when you turn on that light switch, there’s going to be power, whether or not the sun is shining.”