Guide to net metering in Florida - 2023 update
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Net metering is one of the most important ways solar panels save you money. The idea is simple: when your panels produce more energy than your house needs, the excess power is sent to the grid, earning you equal credit toward energy you use later. Unfortunately, the reality is often more complicated.
There are nuances within net metering that define who has access, how much credit the excess solar energy is worth, and how long solar owners have to use it. There are also attacks on net metering from utility companies, who claim that solar customers don’t deserve full credit for their excess energy but instead should be paid something closer to wholesale rates.
The article below discusses net metering in Florida. It covers who can get it, how it works, and the various rules that apply to solar owners. But first, there’s something you need to know. Net metering was recently under threat in Florida from a bill that passed in the state legislature, but it was ultimately vetoed by the Governor.
Florida House Bill 741 would have stripped net metering from homeowners and businesses who go solar starting in 2024. This move would have made rooftop solar uneconomical for everyone and would have killed the state’s solar industry. Thankfully, this attempt to kill solar failed, but there will undoubtedly be another.
Read below to find out how Florida net metering works and why it’s so important.
Florida’s current net metering rules were enacted in 2008 by the Florida Public Service Commission (PSC). These rules provide a fairly good version of net metering, but there are some important things to know.
First, the state’s net metering law only applies to Investor Owned Utilities (IOUs). Customers of these four companies are covered:
The IOUs cover about 79% of Floridians. The remainder are covered by municipal electric companies or rural electric co-ops, and some of these have enacted their own form of net metering (details below).
In Florida, homeowners cannot get credit for more electricity than they used from the grid in a given month, but extra credit does roll over to the next month’s bill at the full retail rate.
At the end of each calendar year, any leftover credits are paid to the solar owner at a lower rate based on the utility’s wholesale energy cost—generally around 3 to 4 cents per kilowatt-hour.
Florida’s interconnection guidelines—which govern how solar systems can be hooked into the grid—separate solar systems into different “tiers” based on size in kilowatts (kW):
Florida offers streamlined permitting and inspection for Tier 1 systems, has no insurance requirement, and charges no application fee for connecting them to the electric grid. Tier 2 systems are subject to an additional application fee (depending on the utility) and also come with the requirement that the homeowner purchase up to $1,000.000 in liability insurance.
These fees and insurance requirements do make larger systems somewhat more expensive in Florida, but they do not make an investment in solar much less economical.
Community solar is a newer concept that helps people who can’t install solar panels (whether due to an imperfect roof or if they’re renters) get some of the savings benefits that come with solar.
Rather than being installed on a home, a community solar installation is a subscription-based large-scale solar system that allows individuals to receive a portion of the energy output from the system that’s roughly equal to their annual usage. The subscription offsets their energy bill, and usually costs a little bit less than they would have paid without solar.
Unfortunately, there is nothing in Florida law that allows for a community solar program. However, some of the state’s IOUs have developed their own programs that are sort of like community solar.
Without a good community solar law to require the utility companies in Florida to offer actual savings to their customers, the IOUs will continue to expand upon their hundreds of megawatts of solar farms and charge whatever they can get the PSC to allow for the energy.
In addition to the four IOUs, some of the biggest municipal and rural co-op utilities offer something similar to a net metering program. Here’s a quick rundown of what’s available:
We can’t run through the programs (or lack thereof) from all 57 Florida utilities, but the ten listed in the sections above cover roughly 95% of Florida’s population. If you’re interested in whether your municipal or rural electric utility offers a plan like this, the best bet is to call them and ask, or request solar quotes from companies in your area, who are experts at dealing with the local utilities.
The short answer to the question posed in this heading is “not yet”. There was a threat to net metering in Florida from a bill that passed through both houses of the Florida legislature, but was vetoed by Governor DeSantis on April 27th, 2022.
Despite the fact that customer-sited solar installations account for just 0.16% of all electricity sold in the state (as of 2020), lawmakers in Tallahassee decided it was time to dismantle the state’s net metering program. In November 2021, Senator Jennifer Bradley introduced SB 1024 (later joined by its companion HB 741 in the House), which would have directed the PSC to write new rules for how solar owners are compensated by the state’s utility companies for excess solar energy.
In the final version of the bill that was sent to the governor’s desk, homeowners whose solar installations would have been placed into service after December 31, 2023, would no longer receive net metering credits.
In addition to the reduction in compensation for excess energy, the PSC would have been allowed to consider rate schedules that include increased “fixed charges, including base facilities charges, electric grid access fees, or monthly minimum bills” in order to make solar owners pay more than non-solar owners.
Lawmakers claimed that net metering represents a “cost-shift” from solar owners to all other (non-solar) ratepayers. They claimed that earning retail-rate credits for excess solar kWh allows solar owners to avoid paying their fair share for costs associated with maintaining the grid that everyone uses.
This argument is false. Solar, in fact, provides benefits both to the grid by reducing expensive new projects, and to society through jobs, economic growth, and carbon reduction.
In a review of distributed solar cost/benefit analyses sponsored by the U.S Department of Energy, researchers found that seven out of 14 analyses discovered that rooftop solar was a net benefit to the grid, while only two analyses found that it represented a cost-shift. The other five studies provided frameworks to study the costs and benefits, but made no determination. Importantly, none of the studies looked at all possible ways distributed solar benefits the grid and society.
But there’s another, easier way to tell why this bill was proposed and who stands to gain from it. FPL actually wrote the bill that became SB 1024, and delivered it to Senator Jennifer Bradley, along with a $10,000 donation two days later. This was likely inspired by the NEM 3.0 fight in California, where the Public Utilities Commission has proposed a “net billing” scheme that would similarly destroy the state’s rooftop solar industry.
Of course FPL wants to kill rooftop solar in Florida—it would much prefer to be the only game in town when it comes to renewable energy. FPL owns huge solar generation sites and loves that it can keep increasing rates, even though operating existing solar facilities cost it almost nothing.
We know the proposed bill would have killed the solar industry: shortly after its passage, we conducted a survey of thousands of Florida homeowners who had previously expressed interest in solar. Of the people who responded, 93% said they would no longer consider solar for their home if HB 741 were to pass.
Governor DeSantis ultimately decided to veto HB 741, but it was thousands and thousands of committed Floridians who stopped the bill. They offered public comments at hearings, sent their representatives countless letters and emails, and made their voices heard in op-ed columns and social media.
You can join the fight to protect solar for the future. No matter who you are or why you love solar, there is a group in Florida for you. Citizens should check out Floridians for Solar Choice and VoteSolar, while people in the solar industry should join FlaSEIA. Strong industry groups are the very best way for us to fight back against entrenched utility interests.
Going back to basics here: net metering exists in Florida today, and helps homeowners save money. Paired with incentives like the federal solar tax credit, the time it takes solar panels to pay back their cost averages around 10 years of their 25- to 30-year life.
We know that FPL and other utility companies will do everything they can to kill home solar power, but they haven’t done it yet. That makes now the best time to go solar, before the next attack on solar makes it a much less appealing financial investment.