The Sunshine State has long been a solar energy laggard, trailing such gray-sky locales as Massachusetts and New Jersey. That might be about to change.
Changes in solar business models, federal tax credits and plummeting equipment prices are opening a new market that some believe will bring a sea of sun-absorbing solar panels to Florida.
“It’s the solar tsunami,” said Jim Fenton, director of the University of Central Florida Solar Energy Center. “The waves are on their way.”
Solar has failed to blossom in Florida because it has made little financial sense, thanks to electric rates that are much lower here than up North.
In addition, Tallahassee gives little support to solar, unlike other states that set goals or mandates for renewable energy.
Instead, Florida law hinders development of solar.
Where some states allow solar companies to sell electricity directly to consumers, Florida prohibits the practice. Under Florida’s monopoly system, only utility companies, like Duke Energy and Tampa Electric, can sell electricity to consumers. Solar companies must sell electricity they generate to a utility at wholesale prices, which makes it difficult for them to turn a profit.
It is legal for Floridians to pay to have solar installed on the roof of a home or a business, which will reduce power bills. But solar’s considerable up-front costs — $15,000 on up for a homeowner, $1 million or more for a business such as a Publix supermarket — discourage widespread use of the technology.
“We need innovative technologies as well as leadership,” said Scott McIntyre, president of the Florida Alliance for Renewable Energy. “It’s about making Florida a leader in renewable energy.”
Solar firms think leasing offers a way for potential customers to avoid large up-front costs for new equipment and boost corporate profits — while not running afoul of Florida law.
On the residential front, SolarCity, a national leader in small-scale solar installations, announced its second project in Florida last month with the Del Webb communities in Orlando and Ocala to lease solar panels on new home construction.
SolarCity does not sell the power generated by the panels it puts on the new homes, an arrangement that does not conflict with state law. Instead, the company hopes to profit from the lease payments, while guaranteeing that customers will save money.
Municipalities can already set up their own utilities but face the same problem with up-front costs that homeowners do.
Here, too, leasing can help.
Last month, the city of Winter Park contracted with Cape Canaveral-based Clean Footprint for its own solar array.
The city pays nothing up front and will pay the company a fixed rate for solar for 25 years, just a half-penny above the city’s current lowest-cost power source.
Solar will provide just a small portion of the city’s power needs, at least at first. But the system can be expanded. And it offers the city a hedge against rising power costs for decades.
“It’s no risk and it’s the lowest-cost solar power in the market place,” said Jerry Warren of the city’s utility department. “That savings will definitely benefit our customers.”
“That’s pretty much a game changer,” Fenton said of the lease agreements.