A debate over how to brighten solar power’s future in Florida

Simon Rose sits on his solar panel covered roof with his girlfriend Jody Finver in his North Coconut Grove neighborhood on Thursday, November 19, 2015.
Simon Rose sits on his solar panel covered roof with his girlfriend Jody Finver in his North Coconut Grove neighborhood on Thursday, November 19, 2015. MIAMI HERALD STAFF

When Simon Rose looks around his North Grove neighborhood, a Miami enclave of manicured lawns where meticulously renovated older homes mix with newly constructed mini mansions, he doesn’t see a swanky neighborhood. He sees a power grid fueled by rooftop solar panels.

So in September, after his became the third house in a year to install panels, he and his girlfriend, Jody Finver, posted a challenge on a neighborhood chat board: Beat “net zero,” solar-speak for producing more than you use. Win a bottle of wine.

“It’s this little game,” he said. “It’s called the Prius effect.”

Like the early days of the boxy electric car, solar today serves as a conspicuous badge of conservation. But unlike the Prius, solar remains an option largely for the well-to-do. Systems can still cost upwards of $30,000, despite a surge in Chinese manufacturing that cut the price of panels by about 80 percent. In places like the affluent North Grove, Coral Gables or Palmetto Bay, installing panels still means homeowners cover hefty upfront costs or use financing tied to home ownership.

For businesses, solar, too, is something of a perk, where making a statement can matter more than the bottom line. Solar panels at Ikea’s Sweetwater store fit with the brand’s national “solar presence” despite hurdles in Florida. At the University of Miami, a wealthy benefactor insisted rooftop panels power the new Patricia Louise Frost Music Studios, regardless of price.

“For now, solar doesn’t make much sense for a nonprofit educational organization because the payback on this is pretty long,” said Teddy Lhoutellier, UM’s sustainability manager.

So where does that leave Joe Citizen? Two dueling referendums fighting to get before voters in November could decide how residents of the sunshine state use its most reliable resource.

One — backed by an odd mix of environmentalists, conservatives and libertarians — wants to open up the state to solar companies by over-riding a law that lets only the state’s four major utilities sell electricity. Florida is one of only four states that still have the law, effectively locking out the fast-growing solar industry by blocking lease options used in other states to get around upfront costs.

The other proposed amendment, backed by utilities, would leave the law in place while adding a clause that lets utilities levy charges to ensure regular users don’t “subsidize” solar users who hop back onto the grid.

The real solution — and the future of the nation’s last, biggest untapped solar market — probably sits somewhere between the two extremes, energy experts say.

“If the ballot action doesn’t pass, then clearly Florida will be a state that has hamstrung itself. … You’re shutting down innovation,” said Francis O’Sullivan, director of research and analysis at the MIT Energy Initiative. But cutting utilities out of the equation also is a mistake, he said.

What would make more sense is to come up with a more equitable way to compensate homeowners for the electricity they return to the grid, and for utilities to accept that solar — which grew by 123 percent in the second quarter of 2015 — is going to take a bigger bite out of the market, he said.

“Depending on which side of the debate you stand, that’s either a very reasonable argument, or not that good an idea,” O’Sullivan said.

In Rose’s neighborhood, solar spread not so much by necessity as philosophy.

Two years after he moved into his house in 2002, a one-story ’50s ranch with twin bay windows surrounded by a garden of bamboo and palms, Rose installed a solar water heater. Rose had powered his previous house in Denver, where he worked with the Rocky Mountain Institute on energy efficiency, with solar panels and planned on adding them to his Miami house because he wanted “to go to my grave feeling like I did my bit to not leave a big footprint behind.”

But Rose, who is semi-retired and gets around town on his bicycle, first wanted to cut his consumption to make the panels practical.

“I was just winnowing away at this monthly consumption down to where it could really make a big dent,” he said.

Then one day last fall he noticed panels going up on his neighbor’s house. For Lee Stone, the decision was more pragmatic. Over the years, he chipped away at his electric bill by connecting to the local gas line and replacing his water heater, stove and dryer with gas appliances. He installed an AC with an energy-efficient compressor. But solar still had too many unknowns: Would the savings in electricity offset insurance, installation, interest and other costs? Were the cheaper panels really as durable? What finally convinced him was FPL.

“They were investing in it to sell to me and if they were investing in it, it made it viable,” he said.

Solar options became an especially hot topic among neighbors after they learned FPL planned to string high-voltage transmission lines on 100-foot tall poles along U.S. 1 just west of the neighborhood and south to Cutler Bay.

“All of a sudden, everyone on U.S. 1 was thinking about electricity and electricity transportation,” he said.

The debate over the future of solar in Florida is at once simple and complicated. On the easy side: consumers’ choice.

“Fundamentally, Next Era and FPL want to build more power plants because that’s how they make more money,” said Yann Brandt, who heads the Americas division of Conergy, a global solar company headquartered in Germany that provides financing and installation for mostly large-scale solar projects. The company moved its Americas headquarters from Denver to Miami in July after an Aventura-based hedge fund purchased the company.

“It’s taking away my freedom to choose the type of energy I want and creating an anti-competitive environment that we’ve seen fail in almost every state across the country,” he said.

But FPL president Eric Silagy said that choice can come with a cost because utilities can provide solar energy more cheaply.

“We love solar,” he said. “But you need economics of scale.”

What also complicates the debate is who pays to maintain the energy grid — a network of hurricane-resistant poles, lines, breakers, transformers and substations — which everyone still needs.

Under a current policy called “net-metering,” FPL’s 3,000 or so solar customers — out of 4.8 million — now get a dollar-for-dollar exchange for the solar electricity they produce. That means they essentially get paid the same as the power plant. But Silagy says that number does not cover costs — employee health insurance, truck maintenance and all the infrastructure — needed to run a massive utility.

“I’m paying you as if you’re providing me with the whole portfolio of services,” Silagy said. “Because I’m buying it back from a home, I’m now not producing it at the electrical plant where I can produce it at a third of the cost.”

A better plan, he said, would be to let the utility incorporate solar farms into its portfolio — FPL now generates about 110 megawatts (a megawatt equals 1,000 kilowatts) and this year announced plans to install panels at three locations to increase production by 225 megawatts — and produce it at a far lower cost. FPL’s parent company, Next Era, is already the biggest producer of wind and solar energy in North America.

“This is not something we’re embracing because it’s suddenly become popular in the mainstream media. We believe it makes sense now, as panel prices come down and we have the ability to purchase it on a much bigger scale, that community-scale solar makes sense,” he said.

Rooftop solar advocates say what FPL is really trying to protect are profits without weighing the benefits that solar customers provide by lowering demand on the grid and helping stabilize it by providing electricity from multiple points. A boom in solar might also reduce the need for new power plants, they say, including two controversial reactors proposed for Turkey Point. This month, amid thousands of comments objecting to the reactors, federal regulators decided to go back and take another look at environmental impacts.

“Utilities want to build big projects that they own and control,” said Susan Glickman, Florida Director of the Southern Alliance for Clean Energy. “It’s all infrastructure and pipeline.”

But Silagy said its unfair to ask FPL and its non-solar customers to pay to maintain a grid that new solar providers would need to make rooftop systems viable.

“I want to be smart about it and I want our customers to be able to afford it. And if they choose on their own, that’s fine. But I don’t think it’s fair to ask everyone else who chooses not to, to subsidize them,” he said. “The grid is not static. We’re investing in it all the time.”

In the meantime — for those who can afford it — installation is becoming increasingly easy as local governments embrace solar. Coral Gables has waived permitting fees, and Surfside, where Mayor Daniel Dietch this year became the first homeowner with permitted panels on his roof, is working to improve the process.

“Now that I’ve gone through the pain of the permitting process, we need to make it more straightforward,” said Dietch, who also financed his panels through his city’s PACE (property assessed clean energy) district. In 2008, Florida authorized the districts as a way to encourage energy retrofits attached to a homeowner’s tax bill. Twenty cities in Miami-Dade and three in Broward now allow financing through the company Ygrene.

To install his homes’s 38 panels, Dietch turned to Ygrene’s certified contractor, Raul Vergara, owner of Cutler Bay Solar Solutions.

Unlike the big out-of-state solar companies that critics have said will prey on the state if solar laws are changed, Vergara is a local guy who grew up in South Florida. He spent 12 years managing a Publix and logged another 14 years managing a Bed, Bath & Beyond before he decided that the decreasing costs of panels and the expanding PACE districts made solar a viable business. In 2013, he opened the company with six employees and quickly grew to 18. Last year, he completed 42 installations. This year, he’s on track to finish 100.

Even under current law, Vergara says solar is affordable. For most homes, he says he can meet 80 percent or more of a home’s energy needs.

“My average electric bill is $8.67 in a 3,200-square-foot house,” he said.

When Vergara visits a house, his approach is simple. First determine whether solar is a good option. Is the roof positioned correctly and more importantly, does the homeowner’s lifestyle fit solar? At one North Grove house, he installed more than 65 panels to power the homeowners’ two Teslas. He can usually do an installation for $3.50 a watt, putting most installations at about $30,000.

“It’s totally based on the consumption of the house,” he said.

But that drop can vary depending on the panels. With his energy diet, Rose dropped his bill to $13 in September. In October he banked 22 kilowatt hours. After Sallye Jude, a well known preservationist who restored the old Miami River Inn, installed two dozen panels on her Normandy Village townhouse in Coral Gables, she found her electric bill in the winter dropped to $10 a month. But when temperatures soar in the summer, it can climb back to about $100 a month, in part because her roof size limited the number of panels she could install.

“Solar was one of the first choices we made and it was an easy one,” said Jude, who used a solar water heater at her former bayside home for 52 years. “Early on, people had them on their roofs. It was evidently thought of as a smart thing.”

Another factor that could change the equation is batteries. Rose is already thinking about the day Tesla releases its new residential battery and “people all over Miami are their own little power production places.”

Around the corner from Rose, Carol Kelly, a Miami-Dade County judge, is considering becoming the fifth neighbor to go solar. She isn’t looking to make a statement and doesn’t even consider herself much of a conservationist.

“I definitely turn the lights off, but I definitely like a cool house,” she said.

What struck her is how practical solar has become.

“I thought wow, that’s really amazing that you could run an entire house with two adults and not have an electric bill,” she said. “If it works, you can’t go wrong because not only is it better for the environment, but it’s better for your pocketbook.”