SACE staffer John Wilson also contributed to this post.
Today the Southern Alliance for Clean Energy (SACE) responded to the Florida Public Service Commission’s Request for Comments on policies and programs to “promote solar” in the Sunshine State.
If you’re visiting our blog, you probably know about the Floridians for Solar Choice ballot initiative – which aims to open up the rooftop solar market by allowing solar companies to sell energy directly to homes and businesses. But how many other specific ideas are there for advancing solar power in Florida? In SACE’s comments to the Commission, we laid out almost a dozen ways to grow the solar market in Florida.
Florida has a tremendous potential to deploy solar energy – the state ranks 3rd nationally in rooftop solar potential, and has the best solar resource east of the Mississippi – but has consistently failed to live up to this potential. Today the state has only 239 megawatts (MW) installed, with an additional 383 MW planned over the next three years. This leaves Florida trailing far behind neighboring states Georgia and North Carolina, both of which plan to install almost three times as much solar during the same period, and even New Jersey, which has almost 1,500 MW already on its system.
Florida can do better.
But Florida’s solar potential is constrained because of legal and tax barriers that don’t allow third-party solar providers to sell power to homeowners and businesses – an important driver of rooftop solar development in other states, and what the ballot initiative seeks to address. Moreover, large-scale solar plants have stalled because the Commission has failed to effectively oversee the planning activities of the investor-owned utilities, which have a guaranteed monopoly and therefore do not have to compete for customers. To date, solar energy supply decisions have been left entirely to the discretion of Florida’s utilities, who have displayed little interest in tapping the full suite of benefits to ratepayers and to the grid that solar energy provides.
Thus, the Commission’s Request for Comments appropriately raises the question of how customer demand for solar energy can be fulfilled, and how the decisions that utilities make with respect to investing in solar energy supplies can be more transparent and subject to more effective oversight. We hope this is the beginning of a serious effort to reform utility regulation in Florida. Here are some of the key ideas we and other parties who want to see more solar across Florida are advancing.
How to Promote Solar at Homes and Businesses Across Florida
In its comments to the Commission, SACE recommends a number of policies to promote both rooftop solar and large “utility-scale” solar arrays. SACE supports the removal of onerous taxes on solar energy systems in Florida. Florida’s tangible personal property tax (TPP) is in essence a business tax on non-real estate property. While solar energy developers face similar taxes in other states, nowhere is it nearly so onerous, presenting a major obstacle to solar development in Florida. Due to constitutional constraints, a constitutional amendment may be needed to remedy the impacts of this tax on solar development statewide.
Florida, fortunately, has a good net metering policy, which is the cornerstone of the state’s renewable energy policy for customer-sited solar. But work needs to be done to promote use of net metering. The Interstate Renewable Energy Council (IREC) has identified two key issues that need to be addressed in Florida. The first is interconnection, the process of ensuring that connecting a solar system to the grid will be safe and functional without being overly burdensome to the customer. Florida should adopt model interconnection rules, such as those published by the Federal Energy Regulatory Commission (FERC) or those published by IREC.
In addition, Florida should also allow customers to aggregate meters for purposes of net metering. This is particularly important for businesses that may have several buildings in close proximity, and may wish to install a single solar project to offset some of the load from the entire building group. If the utility has required the customer to use more than one meter for the properties, that should not be an obstacle to net metering the solar against all the electricity used at the business.
How to Promote Solar on the Utility Systems of Florida
As mentioned above, Florida utilities make the key decisions on solar with little or no regulatory oversight, even though they are monopolies and have many of our readers as captive customers. A good example of this is Florida Power and Light’s recent announcement that it would build 223 MW of solar at three locations in southwest Florida. While these projects are a welcome and perhaps long overdue step forward, the costs announced by FPL for the project seem fairly high compared to other projects, such as NextEra’s recent deal with TVA in Alabama. NextEra is, of course, the owner of FPL. Yet this project is moving forward without any required competitive bidding process for the best deal or any review of FPL’s decision by the Commission.
We are recommending that the Commission require FPL to use a competitive bidding process for the 223 MW of solar it wants to develop, including independent project offers. Based on current best practices in the market, SACE estimates that FPL’s current projected cost of $409 million to self-build these projects is 8-15% higher than it would be under competitive bidding.
A solar demonstration project would be a great way to put aside lingering concerns about the impact of solar on the electric grid. Plus, it would be a great way to help ensure that all Florida utilities open up their power project development to independent solar power developers. Thus, we are recommending that the Commission focus such a program on 5 – 20 MW projects, perhaps around 300 MW total, which would allow for at least 15 and potentially several dozen projects to be built on all of the state’s large utility systems.
In some cases, businesses may desire to develop solar power projects and sell the power to the utility. For this reason, federal and state law require utilities to offer standard contracts which provide a simple (if not particularly lucrative) way for businesses to obtain a contract. Florida’s rules for these power sales, however, are among the nation’s most heavily tilted towards the utility. SACE is recommending reforms to this policy to make it more accessible to solar developers in terms of both the rules and the price that the utilities would pay to solar developers. These reforms would result in similar terms to those offered by utilities in most other states.
In addition to changing the rules on standard offers, we are also recommending regulatory reform to ensure that Florida’s large utilities fully consider solar power in the energy planning process (in the past, it has often been virtually ignored). The final recommendation we make – which builds on the previous four recommendations – is for the Commission to reform its rules to include a requirement that utilities use competitive solicitations for solar projects. This would ensure that it isn’t just the utility’s favored projects, but the truly most cost-effective projects that are being built.
The Way Forward
In 2014, Florida ranked 20th nationally for new solar installations, with just 22 megawatts (MW) added; today the state ranks 14th in the country in total installed solar capacity. SACE believes there is a significant and growing opportunity to expand solar development in Florida and bring the state to the forefront of this industry where it belongs, and the Florida Public Service Commission has an important responsibility to facilitate this process in the interest of the state’s ratepayers. We hope it will carefully consider the proposals submitted by SACE and the other groups and businesses that want to see Florida live up to its moniker of the Sunshine State.