Thinking about getting rooftop solar? You’d better hurry

A new array of solar panels on a South Florida home. The state Legislature has passed a bill that will reduced the rate at which FPL buys electricity back from rooftop solar users.

By Ron Hurtibise | rhurtibise@sunsentinel.com | South Florida Sun Sentinel

PUBLISHED: March 15, 2022 at 6:00 AM EDT | UPDATED: March 15, 2022 at 2:59 PM EDT

Consumers who have been considering installing a rooftop solar system now have a reason to make a decision.

A legislative bill reducing buy-back rates that investor-owned utilities must pay for solar power sent back to the grid now awaits the governor's signature.

If enacted, all 101,471 existing rooftop solar owners in Florida — and those building a system through December 31, 2023 — will have 20 years to enjoy full retail credit for the excess power they send back to the grid. That "grandfather" clause would also apply to consumers who install solar before January 1, 2024.

After failing to stop the bill, which was written and promoted with help from Florida Power & Light, the state's largest utility, advocates for solar and green energy now hope to persuade Gov. DeSantis to veto it.

"If he's looking at the polling data, then yes, he should," says Kate Chiles Ottenweller, southeast director for California-based advocacy group Vote Solar. The current policy of requiring utilities to pay full retail rates for excess power they buy from rooftop solar owners, she said, "is an incredibly popular policy across the political spectrum."

Will Giese, southeast Florida director of the trade group Solar Energy Industries Association, said he hopes DeSantis vetoes the bill. "Otherwise, he's choosing monopoly utilities over a thriving and growing solar economy in the state," Giese said.

But legislators supporting the bill agreed with FPL's argument that 4.6 million of its residential customers are unfairly subsidizing the cost of keeping 31,700 connected to the grid. An FPL spokesman told the South Florida Sun Sentinel in February that solar customers are avoiding $90 in monthly costs that non-solar customers pay on their behalf.

The utility projected that statewide annual subsidies of solar users within its customer base would increase from $30 million a year in 2021 to $80 million a year in 2025 as more of its customers install solar systems.

Solar advocates disagreed, saying that rooftop solar owners actually save utilities money by reducing the need to expand generating capacity.

With their argument all but lost, solar proponents say they are at least happy with compromises forged by legislators that create a glide path that gradually decreases buy-back rates through 2028 and locks them in for those customers for 20 years.

After 2028, the Public Service Commission would have to develop a rate structure that would require new solar consumers to pay full retail rates for electricity they buy, but limit buy-back credits to the wholesale rates that utilities would otherwise pay to generate electricity. For FPL customers, that wholesale rate is less than half of the current 12-cent retail rate.

Here's the glide path that legislators added to the bill. Each rate would remain in effect for 20 years:

Owners of rooftop solar systems installed in Florida before January 1, 2024 must pay retail rates for electricity purchased from investor-owned utilities and those utilities must credit those customers' next months' bills the full retail rate of excess energy those customers send back to the grid.

For systems installed between January 1, 2024 and December 31, 2025, owners will be credited at 75% of the full retail rate.

For systems installed between January 1, 2026 and December 31, 2026, owners will be credited at 60% of the full retail rate.

For systems installed between January 1, 2027 and December 31, 2028, owners will be credited at 50% of the full retail rate.

Utilities, however, are allowed to petition the Public Service Commission at any time after January 1, 2024, according to a legislative analysis of the bill, to impose "any combination of fixed charges, including base facilities charges, electric grid access fees, or monthly minimum bills" to ensure that the utility recovers the fixed costs of keeping solar customers on the grid "and that the general body of ratepayers does not subsidize customer-owned or leased generation."

And the bill also allows utilities to petition the Public Service Commission to move up the scheduled January 1, 2029 net metering expiration date if a utility expects total solar generation among its ratepayer base to reach 6.5%. Less that 1% of FPL customers have rooftop solar systems.

Rooftop solar owners and their lobbyists attended numerous committee hearings during the legislative session warning that the bill, if enacted, would destroy Florida's emerging residential solar industry.

How it will affect solar industry providers remains to be seen, advocates said in interviews.

Over the next year and a half, the bill could provide a boost to the industry if it compels homeowners who have been thinking about solar to make the leap.

"I think it's reasonable to expect a rush from customers who have been thinking, 'don't do it,' to go ahead and install while the full credits are in place," said George Cavros, Florida director and energy policy attorney for the Southern Alliance for Clean Energy.

After that, the question becomes how strong demand for solar systems will remain as electricity buy-back rates decline through the rest of the decade.

And that answer depends on whether rooftop solar installations can continue to save consumers enough money to offset the cost of purchase and installation.

One possibility is that storage battery costs continue to fall, enabling consumers to keep most of what they generate without having to sell it back to their utilities. Benefits of this arrangement would depend on how much utilities will be allowed to charge for access to the grid.

The second possibility is that a package of infrastructure bills proposed by the Biden Administration will increase and extend the current 26% federal tax credit for rooftop solar systems.

Also, prices of solar systems could continue to fall. They're now about 70% less than they were a few years ago.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at rhurtibise@sunsentinel.com.