Florida Net Metering Incentives
Net metering incentives often make or break residential solar. Knowing the net metering incentives in your state and what policies might change them in the future gives power to the people.
While Florida has a lot of sunshine, the impact of the net metering policy still plays a role in the affordability of residential solar. Let’s look at net metering and how it works.
How Florida Net Metering Works
Net metering allows customers with residential solar to put their excess solar generation on the power grid. In return, the utility credits them for the power put onto the grid.
Customers use these credits to offset their electricity use on the days they don’t produce as much electricity and at night when the sun isn’t out. A good net metering policy will allow the customer to cover the majority of their electricity usage without needing to produce more than they use throughout the year.
Ideally, the utility’s net metering program will offer a one-to-one ratio to the customer, but sometimes this ratio is a bit skewed. These skewed ratios often mean the customer receives less for the power they put on the grid than they pay to pull it off. While a slightly skewed ratio won’t break the bank, the less a utility pays for customer-generated power, the less beneficial net metering becomes.
Who Offers Net Metering in Florida
Like most states, Florida has a mixture of utility company options. However, which ones are options for you depends on where you live.
Florida has five investor-owned utilities, 34 municipal electric companies and 18 rural electric cooperatives. Each has different solar policies, but this post will cover Florida’s two main utility providers. These include Florida Power and Light and Duke Energy.
Florida Power and Light Net Metering Policy
Florida Power and Light (FPL) covers most of Florida and offers net metering to its customers. The size of the solar system determines the customer net metering plan.
FPL has the highest application fees for tier 2 and 3 systems. However, typically residential solar falls into tier 1, which doesn’t have an application fee and equals anything less than 10 kW of alternating current.
Florida requires all net-metered customers to receive retail rate compensation. FPL credits any excess solar generation to the following month’s electricity bill and pays the average annual cost of generation for any credits left at the end of the year.
While Florida caps each solar at 2 MW, it doesn’t have a utility cap. That said, FPL does require that customers don’t produce more than 115 percent of their typical yearly usage.
Florida Duke Energy and Net Metering
Florida is one of six different states that Duke Energy serves. Duke Energy Florida has a three-tiered system for solar systems up to 2,000 kW, with tier one systems generating anything less than 10 kW.
All Duke Energy Florida customers have a $30 minimum monthly bill. Duke Energy credits any excess credits at the end of the month to the next billing cycle.
Any unused net metering credits at the end of the year get cashed out at the wholesale rate. The Duke Energy Florida wholesale rate for 2020 was 1.986 ¢/kWh.
Like FPL, Duke does not have an application fee for systems under 10 kW. It also doesn’t require proof of insurance or a disconnect switch for systems in the first tier.
Net Metering Politics in Florida
The struggle to protect solar policies is an ongoing process. Customers have to keep their eyes open and fight for what they believe in, or it might go away. Flordia is a prime example.
Proposed Bill Ment to Lower Solar Net Metering Compensation
On November 22, 2021, Florida Senator Jennifer Bradley filled SB 1024. This bill, if implemented, will change the current net metering system in Florida, so it accounts for the cost shift of solar customers. The cost-shift argument suggests that solar customers don’t pay their fair share of grid maintenance costs because they don’t pull as much or any electricity off the grid.
If enacted, it will call on the Florida Public Service Commission to set up a new net metering program by January 1, 2023. This new program, among other things, would rely heavily on the avoided cost rate instead of the one-to-one credit that customers currently have throughout the year and the payout at the end of the year.
What is the Avoided Cost Rate for Florida Net Metering?
The avoided cost rate, often included in net billing, is the amount the utility avoids paying by not producing the electricity the customer puts onto the grid. This rate varies by state and utility, but it is generally less than the retail rate the utility charges customers.
What You Can Do
If this bill goes into effect, current solar customers will keep their current rate for the next ten years. However, everyone else that can’t get solar yet will earn less for their generated electricity, decreasing solar savings.
Those who can’t get solar now can let Florida legislators know that they aren’t alright with this net metering change. Those who can install solar now should while the current net metering system is in place. However, if they value the future of solar, they should also let their Florida representatives know that they don’t approve of SB 1024.