Florida Bill “a Gun to the Head” of Rooftop Solar

March 25, 2022

There are versions of this story happening all over the country.

In the last decade, Utilities have on the whole, come around strongly in support of renewable energy, in particular the large wind and solar projects that they can roll into their rate base and profit from directly. Lately we’ve been seeing them push back on smaller systems, that home, business, or farm owners might put on their own roofs, or grounds.

There are usually formulas by which smaller solar generators get compensated for electricity they generate and put back on the grid. From the homeowner’s perspective, they want to get compensated at a rate near to the rate that they themselves would pay for the electricity they buy, the “retail rate”.
Utilities would rather compensate, if at all, with the “wholesale rate” which is quite a bit lower. In the case below, in Florida, if I understand correctly, there is currently a “credit” system that goes directly to the customer’s bill.
(Experts, I know you’re out there, so set me straight on the details here if necessary)

The basic argument utilities make is that, since they provide the grid that smaller users will need at night or on cloudy days, they should not have to pay small producers as generously. In some cases, they advocate for a regular additional charge for solar owners, which can sometimes be considerable.

It’s a big fight that goes right to the heart of what most people think of when they consider solar energy, and it can lead to a lot of anger against the utilities and what they are finally doing that’s right. The truth is, we need both big and small scale clean energy.
A broader solution might be a more fundamental change in the way that utilities are paid.
A lot of smart people believe that utilities should be less in the business of generating power, so much as maintaining the grid and distributing power from a large number of different generators, big and small.
They are after all, monopolies created by the state for our benefit. We made them. We ought to be able to think of a smart way to change them.

For right now, this conflict is being approached in different ways in several states.

WFLA:

 In just days, a bill passed by the Florida Legislature will come before Governor Ron Desantis for signature. It will help shape the fate of rooftop solar in the Sunshine State. 

The controversial bill lowers the credits power companies are required to provide to rooftop solar customers for the power they provide to the grid. Solar advocates say this will disincentive Florida residents from investing in solar panels, crippling the rooftop solar industry.

House Bill 741 will soon become law unless Gov. DeSantis vetoes it. 

“A signature will mean the end to solar as we know it here in Florida,” says former Navy Seal Steve Rutherford, now the owner of Tampa Bay Solar, “Basically it is a gun to the solar rooftop industry’s head.” 

So why is this bill so consequential? Because right now homeowners with rooftop solar are compensated by the power companies for the excess energy they produce on sunny days. This is called net metering.

The energy flows into the grid and supplements energy the power companies would otherwise have to provide, thus helping lower demand overall.

The compensation rooftop solar owners receive is a credit which they can then use at night when the sun does not shine. This keeps electricity bills down and in some cases near zero for energy charges. For many solar owners, it also allows them to pay off the large upfront investment required for solar panels.

“I haven’t had an electric bill all year,” says retired St Petersburg police officer Leonard Leedy – a customer of Rutherford. But he says he still pays the minimum payment to his utility of $30 dollars per month.

If passed, over the course of several years, this bill would lower the rate of credits from retail to wholesale. Leedy feels that is unfair because power companies charge the retail rate for energy, so he feels rooftop solar owners should receive the same rate for the electricity they produce.

8 On Your Side reached out to Florida Power and Light and they agree with the bill and disagree with Leedy.

A spokesperson for FPL explained that while rooftop solar owners do indeed supply energy, they do not provide a service like the power companies do. Therefore, FPL argues rooftop solar owners do not deserve to be paid the same rate for energy as the utilities.

FPL sees this change as necessary because they tell me these credits cost the utility $30 million dollars last year, a cost passed onto non-solar customers. Since FPL serves 5.6 million customers, that equates to around $5 dollars per customer for the year, or about 50 cents per month per customer.

For residents who already have rooftop solar installed, their retail rate will be grandfathered in for 20 years. So for people like Leedy, this bill will have minimal impact.

The bill text reads that for residents who invest in rooftop solar in the coming few years, they will lock in a compensation rate scaled down from the current retail rate. But for rooftop solar customers from 2029 onward, the new wholesale rate applies. 

According to records obtained by Floodlight and the Miami Herald text for the bill was hand-delivered to a lawmaker by FPL.

When 8 On Your Side asked FPL about this and they said.

“Following the Florida Public Service Commission’s 2020 Net Metering Workshop, we’ve been engaged in constructive dialogue with numerous lawmakers regarding this important issue. We provided our recommendation for a fair and equitable way to modernize Florida’s net metering rules that are more than a decade old. Ultimately, lawmakers decide the exact language that will be included in a bill that they choose to sponsor.” 

But many industry advocates feel this will ruin Rooftop Solar’s return on investment and dissuade future customers. Heaven Campbell from Solar United Neighbors says it’s small businesses that will suffer the most, “We expect to see is job loss and frankly business closures – mom and pop businesses – the majority of the solar installers, we have 100s in Florida.”

A Novembestudy found that Florida’s rooftop solar industry supports 40,000 jobs and has an economic impact of 18 billion dollars.

30 percent of Rutherford’s Tampa Bay Solar employees are veterans. He is worried about his employees and the thousands of others who work in rooftop solar. He feels nearly 4,000 jobs are at stake. 

According to the US Energy Information Administration, states that implemented similar rules to what Florida is on the verge of doing continued to see some growth in rooftop solar after the new rules took effect, but the rate of growth was significantly lower in some cases.

8 On Your Side reached out by email to Gov. DeSantis’ office and asked if he has decided to sign this bill. An office spokesperson said, “The governor has not yet received this bill from the legislature. He will act on it based on its final form, once delivered.”

Same battle going on in the other sunshine state, California.

PV Magazine:

A bipartisan group of 22 California legislators, including both Senators and Assemblymembers, have sent a public letter to Alice Reynolds, Chair of the California Public Utilities Commission (CPUC), asking that the Commission to reject the proposed decision issued on December 13, 2021, and to keep solar growing, affordable, and in line with California’s clean energy goals.

The letter focuses on the proposed decision’s monthly fee on residential solar customers, with the legislators saying such a fee could “significantly depress the clean energy market, and negatively impact a California-based businesses supporting a sizable number of jobs statewide.”

The letter also takes issue with the proposed lower export credit, with the legislators warning that such a drastic reduction could make it much harder to finance of new multi-family housing projects, reducing new construction of much needed affordable housing. The legislators even go so far as to agree on the need for a somewhat lowered export credit, but not one so drastic as the proposed decision.

6 Responses to “Florida Bill “a Gun to the Head” of Rooftop Solar”

  1. rhymeswithgoalie Says:

    If passed, over the course of several years, this bill would lower the rate of credits from retail to wholesale. Leedy feels that is unfair because power companies charge the retail rate for energy, so he feels rooftop solar owners should receive the same rate for the electricity they produce.

    That’s not how markets work. Unlike the homeowner, the utility has to provide power on demand. Furthermore, if there is a power outage the utility has to pony up to get it fixed as soon as possible (at a higher cost than if they paid people for daytime work), but the homeowner is not under obligation to reconnect to the system at all.

    This reminds me of the people who complain about the cost of blood transfusions “because people donate blood for free”: The phlebotomists’ time and skill, the special blood extraction and monitoring materials, the storage and shipping costs for the hospitals, and the process of infusing blood all cost money.

    Ideally, owners of home solar would get some form of floating rate that reflected the price demand at the time, with a premium for when demand is high and supply is low.

    • J4Zonian Says:

      “A spokesperson for FPL explained that while rooftop solar owners do indeed supply energy, they do not provide a service like the power companies do.”

      Distributed solar with batteries perform phenomenal services.

      Besides just providing the world with carbon-free power, one thing they do is make it possible to add more utility solar power, which makes it possible to add more wind power. As grids are upgraded it will be more possible for these DERs to help perform some ancillary services like frequency regulation, etc.

      Rooftop solar and home batteries make a clean grid vastly more affordable
      “Distributed energy is not an alternative to big power plants, but a complement”
      https://www.volts.wtf/p/rooftop-solar-and-home-batteries?s=r

      • J4Zonian Says:

        The question can’t be about what’s fair because the right has gone so far to the right they have a completely different view of what’s fair than any normal person (or the vast majority of religions & philosophies). What’s fair according to the new right is whatever helps their tribe, disses liberals, & reduces the help government gives to everyone not in the punishment-&-coercion industry.

        That same lunatic cabal has delayed action on climate & the larger crisis for so long the question has to be about what helps us survive as a cohesive (but changed) civilization. For this issue that’s whatever puts the most solar on the grid while it dismantles & revolutionizes the political-economic system in general & utilities specifically.

      • rhymeswithgoalie Says:

        A solar “prosumer” with no contractual grid responsibilities does not merit a full retail payment for their electricity whenever they happen to produce it. Why should they get paid more than wholesale power providers?

        • J4Zonian Says:

          Because it gets them to build it. Did I not explain that part?

          Are we not unrepentant capitalists in this company—I mean country?

          There can be payment plans by which DER owners get the retail price when power is needed most (top of the duck curve, eg, or variable times determined by a compromise between the needs of the smart grid and the programmed needs of the household). If there’s an agreement that the utility buys their power at a high enough rate to encourage building enough solar, the utility has good incentive to sabotage the building of more solar, batteries, and alternate uses.

          Oh wait, that’s what we have now.

          One good solution is to require (subsidized) storage or alternate use (desalination or water pumping, eg) with every solar installation, something I believe California’s Gazillion Solar Woofs law left out. (Since, like Texas, (and for the same reasons) they also left out the part about connecting better to grids to the east it makes the solar much less useful & more expensive.)

          There could be an agreement to phase out the high payment rate for each producer a few years after they back their investment. But the rate encoded in the law has to be easily and quickly increasable if solar isn’t being added fast enough, or it has to increase automatically and immediately any time not enough is being added.

          Power added now is extremely much a whole lot more valuable than power added in 5 or 10 years, because both emissions and emissions reductions are cumulative, and climate shifts are non-linear and not completely predictable as to time and GGHG levels.

          This agreement needs to be implemented now; delay is still the bipartisan far right’s main strategy. (Only strategy?) Given the level of their corruption and funding, trying to adjust the agreement upward is infinitely harder than adjusting it downward, and adjusting it upward later after more GHGs have been emitted and less public attention is being paid, is infinitely less useful than adjusting it upward now and reconsidering later if it’s called for.

        • J4Zonian Says:

          These new double-duty heat pumps can warm both air and water
          Heat pumps are a more efficient way to heat homes. Startup Harvest Thermal says its tech can turn them into thermal batteries too.

          https://img.canarymedia.com/content/uploads/Harvest-Thermal-load-shifting-graphic.jpg?auto=compress%2Cformat&crop=focalpoint&fit=crop&fp-x=0.5&fp-y=0.5&w=1168&s=7e7c77adf20809f757c337cfcd7afc40

          https://www.canarymedia.com/articles/heat-pumps/these-new-double-duty-heat-pumps-can-warm-both-air-and-water?utm_campaign=canary&utm_medium=email&_hsmi=208299499&_hsenc=p2ANqtz-8glCA1c9Qktrrprvj6uz_iqzLA3nrHRTnHyhk6j-WGd5F6e7NnUbL9b4eZQ3VpJGaZtdI29aFheBKoNNhPGxla-KWXZA&utm_source=newsletter

          As Drawdown talks about, the same can be done with water & ice for refrigeration, though I don’t know if it’s more efficient than heat pumps.


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