Solar Energy- The Next Big Boom in Florida? Solar Energy- The Next Big Boom in Florida?
On November 9, 2016

Solar Energy- The Next Big Boom in Florida?

Florida rejects solar

Some states like California set state mandates for solar energy. Some countries, like France, even place green building restrictions on every new building constructed which force contractors to use at least 50 renewable energy sources like solar.

Florida law, on the other hand, restricts the progress of solar energy. For one thing, Florida only allows customers to buy energy directly from utility companies. Buying energy from a private provider such as a solar company is simply against the law. And while solar energy companies can produce energy in Florida and sell it to the utility companies, it is at a wholesale cost, which makes turning a profit difficult.

But here is where what Jim Fenton, director of the University of Central Florida Solar Energy Center, calls a “game changer” comes into play.

The game changer that Fenton speaks of are the innovative lease arrangements that Florida Solar Firms have used to make using solar energy possible for homeowners. Instead of selling solar energy directly to customers, solar firms such as Solar City offer homeowners lease agreements where they are essentially leasing the solar panels from Solar City.

Because the solar firm is not selling energy directly to homeowners but instead leasing the panels to them, the arrangement complies with the law but also solves another very large problem that Florida homeowners have faced on their way to energy independence. Leasing lowers up-front costs a homeowners has to pay. While a typical solar system can cost as much as $15,000 for a homeowner, leasing a system often requires no upfront cost. Instead, solar companies ask homeowners to sign a lease agreement that holds the cost of energy steady for several years. While the homeowner may initially pay slightly more for energy, over time, the rising cost of traditional energy sources will outpace the fixed rate for solar.

Last month, for example, Winter Park, a city in Florida, contracted with Cape Canaveral-based Clean Footprint for its own solar array. The terms were that the city pays nothing up front but will pay the company a fixed rate for solar for 25 years, just a half-penny above the city’s current lowest-cost power source.

Large scale deals such as this seem to be setting the trend for Florida solar energy. What they offer to solar companies is the ability to mass produce solar energy which maximizes the limited profit margin leasing allows. Solar City, for one, just signed a deal with Del Webb communities, a new home construction company, which will offer homeowners the option of either leasing a small preinstalled system, or upgrading to an 8-kilowatt system that would generate roughly the 1,000 kilowatt hours used by the average Florida utility customer each month.

And while solar installations currently enjoy a 30 percent Federal Tax credit in Florida, even when that expires at the end of this year (2016), Fenton still predicts that as soon as 2025, solar energy will cost roughly half of that of power produced by a utility company.

Despite the political support for solar that states like California, Arizona, and New Jersey enjoy, Florida is still positioned to become what Fenton calls a “solar tsunami”. The reason? Dropping installation costs and energy rates that utility companies simply cannot compete with mean that, in Florida, the already hearty demand for solar can finally be met.

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