Central Florida Solar Panels
Information about Central Florida Solar
Note on area covered: This article focuses on going solar in the Central Florida area, including Tampa, Ocala, and Titusville. Utilities in this area include FPL, Duke-Progress, and TECO. If you are interested in going solar in Orlando, check out our dedicated solar in Orlando page.
Central Florida sees great sunshine and clear weather for much of the year – a perfect place for solar! If you’re wondering whether it makes sense to go solar in the area, or how to go solar, you’re in luck! We’ve done the heavy lifting for you and created this guide to central Florida solar! This is your one-stop-shop for learning about what financing is available for your solar installation, what kind of financial savings you can expect going solar, relevant solar policy, and financial incentives.
For a broader state overview, see our Florida solar state page.
#1 Overall Solar Grade
* Note that these are estimated values for informational purposes only, and do not take into account the full complexity of all financial projections. They also only apply to cash purchases, which means your numbers will be different if you lease your system or pay for it with a loan (factoring in interest). Also note that we are not financial advisors, so this information should not be construed as financial advice.
Going solar in central Florida is a great investment – if you do it right. Beyond a couple tax exemptions and a fantastic net metering policy, the state offers very few incentives for homeowners going solar. Adding even more difficulty to the state’s solar industry, Florida is one of only a few states that specifically outlaws third-party ownership of solar installations, meaning the leases and PPAs that have spurred the growth of the solar industry are simply not an option to Florida homeowners.
However, by smartly choosing your financing and taking advantage of all the federal and state tax breaks and net metering incentives, you can save upwards of $18,000 for an average-sized installation! Not too shabby!
#2 Options for Buying Solar Panels in Central Florida
Several components –like installation size and utility rates – affect your rate of return, but your chosen financing type plays one of the largest roles. As in any situation in life, cash is king and you’ll always save the most with a cash purchase. That being said, even though the savings are substantially lower, solar loans offer good bang for the buck and you’ll still save thousands over the long run!
For the best return on your investment, you can’t go wrong with cash upfront. For an average-sized installation of 5 kilowatts, homeowners can expect to save around $17,844 over 25 years, with a payback time of 12 years!
To find these figures, we looked at the estimated installation prices from several reputable sources, including the National Renewable Energy Lab, and found an average of $3.32 per watt (which mean a full system price of $16,600). After accounting for the 30% federal tax credit (subtract $4980), we then compared the total cost to what you would pay the utility over the next 25 years if you never installed solar. The difference between the two costs is your total savings.
Purchasing solar in cash is by and large the easiest, simplest transaction when going solar. You provide the entire payment upfront and the solar company installs the system. They’ll typically set up a monitoring system as well so you can see how much electricity your solar panels are producing and calculate your yearly savings as well.
As the sole owner of the installation, you are eligible for all tax incentives, including the 30% federal tax credit, and net metering credits as well. You’re responsible for monitoring and maintaining your installation. You’ll need to periodically check your solar installation’s production to make sure there hasn’t been a significant or immediate drop over the last month or two, signifying a panel or equipment malfunction. Both panels and inverters have long term warranties, but any additional repair costs come out of your own pocket. With that in mind, solar installations are fairly simple and have no moving parts, so maintenance and repair work is minimal to nonexistent.
Maintaining and monitoring your system is certainly something to be aware of, but nothing to worry about! In fact, you’ll be so excited about producing your own electricity that you’ll be checking your production far more than you’ll even need to!
If you don’t have the funds for a cash purchase, be sure to look into loans for your solar installation. Savings vary greatly by interest rate. As a benchmark for you to compare your own loan to, we assessed a 12 year solar loan with 5% interest and found a total savings of $10,815 after 25 years.
As you can see, your total savings with a loan is about 60% of a cash deal. Your loan’s term and fees also play a hand in your financial savings, so it pays to shop around and see what a few different lenders are offering. Solar loans can be a great deal – if you choose the right one. Financial savings from loan-financed solar is hugely dependent on interest rates, loan length, the loan structure, and any fees.
As we saw, homeowners who go solar with a 5% loan can save over $10k over the life of the installation. Pretty good! If we increase that interest rate to 7%– on the high side – total net profit after 25 years drops down to $7,587. The savings are still there, but it’s just 40% of the financial savings you’d seen if you’d gone cash! So remember, if you go loan, be sure to read through the agreement and talk to a few different lenders!
As with a cash purchase, you the homeowner are eligible for all financial incentives, but are also responsible for maintenance and monitoring as well.
More: Solar Loans
Although the state of Florida doesn’t allow leases or power purchase agreements, there is actually a 3rd financing option beyond cash and loans for central Florida homeowners. PACE financing is only available to homeowners in a handful of states, including Florida. PACE stands for Property Assessed Clean Energy and the program is just that. Local governments foot the bill for renewable energy projects, including solar, and homeowners repay the ‘loan’ through an assessment on their annual property tax bill.
PACE financing is very similar to a loan, but typically offers very low interest rates and longer terms. The biggest difference between loans and PACE financing is that, unlike loans which are connected to the individual, PACE is connected to the property. This means that, if you move, you don’t need to pay off the loan or switch the loan over to the new homeowner, they simply move in and continue to pay off the financing on their property tax bills.
#3 Central Florida Solar Policy Information
The state of Florida has some excellent policies set up to encourage the growth of solar in the state.
Renewable Portfolio Standard
Many states have passed goals that a specific portion of their electricity must come from renewable energy by a certain time. California, for example, passed legislation in 2002 that one-third of all electricity from the three large investor-owned utilities in the state must come from renewable sources by 2020. RPS goals drive utilities to push renewable energy. When coupled with rebates and other financial incentives for homeowners and business who go solar, RPS goals spur serious growth in states’ solar industries. Without RPS goals, utilities have no real immediate reason to adopt renewable energy sources themselves or encourage its adoption amongst its customers.
Florida has yet to adopt any RPS goals and it’s actually quite surprising how large the solar industry is in the state without these goals. The state should really contemplate adopting RPS if they’re serious about renewable energy in the state. Without these goals, the solar industry will continue to muddle along, instead of booming like in other states.
Florida’s typical utility rate of $0.1139 per kilowatt-hour hovers right in the middle of regional and nationwide averages. It’s about half a cent ($0.005) less than the regional average of $0.1186 and over a cent less than the national average of $0.1287 (as of September 2016). It’s safe to say electricity prices in Florida are…. average.
The price utilities charge for electricity plays a huge role in solar savings. The higher electricity prices are, the more money you can save by avoiding those utility costs through going solar. That’s why homeowners in Hawaii are lining up for solar, the average electricity price is $0.2784 – the highest in the country! That’s some serious potential savings.
However, you don’t have to have astronomical utility rates to save money going solar. Colorado and Utah, both of which have huge amounts of solar, see average rates of $0.1278 and $0.1128 respectively. If Colorado homeowners can save money going solar, you can too!
The state of Florida took a huge leap forward when it passed legislation in 2008 requiring investor-owned utilities (like Duke-Progress and FPL) to offer net metering incentives to homeowners going solar. Great job Florida!
And in fact, it’s a fantastic net metering program. It ensures that utilities give homeowners full retail credit for all excess electricity they produce. The credits are applied to your next monthly bill and roll over month to month. If you have any credits left over at the end of the year, they pay you the avoided cost of your excess electricity. Basically, they pay you what it would’ve cost them to generate that electricity – usually around $0.03/kWh. Not too much, but money is money!
As a municipal utility, TECO is under different regulations, but homeowners under this utility are in luck, as TECO also offer net metering credits worth the full retail rate! You can read more about TECO’s net metering on its website.
More: Net Metering
Along with net metering legislation, Florida also passed interconnection standards in 2008 that guarantee homeowners a smooth and easy process to receive approval from their utility to connect their installation to the electricity grid. The legislation created three tiers for the interconnection approval process, based on installation size. Most homes fall into Tier 1, which is for installations under 10 kilowatts. In this tier, homeowners aren’t required to pay any application fees and interconnection studies aren’t required. The process is fast and simple.
If your installation is larger than 10 kilowatts, you’ll fall into Tier 2. This tier is very similar to Tier 1, but your installation will require an external safety disconnect switch as an additional safety precaution. Not a huge deal, but it will be an additional piece of hardware on the outside of your home.
Tier 3 is for solar installations over 1 megawatt, which is typically only large commercial projects.
Homeowners Associations (HOAs) in some states are known to have caused headaches for residents wanting to go solar. Some don’t like the look of solar panels and so try to block installations. Others have made the process long and drawn out to discourage solar.
Florida’s done a great job mitigating some of these issues by passing a law making it illegal for HOAs to disallow solar installations. HOAs can request homeowners to move solar panels to the back portion of the roof so they aren’t visible from the street, but only if the move doesn’t affect the installation’s production.
If you’re going solar and are worried about your somewhat cantankerous HOA, worry no longer! By all means work with your HOA and try to solve any issues amiably, but in the end, know that you’ve got the right to install solar on your roof!
#4 Financial Incentives, Rebates, and Tax Credits
Central Florida homeowners are eligible to receive tax credits, tax exemptions, and possibly a cash rebate (depending on your area) for their solar installation!
Federal Tax Credit
The federal government offers a 30% tax credit for the total cost of your installation. As this is a full-on credit – not a deduction – it’s a 30% dollar-for-dollar discount on your total installation price. As the owner of the installation, you apply for the credit on your next tax return. This tax credit was extended to the end of 2019, when it drops to 26% until 2021, the 22% until 2022.
More: Solar Federal Tax Credit
Many states require utilities or state-wide efficiency programs to offer financial rebates to customers going solar. Unfortunately, such is not the case in Florida and there is no state-wide rebate for solar installations. In fact, central Florida is home to the only solar rebate in the entire state!
The City of Longwood offers rebates for solar as well as other renewable and efficiency projects worth 10% of the total project cost, up to $500. This pales in comparison to rebates in other states like Oregon, where solar homeowners are eligible for thousands of dollars. But, if you live in the city of Longwood, that’s cash in your pocket! Great job Longwood!
Property Tax Exemption
If you go solar anywhere in the state of Florida, you are exempt from paying additional property taxes for the value of your solar installation! So, for example, if your home is worth $120,000 and you install a $15,000 solar installation, you can continue to only pay property taxes on the $120,000 value of your home, not the actual $135,000 value that the solar installation adds!
Sales Tax Exemption
All the equipment you purchase for your solar installation is exempt from state sales tax, which is typically 6%. Homeowners who take advantage of this tax exemption can save around $400 for an average-sized installation!
If you’re wondering if going solar in central Florida is right for you, go for it! You stand to save tens of thousands of dollars over the life of your installation. But as with any investment, be sure to review all the savings estimates your installer gives you to make sure it’s worthwhile. This is especially true if you are financing through a loan or PACE, as the interest rate, fees, and loan term seriously affect the savings you’ll see. Once installed, as you enjoy the Florida sunshine, you’ll know that you’re also producing clean, cheap electricity for yourself! What could be better? But before all this, be sure to speak with a qualified installer to get a customized estimate for your home!
General Increase in Home Value
If you’d like to dig even more on local incentives and rebates, check out the DSIRE database.
Image Credits under CC license from Wikipedia