Tag Archives for " Florida "

Going Solar Panels Gainesville, FL

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Information about Solar Panels Gainesville, Fl

In 2011, the sheer quantity of solar panels residents and businesses of Gainesville, FL had installed made national news. The number of solar installations was three times as high as the US national average and higher even than solar-friendly countries like Japan and France. No doubt this spike in popularity was due in part to GRU’s (Gainesville Regional Utilities) very popular solar feed-in tariff program which provided incredible financial incentives for solar electricity pushed back into the grid by their solar customers.

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Solar Panels in Fort Lauderdale, Florida

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Information about Buying and Installing Solar Panels in Fort Lauderdale

With sunny skies and numerous solar installers, using solar panels in Fort Lauderdale is a great idea. It’s even home to Advanced Green Technologies, the largest solar installer in the state (though SolarCity will take over this title as they begin in operations there).

If you’re a homeowner in the Fort Lauderdale area, there are a handful of financial incentives –-including the 30% federal tax credit and net metering -- that make going solar a great decision. While Fort Lauderdale homeowners won't save as much money as those in solar-friendly states like California or Oregon (where homeowners can enjoy upfront rebates from their utilities and electricity rates are high), you can still save of dollars by installing Fort Lauderdale solar panels!

For a broader state overview, see our Florida Solar page.

#1 Overall Solar Grade

C+
Overall Grade
12 years Avg. Payback Time (For Cash Purchase)
3.4 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$17,844 Your Net Profit Over 25 Years (Cash Purchase)

* 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 Fort Lauderdale can allow homeowners to save nearly $18,000 over the life of the solar installation. The state of Florida in recent years has adopted many policies to encourage growth in the solar industry and ensure homeowners can install solar easily and quickly. However the lack of financial incentives such as upfront rebates - as well as moderately priced electricity - hinders solar growth in the sunshine state.

#2 Options for Buying Solar Panels in Fort Lauderdale

For an average-sized installation of 5 kilowatts (about 20 panels), homeowners who purchase a solar installation in the Fort Lauderdale area can expect to save around $17,844 over the 25 year expected life of the installation. These savings are calculated by comparing the cost of going solar to the cost of continuing to purchase electricity from the utility over the next 25 years.

Homeowners who finance through loans realize a lower return on investment. With a 5% interest loan, you can save around $10,815 over 25 years. Significantly less than cash purchase, but almost $11,000 is nothing to scoff at! Savings from loans can vary dramatically though due to many factors including the interest rate, size of your installation, financial incentives, and utility rates.

So no matter what financing you choose, rest assured you’ll be saving thousands of dollars over the next 25 years!

Cash upfront

As we saw above, purchasing your solar installation outright provides a faster financial payback than financing your installation with a loan.

The process for purchasing a solar installation is fairly simple and similar to any other home improvement project. You pay the installer the full cost of the installation upfront, which for many is not an easy task, as solar installations are quite expensive. As the solar owner of the installation, you are eligible to receive all financial incentives including net metering credits and the tax incentives, which seriously decreases your total investment.

You are also responsible for monitoring and maintaining operation of your installation. This isn’t too much to worry about, as manufacturers provide long-term warranties for both inverters and solar panels If a piece of equipment does malfunction, it will likely still be covered under the product warranty.

Loan

You’ll save less with loans than with a cash purchase, but they provide one clear advantage over cash purchases. With loans, homeowners do not need to provide the huge initial capital to pay for the solar installation in its entirety. Homeowners simply work with a bank, credit union, or dedicated solar loan provider who pays for the installation up front and the homeowner pays back with interest in small monthly increments.

The financial savings you’ll see with a solar loan depends on the interest rate, loan term, and any applicable fees. For our savings calculations in the section above, we assumed a 5 percent interest rate over a 12 year loan term. A lower interest rate will provide even more long term savings and a higher interest rate will lead to much lower savings.

With this in mind, if you are looking to finance your solar installation with a loan be sure to talk with several loan companies to ensure you receive the best possible arrangement. Solar installers often have a preferred lender that can provide competitive interest rates, so be sure to ask potential installers what financing is available through them.

Property-Assessed Clean Energy (PACE) financing in Fort Lauderdale

Through PACE financing, local governments foot the bill for homeowners to install solar and other renewable and efficiency measures. Homeowners then repay the debt through an assessment on their annual property tax bill. PACE financing typically guarantees low-interest rates and longer loan terms, allowing homeowners to enjoy smaller payments each month.

One major difference between PACE financing and loans is that, unlike loans, PACE financing is connected to the property, not the homeowner. This allows you to easily move to a new location without worrying about transferring a solar loan to the new owner or paying off the loan in full before selling the home.

The city of Fort Lauderdale is currently working with two organizations to offer PACE financing:

PACE financing is a great option for homeowners lack the cash for a full upfront purchase and are contemplating moving in the next 5 to 15 years.

Bottom Line: If you are looking to finance your solar installation with a loan, be sure to talk with several loan companies to ensure you receive the best possible arrangement.

More: Solar Loans

#3 Fort Lauderdale Solar Policy Information

Over the last 10 years, the state of Florida has enacted several policies to make going solar an easy and profitable experience.

Renewable Portfolio Standard

Many pro-solar states have adopted what’s known as renewable portfolio standards, which basically mandate that a certain percentage of all electricity used in the state must come from renewable sources. Colorado, New Jersey, and California, for example, have all adopted renewable portfolio standards – typically requiring that 10 to 30 percent of all electricity come from renewable energy by 2020 or 2030. These mandates push the electricity industry to adopt and encourage growth in the renewables industry, something utilities would otherwise likely avoid.

Unfortunately, Florida has yet to adopt any state-wide renewable portfolio standards- a huge gap in their otherwise solid solar policy portfolio. However, Fort Lauderdale has stepped up to the plate themselves and set fairly high efficiency and renewable standards (PDF download) themselves for their city!

By 2020, they plan to reduce energy use by 20 percent as well as source 20 percent of their electricity from renewable sources by the same year. The city is focusing on both government and community buildings. As of publication of the above report, the city was still assessing how to implement these goals.

More: Renewable Portfolio Standard (RPS)

Electricity Prices

Electricity prices affect you financial savings going solar: the higher electricity prices are, the more money you can save going solar. In most of life, low electricity prices are a good thing, but with solar higher utility prices equals higher savings!

The average utility rate in Florida hovers around $0.1130 per kWh. Compared to the national average of $0.1275 per kWh, Florida sees fairly low rates; cheaper than Alabama’s electricity ($0.1229) though higher than Georgia ($0.1093). Don’t worry too much though. While you won’t save as much as homeowners in New York ($0.1775 per kWh!) or California ($0.1797 per kWh), going solar in Fort Lauderdale is still quite profitable!

Net Metering

The state of Florida requires investor-owned utilities like FPL and Duke-Progress to offer residential customers net metering credits for any excess electricity their solar installation produces and which goes into the electricity grid to be used elsewhere. Utilities credit customer accounts for the full retail cost of the excess electricity. So, for example, if your electricity rate is $0.11 per kilowatt-hour and your solar installation produces an extra 50 kilowatt-hours in a month, you will receive credit for $5.50 the following month.

If you have any credits left over at the end of the year, the utility will pay you for that excess electricity at avoided cost, which is the amount they would pay for the same amount of electricity (usually around $0.02 to $0.03 per kilowatt-hour).

More: Net Metering

Interconnection Rules

The state of Florida recently passed regulations to make the process of connecting solar installations to the utility grid faster and easier for homeowners and businesses. The law set standards for the interconnection process based on the size of the solar installation:

  • Tier 1: Installations under 10 kilowatts (equal to about 40 solar panels). Most homeowners fall under this category. The law guarantees that homeowners don’t have to pay any application or interconnection fees, hopefully leading to an easy, speedy approval!
  • Tier 2: Installations between 10 and 100 kilowatts. Homeowners with a large solar installation fall into this category. The only real difference between tear one and her 2 is that tear to installations require an additional eternal safety disconnect switch, and safety requirements among many utilities.
  • Tier 3: installations between 100 kilowatts and 2 megawatts. These regulations only apply to large scale commercial and industrial installations.

Solar Access Rights and Homeowners Associations

The state of Florida guarantees homeowners the right to go solar – Homeowners Associations (HOAs) or any other similar organizations can’t bar solar in their neighborhoods. Associations can request solar panels be installed on the back side of the house where they are hidden from street view, but only if placing the panels there doesn’t affect electricity production. If you’re worried about your cantankerous HOA, you can move forward knowing you have the right to go solar!

#4 Financial Incentives, Rebates, and Tax Credits 

There are currently no rebates available for Fort Lauderdale area solar. In the past however, the City of Fort Lauderdale has offered rebates to residents installing solar panels, so it’s worth reaching out for up to date information on what incentives or services they offer.

While rebates are sparse for Fort Lauderdale homeowners, there are many tax incentives that make going solar a bit more lucrative.

Federal Tax Credit

The 30% federal tax credit is available to homeowners across the country who install solar through a cash purchase or loan (the owner of the installation is eligible for the incentive). The credit originally phased out in 2016, but was extended until 2019, when it drops to 26% until 2021, and 22% until 2022, when it is completely phased out.

The federal tax credit is a fantastic deal – install solar panels and the federal government will allow you a dollar-for-dollar credit worth 30% of the total installation cost. Simply claim the credit the next time you file your taxes. One sweet deal!

More: Solar Federal Tax Credit

Property Tax Exemption

When you install solar panels, you are also eligible for the state-wide property tax exclusion, which allows homeowners in Florida to pay property taxes on the value of their property without accounting for the solar installation. So, for example, if you installed a $12,000 solar installation on your $120,000 home, you’d continue to pay property taxes for $120,000 – not $132,000!

Sales Tax Exemption

Fort Lauderdale homeowners can take advantage of the state-wide solar tax exemption for all solar equipment installed on their home. With a sales tax rate of 6%, this exemption can save homeowners around $400 for an average-sized solar installation!

General Increase in Home Value

A 2015 study by the Lawrence Berkeley National Lab found that solar installations in Florida increase a home’s value between $2.30/watt and $3.11/watt (p.15 of the report). Researchers only looked at homeowner-owned installations (so no leases, PPAs, or loans) and found similar increases among both new and existing construction. So for an average-sized 5.6 kilowatt installation, home value can increase at least $13,000 for Florida solar!

What to do next?

Going solar in Fort Lauderdale is a great way to save money while contributing to a healthier environment. To see the most financial savings possible – especially if you decide to finance your installation through a loan – be sure to discuss with several different installers what options are available, equipment and warranties, and savings estimates. And after the installation is complete, don’t forget to apply for those tax incentives!

Image Credit via Flickr under CC License 

Central Florida Solar Panels

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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

B-
Overall Grade
12 years Avg. Payback Time (For Cash Purchase)
3.4 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$17,844 Your Net Profit Over 25 Years (Cash Purchase)

* 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!

Cash upfront

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!

Loan

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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

PACE Financing

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.

More: Renewable Portfolio Standard (RPS)

Electricity Prices

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!

Net Metering

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

Interconnection Rules

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

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

Local Rebates

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

More: Buyers Will Pay More for Solar Homes

If you’d like to dig even more on local incentives and rebates, check out the DSIRE database.

Buying Solar Panels in Orlando, FL

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Information about Solar Panels in Orlando, FL

If you’re looking into solar power situation in Orlando, you’ll find a fairly mixed bag of ups and downs. From a practical standpoint, Orlando is a fantastic place to install a rooftop solar array. According to the National Renewable Energy Laboratory (NREL), Florida ranks 3rd overall in the potential energy that could be gained from rooftop solar, with only California and Texas coming out ahead. All that sunshine can do wonderful things to your energy bills.

Unfortunately, the outlook is a little less sunny politically speaking, with minimal support for solar throughout the state. We give Florida a rank of ‘B-’ overall – whilst there’s not much stopping you, you won’t find the support that you might find in more forward-thinking states.

Let’s take a closer look.

For a broader state overview, see our Florida solar page.

#1 Overall Solar Grade

B-
Overall Grade
12 years Avg. Payback Time (For Cash Purchase)
3.4 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$17,516 Your Net Profit Over 25 Years (Cash Purchase)

* 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.

#2 Options for Buying Solar Panels in Orlando, Florida

We’re going to base our examples off a recent report by NREL, which provides us with an average cost of $16,466 for a typical 5kW home solar installation. That’s a good size, balancing the costs of installation and maintenance against the savings you’ll see on your energy bills. We’ll use this figure as our starting point for working out what kind of returns you might expect from investing in a solar system. As always when dealing with averages, keep in mind that things are rarely so neat in the real world – depending on your needs and situation, your own system may cost less or more than our $16.6k figure. Most solar systems are warrantied for 25 years, after which the output is expected to drop below 80%. We’ll use this as the period you can expect to see returns in.

Cash upfront

florida-solar-home

For most people, $16,466 is a big chunk of change, and paying up front means you need to drop it all in one go. To ease the sting somewhat you can take advantage of the Federal Tax Credit, which gives you 30% the value of the system off your income taxes – $4,940. If that’s less than your taxes for the year any remaining will roll over and be credited to you on the next year.

For the sake of simplicity, we’ll make a few assumptions about your energy costs – the average home in Florida uses about 13,700 kWh of energy every year, at a cost of 11.39¢/kWh. Using NREL’s PVWatts calculator, a typical system in Orlando might deliver around 7300 kilowatt hours (kWh) per year – that’s a saving of around $831 dollars. Add that to the tax credit, and you’re looking at savings of $5,771 in the first year!

The beauty of solar power is that once the system is in place it will keep generating energy, with only a very minor decrease in solar output each year. After the expense of getting the system installed, you only have to deal with maintenance costs, which tend to be minor – not much beyond keeping the panels clean of dust, pollen and other detritus. Contrast that against the expense of buying energy from your utility – on average across the US the cost of energy increases by 3.5% every year. More locally, Florida Power and Light (FPL) has asked for a price hike of 24% over the next 3 years!

Bottom Line: Paying with cash in our example gets the system is paid off within the 12th year, and during the rest of its warrantied life the system will bring in $17,516 in profit.

Leases

In many states, leasing your solar system can be a very attractive option. In exchange for a lower long-term payout, many installers offer a zero-down lease – you pay nothing up front.

Likewise, Power Purchase Agreements (PPAs) involve allowing a supplier to install a solar system on your roof, and then paying a monthly fee for the power. These are often a better deal if you have very high energy requirements.

Bottom Line:  Unfortunately, one of the side-effects of Florida’s restrictive utility monopoly utility law means that leasing your panels from a supplier is effectively banned, so we’ll need to look elsewhere for methods of financing the installation.

More: Solar Leases

Loan

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In most circumstances you would assume that the best way to get returns on an investment is to fund it yourself. In this case, however, getting some sort of loan can be a surprisingly good choice. For many people $16,466 is a sizable chunk of change, and paying it up front is impractical at best. Taking out the right loan can not only give you the financial backing to install your system, but thanks to the nature of the energy market it can actually work out in your favor.

For our example, we’ll assume that you take out a 15 year loan at 5% or less – it might be something like a home equity line of credit (HELOC). Because you’re doing the financing, you’re still eligible for the 30% federal tax credit. That gives you a return right out of the gate!

You’ll still be paying out around $60 each month during the first year. The loan itself is around $130 per month, until you factor in the value of your energy savings – around $70 per month, in this example. That might not seem great, but after accounting for yearly rate hikes in electricity (as mentioned above, about 3.5% annually if they follow the national trend), it very quickly becomes a much better prospect. After the system has paid for itself, you’ll be coming out ahead by around $1100 per year until the end of the system’s warrantied life.

Bottom Line: With our example, the solar installation will earn you $10,487 in profit over its life, and that’s without putting any of your own money in to get the system installed.

More: Solar Loans, Image Credit

#3 Orlando, Fl Solar Policy Information

Florida is a bit of a mixed bag, policy wise – there’s not much in the way of help, but for smaller home systems there are very few barriers and a couple of aids to getting a system installed.

Renewable Portfolio Standard

At the time of writing, Florida doesn’t have any sort of renewable portfolio standard (RPS) – these are commitments by the state government towards ensuring a certain percentage of the power used in the state is generated by renewable resources – usually wind or solar power.

As Florida doesn’t have an RPS, there’s no direct support from the state aimed at getting people into solar.

More: Renewable Portfolio Standard (RPS)

Electricity Prices

As mentioned above Florida electricity runs an average of 11.39¢/kWh, but it could increase dramatically above the average 3.5% per year increases considered normal.

Net Metering

Net metering is a system that lets you sell any unused power back to the grid. Your electricity monitors your usage and also how much of a surplus you create, and credits you accordingly.

Florida established net metering laws back in 2008, allowing anything up to 2 megawatt systems to benefit generating an energy surplus. It’s safe to say that any home solar installation you could want is covered under those terms!

There are some rules governing the systems that can connect to the grid, but as long as your installation is less than 10 kilowatts those rules don’t apply and you can connect whatever you’d like. Larger systems need to meet a variety of requirements before they can connect to the power grid, including liability insurance, external cutoffs, application fees and deposits.

More: Net Metering

#4 Financial Incentives, Rebates, and Tax Credits 

Back in 2013, Florida offered the Florida Renewable Energy Tax Incentive Program. Unfortunately they severely underestimated the demand, and the program was heavily over-subscribed. It quickly ran out of money, and the program was shut down. At the time of writing, the state of Florida offers no other rebates for setting up solar systems.

Federal Tax Credit

Aside from the 30% federal tax credit mentioned above, there aren’t any credits available for solar power in Florida. The federal credit was originally only available until 2007, but was extended to 2018, and is intended to be phased out gradually after that. There

More: Solar Federal Tax Credit 

Property Tax Exemption

This is one place where Florida really shines! Any value added to your home by your solar system is 100% exempt from property taxes. This is fantastic news if you’re going solar – your home value can increase by as much as $20 for dollar you save on your electricity every year. This is due to the decrease in the maintenance costs of your home.

Sales Tax Exemption

To add another sparkle to things, Florida also exempts all solar energy systems from sales taxes. The details are laid out in the Florida Statutes, Section 212.08, subsection hh, if you feel like wading through the legalese. To cut to the heart of the matter, that’s a 7% saving on any solar energy system or solar component that you buy!

General Increase in Home Value

According to the Appraisal institute, adding solar power to your home tends to increase its value significantly. Whilst giving precise figures for the improvements you might see in the Florida real-estate market is tricky (most of the studies on the value increases have focused on California), it’s pretty much universally agreed across the US that solar systems improve home value. Solar energy systems that are fully owned tend to see bigger increases in value than leased systems, though those also improve the price of the house.

More: Buyers Will Pay More for Solar Homes

If you’d like to dig even more on local incentives and rebates, check out the DSIRE database.

What to do next?

With no support from the utilities and very minimal help from the state, Florida in general and Orlando specifically could be a much better place for solar. That said, with abundant sunshine and a relatively short payback time, installing a solar energy system is still a good investment. Between OUC’s net-metering scheme, the property and sales tax exemptions and the federal tax credit, solar power is still worth it for an Orlando home.

You still have plenty of options, and if you’re at all interested in installing a solar system my advice would be to dive in and give it a closer look.

Photo Credits – Flickr via CC License: 1, 2

Florida Solar – Going Solar in the Sunshine State

florida-solar

Thinking of installing solar in sunny Florida? 

You’re not alone! The state ranked 17th in the most solar installed in the US in 2015. Not too bad considering Florida lacks many of the incentives that heavily discount the cost of going solar. However, the state sees excellent weather for producing your own renewable energy and homeowners can take advantage of numerous tax incentives to save even more money going solar!

If you’re looking for information on going solar in specific cities in Florida, check out our articles on Going Solar in Orlando, Going Solar in Central Florida, Going Solar in Gainesville, and Going Solar in Ft Lauderdale.

#1 Overall Solar Grade: Florida

C
Overall Grade
12 years Avg. Payback Time (With Cash Purchase)
3.41 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$17,422.51 Your Net Profit Over 25 Years (Cash Purchase)

Florida has some excellent policies to both encourage the growth of the solar industry and make going solar as easy as possible for homeowners. Unfortunately though, financial incentives like rebates are a huge hole in the state’s solar outlook and their general lack of financial incentives has plagued the solar industry in the state for years. Florida solar is buoyed up a bit by the state sales tax exemption and property tax exclusion and Florida homeowners are also eligible for the 30% federal tax credit as well.

The financial savings is still lower than other states with pro-solar policies, you can still save thousands of dollars going solar in Florida!

* 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). 

#2 Options for buying solar panels in Florida

Florida homeowners have plenty of excellent options to own their own solar installation, from cash upfront to PACE financing. Really it’s just a matter of deciding which financing type most suits your needs. Each has their own drawbacks and benefits.

Cash upfront

Ah, the cash purchase. No matter what you’re buying – a solar installation, a car, a private plane – you can pretty much rest assured that you’re making the most financially responsible decision if you can simply purchase the item outright. It’s simple and cost-effective. No interest rate, no loan fees, no annual rate increases (like with solar leases). However, you need a pretty big sack of money saved up to buy something as big as a solar installation. After applying the 30% federal tax credit, an average-sized (5 kilowatt) installation in Florida runs about $11,600. Many of us simply don’t have that kind of change just lying around. Thankfully, there are some excellent alternatives available to Florida homeowners! Take a look below to learn more.

If you can afford it, outright ownership of your solar installation comes with some definite perks. First, you’ll see a better return on your investment than with a loan or lease. Secondly, as the sole owner of the installation, you are eligible to receive all available financial incentives, including the federal tax credit, state sales tax exemption, and state property tax exclusion. These tax incentives drop your installation price by over 30%! That’s a sweet deal! Keep in mind though that with ownership comes the responsibility to maintain, repair, and monitor your installation. Solar is fairly hands-off. There are no moving parts, and major equipment like the panels and inverter comes with long-term warranties, so maintenance responsibility isn’t really something you should worry about. It’s just something you need to be aware of.

Leases

Leases and power purchase agreements (PPAs) are two very popular types of third-party ownership for residential solar. With leases and PPAs, solar installers provide the initial funds to install the solar system and homeowners are required to pay little to no upfront costs. To the homeowner, leases and PPAs look very similar – you pay little upfront and then pay off the installation in monthly increments over 20 years.

The state of Florida is one of the very few states in the United States that outlaws third-party ownership of solar. Utilities are the only businesses that are legally allowed to sell electricity.

Legalizing solar leases was one positive piece of Amendment 1, the solar amendment that was thankfully voted down by Florida residents during the 2016 election. Why, you ask? Most in the solar industry agree that legalizing solar leases would be a huge step forward for the state’s solar, but the amendment also included provisions backed by utilities that would’ve allowed them to charge solar customer more money. The solar industry ultimately breathed a sigh of relief when the amendment didn’t pass.

More: Solar Leases

Loan

Loans are becoming increasingly popular to finance residential solar installations. They give the benefits of ownership (higher financial savings than with leases and eligibility for financial incentives) while not requiring the high initial investment. The financial savings of a loan-financed solar installation depends greatly on the size and total cost of the installation as well as the loan details like interest rate, fees, and loan term.

Banks, credit unions, third party solar financiers, and even utility companies will offer loans for solar installations. Oftentimes solar installers will have a preferred lender they work with, so if you’re interested in taking out a loan for your solar installation, go ahead and start talking to a few different installers to see what options are available in your area.

There are also a handful of utilities throughout Florida that offer solar loans with low interest rates, including:

  • The City of Tallahassee Utilities offers 5% interest loans up to $20,000 to residential customers for a variety of renewable and efficiency measures, including solar installations, home insulation, and high-efficiency air conditioners.
  • The City of Lauderhilll’s Revolving Loan Program mainly provides small loans for high-efficiency appliances like dishwashers and washing machines, but solar installations are eligible as well. The maximum loan amount is capped at just $2500 – likely lower than your solar installation’s total cost – but the loans are interest free for the first two years! If you live in the area and are eligible for the loan, take advantage of this incredible offer from the city to at least partially pay for your installation.
  • The Solar and Energy Loan Fund, a non-profit solar and energy efficiency financier, has partnered with the Orlando Utilities Commission, St. Lucie County, and the City of Orlando to offer unsecured loans to local residents for solar installations. Interest rates range from 7% to 9.5% and the loan can last between 3 and 7 years. These interest rates are fairly high, so make sure the financial savings are there before signing the agreement.

More: Solar Loans

PACE Financing

PACE (Property Assessed Clean Energy) financing is a fairly new –and exciting – way to finance solar installations that is currently available to Florida homeowners in certain cities. Through PACE, local governments provide financing for solar installations for homeowners and/or businesses, who then repay the installation costs through assessments on their annual property tax bills.

The city of Berkeley, CA, began the first solar PACE program in the 2000s, but unfortunately this financing type has been mired in controversy since it began, mostly revolving around property liens and who would be paid first – the PACE financing or the home loan- if a homeowner defaults on her mortgage. The struggle culminated in Fannie Mae and Freddie Mac publishing a notice refusing to issue mortgages to homes involved in the PACE program.

Since that tumultuous time though, Fannie Mae and Freddie Mac have jumped on board the PACE train and have agreed to work with homeowners with PACE financing as long as certain criteria are met. With these roadblocks cleared, PACE has grown across the country and Florida is one of the first adopters for residential solar!

PACE financing offers some really excellent advantages to homeowners. First, there is no large upfront payment required like a cash purchase. Secondly, unlike a lease or loan that is tied to the homeowner, PACE financing is tied to the home address, so the trouble of transferring a lease or PPA agreement to a new homeowner (which can sometimes get messy), is a non-issue! The local government typically ensures low interest rates and long terms, so going solar is easy and cost-effective.

To offer PACE financing, local governments partner with organizations that provide funding and can run the program on their behalf. There are currently three PACE organizations in Florida, each working in different areas:

  • Residents in the certain cities in the counties below can secure PACE financing through The Ygrene Energy Fund and their local government. Be sure to check Ygrene’s website to see if your city is on the list!
    • Alachua County
    • Broward County
    • Charlotte County
    • Marion County
    • Miami-Dade County
    • Orange County
    • Palm Beach County
    • Pasco County
  • The Florida PACE Funding Agency, an organization originally created to facilitate PACE financing in the Kissimmee area, has grown in size and now runs PACE programs throughout Florida, including:
    • Fort Meyers area
    • Fort Lauderdale area
    • Ocala area
    • Gainesville area
    • Pensacola area
  • RenewPACE also offers PACE financing through local governments to homeowners in certain cities in the following counties.
    • Alachua County
    • Broward County
    • Charlotte County
    • Indian River County
    • Levy County County
    • Martin County County
    • Miami-Dade County
    • Orange County
    • Palm Beach County
    • Pasco County

Comparison of Savings for Different Financing

We’ve compared the financial savings from the different financing options to help you decide what makes the most sense for you. Using Florida-specific industry averages for cost, we compare the savings between financing with full cash upfront and through loans.

How We Find our Savings

We looked at financial savings of an average-sized 5 kilowatt installation over a 25 year period. To compare the cost of going solar to utility rates, we used the state average of $0.1139 per kilowatt-hour with an annual increase of 3.5%. We also assumed a 0.08% decrease in the production of the solar panels each year, to account for degradation of the panel components (a standard allowance, as solar panels produce a little less electricity each year they are installed).

For our financial savings calculations with a solar loan, we used 12 year term with 5% interest, a fairly standard loan agreement for solar.

Total Savings: $10,000 to $18,000

First off, no matter the financing type, you can save $10,000 to $18,000 over 25 years by going solar in Florida! If you’re looking for the absolute best savings, cash upfront is the way you’ll want to go. For an average-sized installation, you can expect to save about $17,844 over 25 years!

If you don’t have enough cash to fork out for a solar installation, you can still almost $11,000 with a solar loan. Keep in mind though that when financing with a loan the total financial savings will vary by interest rates. Higher interest rates will see lower savings. At the end of the day though, even with a higher interest rate, you’ll still be realizing thousands of dollars in savings – all with no upfront payment!

Payback Time: 12 to 18 years

Payback time is the amount of time it takes to recoup your investment. In the solar industry, a payback time of 5 to 10 years is considered excellent to very good, and 10 to 15 years is considered average. Over 15 years is quite a long time to wait to recoup your investment….

For cash purchase, payback time for Florida solar hovers around 12 years. Certainly not the best, but the longer payback is no surprise considering the real lack of any financial rebates to decrease the total cost of installations.

With a 5% loan, the payback period jumps to 18 years. That seems like a long time – and admittedly it is – but once the installation is paid off, you’ll be enjoying your renewable, no-cost electricity!

#3 Solar Policy Information

Florida has some very supportive policies for residential solar. In fact, they’re some of the best in the southeast, if not some of the best in the country! On top of all this, the state sees sunny skies perfect for producing good, clean energy. It’s no wonder SolarCity, the largest solar installer in the country, just decided to start working in the state in December 2016.

Net Metering

Florida has fantastic net metering policies that are very similar to other pro-solar states. The law, passed at the same time as the interconnection guidelines, requires investor-owned utilities to offer customers net metering incentives for residential solar installations by providing full retail credit for any excess electricity produced by the installation. Homeowners accumulate net metering credits over the course of the month and the credits roll over month to month. At the end of 12 months, homeowners can cash out their credits at the utility’s avoided cost, which is typically based on what the utility pays for the electricity they produce. This is usually only a fraction of retail cost, but, hey, cash is cash!

The best part about these net metering incentives? They’ll be around a long time, as the law makes no provision to phase out the incentives as more people install solar (a common tactic in other states). So no matter how many people install, these incentives will always be in place!

Through passing these net metering rules, the state of Florida allows you to save even more money over the life of your installation.

More: Net Metering

Interconnection Rules

The State Ensures an Easy Interconnection Process

Interconnection is the process to connect your solar installation to the electricity grid, usually involving an application to and approval from the utility. As you can imagine with utilities involved, this is sometimes a slow and arduous process for homeowners. Utilities need to keep tabs on how much electricity is going into the grid so they can better plan for the future and ensure their infrastructure isn’t overburdened (and potentially cause blackouts). To this end, pretty much every homeowners across the country, regardless of the state they live in, must receive approval to connect to their installation to the utility grid. In some states, there is a long, long wait before your installation can get up and running – a few years ago, Maryland homeowners going solar had to wait more than 2 ½ months for approval from their utility Pepco!

Solar Access Rights in Florida

Over the past 5 years, solar access rights have become an increasingly important issue across the country. More and more situations have popped up where solar homeowners have had to defend their right to go solar and even their right to sunlight.

Sound crazy? Well, imagine that you want to install solar panels on your roof, but your Homeowners Association doesn’t like the look of rooftop solar and denies approval for your installation? What recourse do you have to continue moving forward?

Imagine still yourself in a situation where you just spent $15,000 on beautiful new solar panels. The next day, your neighbor, unaware of your solar panels, plants trees that block the sunlight from hitting your panels and your energy production drops to almost nothing in an instant! What do you do? Ask her to remove the trees? What if she says no? Sue? Call the police? What if you installed your panels while the trees were just little saplings, but 10 years later they’re shading your installation and your production drops?

All of these situations have been experienced by homeowners across the country and many pro-solar states, seeing renewable energy as more important than the aesthetics of a neighborhood, have passed laws protecting solar installations as well as access to sunlight.

In 1978 (and amended a couple times since then), Florida passed a law making it illegal for HOAs to block approval of rooftop solar installations. This is great news for Florida homeowners. In other states, homeowners aren’t so lucky and HOAs can deny rooftop solar. The Florida solar law does allow HOAs to request that homeowners move panels from a visible front portion of the house to the back if, and only if, the change doesn’t affect the installations’ energy production – a fairly standard allowance in other states as well. If you’re going solar in Florida, no need to worry about your HOA. Some can be finicky or picky, but in the end they cannot block your solar installation!

Shading issues on the other hand, are a bit more nuanced. There are currently no laws in Florida protecting the ‘right to sunshine’ for solar homeowners. If your neighbor plants a tree that blocks sunlight from hitting your solar panels, even if they planted the tree after you installed your solar system, you have little legal recourse to make them trim or remove the offending trees. Florida courts typically sides with whoever is acting in accordance with state property rights, so if your neighbor isn’t doing anything illegal on his property (planting trees is legal, after all), there’s not much you can do about the shading since it’s his legal right to plant trees on his property.

Other states have solar access laws protecting the ‘right to sunshine’ for solar homeowners. After a 2008 lawsuit in northern California, state lawmakers passed regulation giving solar homeowners the power to force neighbors to cut or trim trees shading their installation if the trees were planted after the panels were installed.

The best course of action for Florida homeowners going solar is to intelligently plan were to install solar panels, taking into account the height of any nearby trees over the next 20 years. Just as important, having good relationships with neighbors allows you to find solutions peacefully and amiably if any issues arise. For more information on solar access laws, check out our article Stop Shading My Solar Panels! Solar Access Rights in the US.

Renewable Portfolio Standards

Renewable portfolio standards (RPS) are an important driving undercurrent of solar adoption and lawmakers in many states like California and New Jersey have adopted RPSs, which set a goal for how much energy in the state must come from renewable sources by a certain date. Colorado, for example, set a mandate in 2004 that 30% of all electricity generated by investor-owned utilities must come from renewable sources by 2020. Hawaii has set a goal of 100% renewable energy by 2045! RPS mandates force utilities to adopt and encourage renewable energy much faster than they would otherwise do naturally.

Unfortunately Florida has yet to adopt any RPS goals for any sort of renewable energy. It’s actual quite amazing the solar industry is so large in the state without these mandates! If they really want to push the solar industry forward, Florida needs to look into adopting mandates like so many other states have. RPSs encourage the solar industry to expand and drive forward, which can lead to lower prices for homeowners as installers become larger, more efficient, and more streamlined.

The state of Florida has setup some great policies to encourage homeowners to go solar in the state. These policies ensure a quick installation process as well as fantastic net metering rates. Remember though that policy is just one part of the equation. Read on to learn about solar incentives in Florida.

Thankfully, in 2008 the state of Florida passed interconnection rules that make it easy for homeowners to apply for and receive interconnection approval. The state created a three tiered system, based on the size of the installation, with each tier having its own interconnection rules:

  • Tier 1: Solar Installations under 10 kilowatts. Unless your installation is extremely large, most homeowners fall into this category. The application process is straightforward – homeowners aren’t required to pay application fees and no study is needed to assess the impact the installation will have on the electrical grid (large scale solar installations typically require this assessment).
  • Tier 2: Installations between 10 kW and 1 MW. Homeowners installing large systems on their roof will likely fall into this tier. As a safety precaution, the state requires installations larger than 10 KW to have an external safety disconnect installed along with the rest of their installation – a requirement that can be found in other states as well.
  • Tier 3: Systems over 1 MW. These are mainly large-scale commercial installations. Most homeowners don’t have the need or space for an installation this large.

All installations must be inspected by the city or county for safety – an extremely common requirement across the country.

These tiers only apply to investor-owned utilities like FPL and Duke-Progress. The law does require municipal utilities and electric cooperatives to offer standardized net metering and interconnection, but doesn’t explicitly address how these organizations should go about this process. No matter your utility, if you’re looking to go solar in Florida, the interconnection process should be easy, simple, and relatively fast.

#4 Financial Incentives, Rebates, and Tax Credits 

Florida has some excellent policies to encourage the growth of solar, including streamlined interconnection processes as well as guaranteed net metering incentives for customers of investor-owned utilities like FPL.

Unfortunately, all those great steps forward are weighed down by the state’s serious lack of financial incentives for solar. While Florida does offer a sales tax exemption and property tax exclusion for roof top solar, the state doesn’t offer any rebates themselves nor do they mandate utilities to offer them, as in other solar-friendly states like California and Oregon.

If you’re looking to go solar in Florida, you’ll have to eke out as much savings as possible, though with the 30% federal tax credit that’s not too hard.

Federal Tax Credit

All homeowners across the country who install solar are eligible for the federal residential renewable energy tax credit. This tax credit is equal to 30% of the total installation cost and goes to the owner of the installation (so if a homeowner leases the installation or finances through a power-purchase agreement, the credit goes to the installer-though they usually pass these savings on indirectly through a decrease in homeowners’ monthly bills). Originally the tax credit was supposed to phase out at the end of 2016, but lawmakers extended the credit to the end of 2019, which then decreases to 26% until 2021, and 22% until 2022.

Unlike tax deductions, tax credits are a dollar-for-dollar reduction, so in essence homeowners who purchase their installation through cash or loan enjoy a 30% discount on their installation! Homeowners apply for the credit when you fill out your next tax return.

Florida Solar Rebates (or lack thereof)

Seeing the importance of encouraging growth in solar, many states mandate that utilities, or at least investor-owned utilities (as opposed to municipal utilities or cooperatives) must offer some form of financial rebate to homeowners going solar.

For example Energy Trust of Oregon, the state-wide organization that provides rebates for renewables and energy efficiency, offers up to $0.60 per watt to residential customers of local investor-owned utilities (the organization is funded through fees on customers’ bills of local investor-owned utilities).

Through Energize Connecticut, an organization similar to Energy Trust of Oregon, Connecticut homeowners going solar can receive rebates equal to $0.40 to $0.51 per watt for going solar.

These incentives add up to a lot of savings for homeowners. Even at $0.40/watt –the lower end of the spectrum- a homeowner installing an average-sized 5 kilowatt system knocks $2000 of her total installation cost!

For all those homeowners in Florida though, you’re unfortunately not so lucky. There’s currently no state-wide solar rebate program. In fact, there’s only one solar rebate program in all of Florida! This goes to the City of Longwood, which provides rebates for a variety of efficiency and renewable energy upgrades to homeowners. Through the Raising Energy Efficiency Program, the city provides 10% of the project cost, up to $500.

That’s a fraction of the rebates in other solar-friendly states, but we still give mad props to the City of Longwood for being a shining beacon in an otherwise dark state (at least in regards to solar rebates). And as a bonus, homeowners can apply for this rebate once a year, so if you want to install efficiency upgrades after your solar (or vice-versa), go for it!

Sales Tax Exemption for Florida Solar

One thing Florida has done right in regards to solar incentives is the sales tax exemption, which allows homeowners to save hundreds of dollars at the outset of the installation.

Passed in 1997 as a three-year financial incentive, legislatures made the bill permanent in 2005. The exemption is for the hardware and equipment for the solar installation (so labor costs aren’t exempt), including the solar panels and inverter, but also the mounting hardware, electrical conduit, wiring, and even the nuts and bolts. In the future, as solar with storage becomes more common, solar batteries are also exempt from the purchase! The state publishes a list of installation components that are sales tax exempt as well as a form that homeowners can show their installer to document the exemption.

The state typically charges a 6% sales tax, so you can see big savings when you take advantage of this incentive! According to the National Renewable Energy Lab’s 2016 benchmark of costs in the solar industry, in an average-sized installation of 5.6kW the cost of the solar panels, inverter, and hardware equal about $1.25 per watt, totaling $7000. So, in this example, the sales tax exemption would save homeowners $420! (6% of $7000)

Property Tax Exclusion for Florida Solar

In the same vein as the sales tax exemption, the state also provides a property tax exclusion for 100% of the added value a solar, wind, or geothermal installation brings to the property. As an example, if your home is worth $140,000 and you install a $20,000 solar system on your roof, your property tax is still only based on $140,000, not the total $160,000 value of your property.

Compared to the sales tax exemption, this is a relatively new incentive, with the state legislature only passing the bill in 2013. The value of this tax exclusion obviously depends on the size of your installation as well as the market value of your home, but stands to save homeowners quite a bit of money.

Even with Florida’s poor record in regards to solar incentives, homeowners can still knock thousands of dollars off the initial price of the installation by taking advantage of all the federal and state tax credits, exemptions, and exclusions.

Consensus

Going solar in Florida is a smart choice to save money and contribute to a healthier environment, but you need to make sound decisions towards financing to ensure you see the financial savings you expect. Choose your financing wisely and take advantage of every tax incentive you’re eligible for! If you do that, you’ll be sitting pretty with a beautiful solar system that helps both the planet and your wallet!

Photo Credit: Flickr via CC License

Buying Solar Panels in Tampa, FL

solar-panels-tampa-florida

Going Solar in Tampa, Florida

If you are living and looking into solar panels in Tampa, FL then you are no doubt aware that your state is called the "Sunshine State" with good reason. In fact, you are usually able to enjoy up to 244 days of sunshine each year!

With all those golden rays coming in, it's no surprise that you are interested in installing a solar panel system on your roof to invest in the free energy available to you. Solar systems represent a great investment for your home, community, and nature itself and this opportunity is ready for you in Tampa!

Unfortunately, there are a few obstacles that you will have to deal with while living in Florida and due to the mixed bag of policies in the state, we currently rank it a solid 'C' compared to other states in the US. You will come out way ahead in some areas, but some financial opportunities will be closed to you as well. Let's find out what we're dealing with.

#1 Overall Solar Grade: Tampa, Fl

C Overall State Grade
12 years Avg. Payback Time
3.54 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$17,844.22 Your Net Profit Over 25 Years (Cash Purchase)

* 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). 

#2 Options for buying solar panels in Tampa

There are a few options for buying or otherwise getting access to solar panels in Tampa and we will look at the pros and cons for each method.

Although it is impossible to tell you exactly how much your system will cost to purchase and install, we can look at sources like the Solar Electric Power Association and the National Renewable Energy Laboratory to get an average cost of $16,600 for a typical home-sized 5-kilowatt system. This size is a good balance between the savings you’ll generate and the costs you will have to cover in order to install it, assuming that you are getting good productivity! We will use this cost to show upfront costs and expected returns on your investment into solar energy.

Remember, this cost is also before any financial incentives such as rebates or tax savings (such as the Federal Tax Credit that knocks off 30%). So, how long would it take to pay off your system? When will you start making some free money by selling energy back to your utility? Which payment method should you choose?

These are all great questions, but to answer those questions let’s look at why solar panel systems are considered an investment. The lifespan of a typical solar panel system is about 25-40 years and it will be producing free energy for your home over this time period.

We’ll take the conservative estimate and say that buying a solar system is like making an upfront investment in the next 25 years of your home’s energy. The “return” on this investment is all of the money that you are saving by not paying the utility company for energy production. Your returns will also improve from any extra energy that you are able to produce and sell back to the utility (more on that later!).

Cash upfront

Cash is king and there is always an argument to buying something outright with cold, hard money.

Paying cash avoids any type of interest payments, for instance, and it will possibly allow you a little more flexibility with your installer depending on the situation. Financially, however, it might not always make the most sense to pull out $14,560 from your pocket upfront when there are other options available.

Let’s check out how it would work.

Using cash, you will be pulling out $16,600 up front for your system during your first year. This is obviously a big down payment. When you file your taxes for the year you purchase your system, however, you will be able to take advantage of the 30% federal tax credit for $4,980 and you will have also saved about $843.54 during that first year in reduced energy costs for a combined total savings of $5,823.54!

We’ll talk more below about how we can determine the energy savings you will see with your system. The beauty of solar is that your system will produce about this much energy each and every year over its lifetime, but the cost of generating that energy stays the same (nothing except for maintenance).

The energy that you would normally be using from your utility company, however, ordinarily increases each year. As a normal customer of your utility company, you might not be paying a whole lot of attention to the details of your energy bill, but your costs each year can rise substantially and you will have no choice but to pay the utility company what they are asking.

You see, utility companies are often granted monopoly rights by the state and that means that there is very little flexibility when it comes to changing companies unless you are willing to move to another part of the state. Although Duke Energy does not currently service the Tampa area, they recently raised their rates by 48% over a 10 year period. Wow.

Looking back at the cash method, your system will usually pay itself off in around 12 years and you will see $17,844.22 (total savings on electricity – total system cost) in income from your system over its lifetime!

Leases

Leasing is an option that has surged in popularity across the US as companies have recognized that there is a huge market for making solar affordable to those that wouldn’t ordinarily have the means to pay cash or finance a loan for their system.

Unfortunately, the state of Florida does not currently allow leasing. Don’t worry though because leasing may be the cheapest option up front, but there are less long-term benefits to this method.

More: Solar Leases

Loan

Due to the simple fact that you are using someone else’s money to invest in your solar panel system, taking out a loan can represent the best option for a lot of people looking to take the leap into solar.

Obviously, financing is not usually the tool of choice when someone is looking to make money in the long run, but due to the nature of rising utility costs, the math can actually work in your favor.

Let’s use the $16,600 from the cash example. Let’s also assume that you are using a 15-year home equity line of credit (HELOC) or any other loan source that has a 5% or less interest rate.

Remember that even though you are taking out a loan to finance your system, you still have access to the 30% tax credit because you are the one doing the financing. So you will actually be taking the loan out for $16,600, but you will be getting back $4,980 when you file your taxes for the first year. See, you’ve already made money!

The rub to this method comes down to the loan payment. Due to this payment, you will actually end up spending about $61 per month for solar in your first year. We can find that number by taking your total loan payments (about $1,575) and subtracting your energy savings (about $843.54).

Btw, you can use just about any loan calculator to come up with these numbers for yourself.

Because your utility bills typically increase each year, however, you’ll end up paying less and less for your system as the years go by. Your loan payments and the percentage of energy covered by your system stays the same each year while the amount of energy you are saving is worth more and more. After your loan is paid off in 15 years you will actually start to see savings north of $1,000 per year from your system until the end of its 25-year lifespan.

In this scenario, you’ll be generating about $10,815.22 in net savings from your system over its lifetime, but you never paid any of your own money up front!

More: Solar Loans

#3 Solar Policy Information

Here we discuss some of the larger policy issues related to solar in Tampa, Fl.

Renewable Portfolio Standard

The Renewable Portfolio Standard (RPS) is basically the overall energy policy that determines how much energy is required (if any) to be produced by renewable sources such as wind, biomass and solar. If the state is interested in developing renewable energy, this policy gives them an opportunity to force the state utility companies to start developing energy production.

Unfortunately for those of you living in Tampa, Florida does not currently have any type of renewable portfolio standard. Not having an RPS means that there is no incentive for the major utility monopolies to lift a finger to help grow renewable energy sources in the state and it is up to smaller companies and individuals to help lead the movement for solar energy in Florida. There is no reason to give up hope without an RPS, but it is certainly encouraging to see official support from your government.

Electricity Prices

On average, Floridians pay about 11 cents per kilowatt-hour on their electricity bills which is actually two cents cheaper than the national average. Energy costs are important because these costs factor into how much your solar panel system will save you. If you are paying less than the national average, then you will be saving slightly less than someone else that has the same system as you do.

Don’t get discouraged by this fact, however, because no matter how low your costs are from your utility company are now you will eventually recoup your solar investment and start generating profit from it.

Don’t forget that utility companies tend to raise their rates by at least 3-4% per year and the electricity produced by your solar panels won’t cost you any more in the future. The math works out in your favor!

Net Metering

For anyone interested in powering their home with solar energy, net metering is something that you need to learn about immediately! Basically, net metering is a system that requires your utility company to monitor exactly how much power you are consuming from them while also checking to see how much power you are feeding back into the grid. You see, solar systems work by producing abundant energy during the daytime, but less at night.

What this means is that you might actually be producing more electricity than you need during the day while you use energy from your utility grid during the night. The other part of net metering, the best part, is that the utility companies must actually pay you a set rate for any energy surplus that your system provides to the grid!

Florida’s state net metering laws, set back in 2008, make it very easy to hook up to the grid to start gaining from these benefits because there is no maximum amount of people that can tie in. They will also roll your energy surplus forward for up to 12 months, at which point they will pay you for any excess. This is a win-win for those of you that have frugal energy lifestyles and want to help serve your community and the planet by providing clean, renewable energy!

More: Net Metering

Interconnection Rules

In Florida, the interconnection rules are a bit of a jumble between good and bad for any would-be solar installer.

Interconnection policies define exactly how customers are allowed to “plug in” to their local power grid and deliver power to the utility company from their home system. The good news for you is that the rules are actually quite simple for smaller, single-home systems. The rules state that larger systems have features such as external disconnect switches and they also make insurance mandatory on those systems.

For systems under 10kw, which should be pretty much anyone reading this article, there are no such requirements. Your single-home system will be very straight forward!

#4 Financial Incentives, Rebates, and other Tax Credits 

Some cities and states have really gotten behind solar in a big way, but unfortunately Florida is a bit of bad and good at the same time. In some ways, it seems like the state government really wants to open up the doors for solar and invite new customers to start paving the way to cleaner energy. In other ways, it looks like it is purposefully trying to close the doors. Just remember that local incentives are just icing on the cake for anyone interested in solar because you will be coming out way ahead once your system is paid off and you are able to reap the rewards of your investment.

Rebates

The only official statewide rebate program that has ever existed in Florida was the Florida renewable energy tax incentive program which has unfortunately been discontinued. Under this program, the state would reimburse individuals and companies for certain expenses related to renewable energy and even refund previously paid taxes for eligible equipment. The state government did not anticipate the demand for solar that its citizens would have and subsequently ran out of funding for the program. Who would have ever thought that the sunshine state wouldn’t be enthusiastic about solar?

Other Incentives

Unfortunately, there are no other incentives available to residents in Tampa, FL. One bright note, however, is that the local utility (Tampa Electric) does seem to make it easy to get your system connected and fully supports net metering. They also offer citizens without a solar system the ability to purchase “blocks” of renewable energy produced by the utility as a way to help the environment.

 

Federal Tax Credit

The big score for anyone interested in solar since 2005 has been the residential renewable tax credit. This credit allows for a 30% tax credit for any costs related to purchasing and installing a new solar panel system. This basically means that you can take 30% of the cost right off the top of going solar. Remember that you can qualify for this credit when you pay for the system with cash or a loan, but leasing the system means that your installer gets the credit.

Property Tax Exemption

Moving on to local property taxes, residents of Tampa will be pleased to learn that the state of Florida currently allows for a 100% exemption for any solar equipment that adds value to your home when assessing your tax bill. This is quite a financial windfall for you because the value of your home can actually increase up to $20 for every dollar of electricity that you are saving each year with your solar panel system.

The reason your home will increase in value with solar is that the cost of maintaining your home actually decreases when you go solar. Don’t worry about losing the value added to your home when the time comes to sell it though because you’ll be able to roll the value into the asking price.

Sales Tax Exemption

Continuing with the awesome tax trend in Tampa, sales tax is another area in which you will see a great incentive to go solar. If you purchase a system for your home, you won’t have to pay a cent of sales tax because the state offers a 100% exemption on the sale! This is basically equal to a 7% reduction in the cost of your system in Hillsborough county. If your system cost $14560, you are saving $1019 at the time of purchase.

General Increase in Home Value

As we touched on before, a solar panel system can definitely add value to your home. A recent study suggests that people were willing to spend up to a $4 per watt premium for homes with a standard-sized system. If you look at the math, it means that a 5-kilowatt system could add as much as $20,000 to your home. Considering that you won’t be paying any additional property taxes on this extra value in Tampa, it definitely looks like a win-win!

Conclusion

If you are currently trying to decide whether or not to purchase a solar panel system in Tampa, FL then my recommendation is that you strongly consider all of the wonderful benefits that are available to you in your state. Although there might not be the most direct incentives available to you, the tax credits, state tax savings and a strong net metering opportunity are all great ways to save money.

Don’t forget that you are in the Sunshine State and you are living in the third highest state in the country in solar potential! Also, we recommend that you contact a local qualified installer to get an actual solar estimate for your exact situation!

The best way to get started is by getting a solar estimate from a qualified solar installer in Tampa. Click the link below to get started!

Will Florida Ever Get Its Solar Energy Act Together?

We’ve talked about the problems plaguing Florida’s solar power before. Even with the building of a solar farm next to Walt Disney World, the Sunshine State has had trouble exploiting its abundant sunshine. According to the New York Times, they rank third in the nation for rooftop solar potential, but 13th in the actual amount of solar energy generated.

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Does Solar Energy in Orlando Mean Solar for Walt Disney World?

What could make the Happiest Place on Earth even happier? Why, taking advantage of all that sunshine in the Sunshine State!

Recently, Duke Energy Florida said in a press release they have received approval to build, own and operate a 5-megawatt solar facility that will serve the Reedy Creek Improvement District near OrlandoContinue reading

Florida Solar Group Looking to Make Solar Accessible

florida-map

We talked previously about how Florida is cutting back its solar targets. But a group of solar advocates are trying to make the Sunshine State live up to its name. ThinkProgress reports that a pro-solar conservative group in Florida reached enough signatures on a petition to make solar more accessible to consumers.

Florida for Solar Choice’s Petition

Currently, if a Floridian wants to purchase solar power directly from other consumer, they can’t. But Floridians for Solar Choice reached 72,000 petition signatures, which clears the way for the petition to be reviewed by the Florida’s Supreme Court. They’ll decide whether or not the petition’s language qualifies to be a ballot initiative for Floridians in the 2016 election.

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