Tag Archives for " solar policy "

Is Solar Panel Removal Possible?

solar-panel-removals

For anyone asking themselves ‘Is solar panel removal possible?’ read on as we explore common reasons, routes, and issues.

It might seem like solar panel removal would be a bit of a taboo topic in a community so heavily focused on renewable energy production, but the reality is that solar panels are just like any other piece of equipment attached to your home. Just like the occasional HVAC replacement, it’s entirely possible that you will need to remove your solar panels for one reason or another at some point.

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North Carolina Solar – All you need to know

north-carolina-solar

Information about North Carolina Solar Power

North Carolina has the 3rd most residential solar of all 50 states in the US, beating other very solar-friendly states like Colorado, New Jersey, and Massachusetts! No doubt the explosive growth in the state was due in part to North Carolina’s incredible 35% tax credit for solar - which unfortunately has been defunct since 2015 - but even today homeowners in the state can save upwards of $16,000 with North Carolina Solar!

Read on for more information on purchasing solar in North Carolina as well as relevant solar policy and incentives.

#1 Overall Solar Grade for North Carolina

C
Overall Grade
13 years Avg. Payback Time (For Cash Purchase)
0.7 % Cash Estimated IRR (Return on your investment on cash purchase over 25 years)
$16,787 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.

North Carolina is almost a trailblazer for solar in the southern states, paving the way for others to follow. They’ve been first-adopters of many policies typical of solar-friendly states like RPS goals, net metering, and solar tax credits.

While this is all great news, unfortunately many of these policies feel like legislators settled for ‘adequate’ instead of fantastic. For example, the state mandates that utilities must offer net metering to customers with solar - great! - but stops short of mandating that they must pay customers at the end of the year for any electricity put into the grid - not so good.

Even still, North Carolina earns a solid average for establishing a robust framework of solar policy and incentive that other southern states can look to as an example.

#2 Options for Buying Solar Panels in North Carolina

North Carolina homeowners currently have two options for buying solar: upfront cash purchase and loans, and a third financing method gaining momentum. Read on to see which makes sense for you!

Cash upfront

If you’re purely interested in financial savings, a cash purchase is certainly the way to go! Homeowners who install an average-sized 5-kilowatt solar system can expect to spend about $12,985 on the installation after receiving the federal tax credit, but save around $16,787 after 25 years!

Our estimates take into account both the slow drop in efficiency of the solar panels each year (0.08% decrease annually), as well as the increase in utility rates (3.5% annually), and a 25 year expected lifespan.

As the owner of the installation, you are eligible to receive all the federal, state, and local financial incentives, which can drop your cost even more. You’re also responsible for your system – if equipment breaks or your installation starts producing less power, it’s up to you to hire a technician to troubleshoot and repair. Keep in mind though that inverters and solar panels both have long term warranties, usually between 12 and 25 years, so your out-of-pocket expenses will remain low.

However, there is a catch to these high savings. While the federal tax credit and other incentives certainly take a huge dent out of the total cost going solar (more on that below), you’ll typically receive these incentives after the installation is complete, so you have to pay the entire bill upfront for your solar installation!

Bottom Line: Unless you’ve got thousands of dollars sitting in the bank waiting for investment, paying cash for your installation might be out of reach. If this is the case for you, take a look at solar loans.

Solar Loans

Loans offer a great way to purchase a solar installation while avoiding the high initial investment. Your financial savings over the life of the installation won’t be nearly as high as with a cash purchase due to the interest you’ll have to pay.

Many institutions now offer loans for solar installations including banks, credit unions, and even dedicated solar loan companies. With loans, the agreement term, interest rate, and fees all affect how much money you can save, so be sure to call around to a few different establishments to see what terms they offer. Solar installers often have a preferred lender as well, so it doesn’t hurt to reach out to a few installers!

Bottom Line: For the same 5-kilowatt installation above which costs $12,935 (after the federal tax credit), when you add a standard 15-year loan with 5% interest, you can expect to save about $11,289. Savings are about half as much as a cash purchase, but loans have the huge added benefit of not requiring any large upfront payment like cash purchases. For many homeowners, this might be the only option.

More: Solar Loans

Solar Leases and Power Purchase Agreements

Third party ownership is not allowed in North Carolina at this time.

More: Solar Leases

PACE Financing

PACE (Property Assessed Clean Energy) is an exciting new financing mechanism that is slowly growing in the US after it began in the late 2000s in Oakland, CA. With PACE financing, local governments foot the bill for homeowners’ solar installations (or other green home projects), and the homeowner pays back the ‘loan’ through an assessment on their property taxes.

PACE programs often see low interest rates and longer terms than conventional loans, which makes them a great deal for homeowners wanting to go solar. Besides, the loan is connected to the property – not the individual – so if you decide to move, the new owner simply continues to pay the loan off on their property tax assessment.

Seem like a good idea? It is! North Carolina homeowners might have to wait a little bit though. While North Carolina has passed legislation allowing PACE financing in the state (a huge first step in the process!), there aren’t yet any active programs.

Bottom Line: PACE will be a great option when a program is finally available! So be sure to call up your local city or county and tell them to look into it!

#3 North Carolina Solar Policy Information

Despite its status as one of the best states for solar, North Carolina lacks really strong, robust solar policies. They’re certainly better than many other southern states – which lack any pro-solar policy – many of the policies, like their net metering or solar access laws, feel unfinished. That leaves progressive cities like Asheville to fill in the gaps when proper statewide legislation is lacking (read on for more about this situation).

north-carolina-map

Renewable Portfolio Standard

Renewable Portfolio Standards (RPS) is a fancy phrase for when a state sets a goal that a certain percentage of all their electricity used in the state must come from renewable sources. California, for example, mandated that 50% of all electricity used in the state must be from renewable sources by 2030. Montana set a goal of 15% by 2015. As of early 2017, 29 states have adopted RPS goals (you can see a map of them all here).

In 2007 the state of North Carolina set a goal that 12.5% of electricity from investor-owned utilities must come from renewable sources by 2021, with a 10% goal for municipal utilities and electric cooperatives. The state even set a solar carve out but at a fairly low goal of 0.2% (interestingly, the same percentage that should come from swine waste).

The state’s RPS has been under fire for a while now, first in 2013 when lawmakers tried to repeal the bill, and more recently in 2015 when the state House of Representatives voted on a bill to freeze the mandate. Thankfully, that bit was removed before the bill passed.

As the only southern state to adopt an RPS, we can look to North Carolina’s RPS as a beacon for neighboring states to look towards for years to come – as long as it’s still in place.

More: Renewable Portfolio Standard (RPS)

Utility Rates

Utility rates affect how much savings you can see by installing solar. The higher your rates, the more money you can save! And as utility rates continue to climb across the country and solar installations decrease in price, installing solar panels becomes a better and better financial investment!

In North Carolina, the average utility rate in is $0.1178 per kWh according to the US Energy Information Administration. This is obviously much lower than Hawaii’s $0.28 per kWh (the highest in the country!) and even a little lower than the national average of $0.1245, though a bit higher than the regional average of $0.1170.

It’s safe to say North Carolina has relatively low utility rates. However, even with these rates, we’ve seen you can still save money going solar in North Carolina, much like homeowners in other solar-heavy states that also have relatively cheap electricity like Texas, Colorado, and Arizona (all of which are under the national average).

Net Metering

North Carolina also established net metering incentives in 2005 for homeowners connecting their solar installations to the grid. Any excess electricity you produce is credited to your next utility bill at the full retail rate (so if you pay $0.11 per kWh, you’ll receive bill credits worth $0.11 for each excess kWh you produce!).

If you’re on a time-of-use rate (TOU) like Duke Progress’ R-TOU Program, how credits are calculated is a little different. The excess electricity you produce during off-peak hours is used to offset your electricity usage during off-peak hours. That’s simple enough. If you produce excess electricity during on-peak hours, it offsets your on-peak usage. Also simple.

Here’s where it gets a little tricky. The excess electricity you generate during on-peak hours can go towards offsetting your off-peak hours (because on-peak electricity is more valuable than off-peak electricity due to the higher demand). In this same vein, excess electricity you produce during off-peak hours cannot go to offsetting any electricity you use during on-peak hours. Make sense?

Net metering in North Carolina unfortunately comes with one big downside. Unlike in other states like Florida, where homeowners are paid in cash for any excess electricity they have left over after 12 months, in North Carolina any additional bill credits you have left over at the beginning of the summer are forfeited – given to the utility with no compensation to you, the homeowner.

While in other states the payout isn’t much (maybe $0.02 or $0.03 per kWh), it’s really the principle of the matter – you created that electricity and pumped it back into the grid where others can use it. Wouldn’t you like to be compensated? To move the solar industry forward, North Carolina needs to step up their game and finish writing out this incomplete net metering program.

More: Net Metering

Interconnection Process

The process of receiving approval from the utility to connect your solar installation to their utility grid is known as the interconnection process. Utilities aren’t known for being a particularly hasty bunch, so as you can imagine, in the past this could be an arduous, frustratingly tedious process.

As more homeowners install solar, many states across the US have adopted standardized interconnection to ensure the process is as fast and painless as possible.

The North Carolina Utilities Commission initially adopted statewide interconnection standards in 2005 and subsequently revised them in 2008 and 2015 for customers of the state’s three investor-owned utilities: Duke-Progress, Duke Energy, and Dominion. The requirements for approval differ based on the size of the installation, breaking down into three tiers. For North Carolina homeowners, the only tier you’ll probably need to know is the very first tier, referred to as the Inverter Process.

The Inverter Process is reserved for installations up to 20 kW in size. As 20 kW is equal to almost 80 solar panels, the vast majority of residential installations fall into this category! Homeowners are required to pay a $100 fee for the interconnection application (as opposed to $250 or more for higher tiers), and utilities can require additional safety disconnect switches (typically installed on the side of the house next to your solar inverter) for a higher level of safety, but must reimburse homeowners if the installation is smaller than 10 kW.

Solar Access Rights with North Carolina Solar

The state of North Carolina protects homeowners’ right to install solar. First off, cities, counties, Homeowners Associations (HOAs) or other similar organizations can’t prohibit you from installing solar. That’s good news as in the past particularly crabby HOAs have attempted and sometimes succeeded in blocking homeowners installing solar.

HOAs and other organizations can force you to move your solar panels to another section of the roof if they are visible from common areas or areas open to the public. However, this is only allowed if the move doesn’t prevent the solar panels from working efficiently.

Unfortunately, the state’s protection doesn’t act retroactively to covenants already in place, so if the HOA regulations or covenants existed before 2007, they could pretty much do whatever they want.

If you live in Chapel Hill, the city adopted strict solar access rights laws in 2005, two years before the state-wide law! These laws are much stricter than the state laws and provide even more protection for solar homeowners:

Subdivisions shall not include covenants or other conditions of sale that restrict or prohibit the use, installation or maintenance of solar collection devices. (Article 4.6.7 from the above link)

Not only does the law mention installation, but also use and maintenance, all without any caveats in regards to visibility. Good job Chapel Hill!

More: Solar Access Rights in the US.

#4 Financial Incentives, Rebates, and Tax Credits 

North Carolina homeowners can take advantage of the federal tax credit and state tax exemptions to drop their installation cost even further.

Federal Tax Creditnorth-carolina-sunset

Any homeowner who purchases (either through cash or loan) and installs a solar installation is eligible to receive the federal renewable energy tax credit. This tax credit is worth 30% of your total installation cost, and if your tax liability isn’t high enough in a single year, you can break it out and claim portions over several years. The credit was originally meant to phase out at the end of 2016, but federal lawmakers extended the credit to 2019, at which point it drops to 26% until 2021, and then 22% until 2022 at which point it is phased out completely.

As you probably know, tax credits – unlike tax deductions – are worth a dollar-for-dollar amount, so it’s almost like receiving a 30% discount on your entire installation!

More: Solar Federal Tax Credit

State Personal Tax Credit (Defunct)

Until 2015, the state of North Carolina offered a Personal Tax Credit equal to a whopping 35% of the cost of the solar installation, with a cap of $10,500 for residential applications. Unfortunately, the incentive expired in 2015 and is no longer available. 

Property Tax Exemption

North Carolina homeowners can also take advantage of property tax exemptions for their solar installation. According to a memorandum from the North Carolina Department of Revenue in 2011, any residential solar installation that is not used to produce actual income is 100% exempt from property taxes. The memorandum explicitly states that homeowners who receive credits as part of a net metering program are exempt from property taxes for their installation, which is great news for solar homeowners!

If your utility does compensate you for your excess electricity, you are still exempt from paying 80% of your solar installation’s value, though as we saw in the net metering section above, utilities rarely pay residential customers for excess electricity in net metering programs.

So if you installed a $12,000 installation on your $200,000 home and only received credits from your utility, you’d only pay property taxes on the $200,000 value of your home, not the total value of $212,000!

City Permit Rebates

To make the process of installing solar even more affordable, one city and one county even offer rebates for the permitting fees. These rebates aren’t worth thousands of dollars, but money’s money!

As part of their Green Building Permitting Incentives, Catawba County Utilities & Engineering refund 50% of the total fee cost for photovoltaic solar installations (as well as solar water heating, geothermal heat pumps, and greywater or rainwater collection). Homeowners pay all permitting fees before the project then apply for the rebate after the installation is complete.

The City of Asheville also offers rebates on permitting fees for homeowners who install PV solar as well as thermal solar, wind, and geothermal heat pumps. Solar projects are eligible for a $50 rebate and homeowners must apply for the rebate once the project is complete.

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

What to do next?

So if you’re looking to install solar panels in North Carolina, you can expect to save up to $16,000 over the life of the installation – just be sure to choose the financing that fits your needs and take advantage of all the available incentives!

We hope you find this review of going solar in North Carolina helpful. Have any thoughts? Add them to the comments below!

Image Credits under CC License  via Flickr: 1 Pixabay: 23 

Florida Solar – Going Solar in the Sunshine State

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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

Solar Energy: Bridging the Party Gap

solar-panels-bridge-party-gap

As we’re getting closer to Election Day, it’s a good time to reflect. We see democrats and republicans (or at least two specific democrats and republicans…) seemingly at each other’s throats – name calling, bad mouthing, and generally being poor sports. At a time like this, when the political situation is somewhat dire and it looks like these two sides will never be able to agree on anything, there’s one topic that republicans and democrats, at least in the general public, agree widely on – solar energy!

Numerous polls have found that regardless of political leanings, all Americans simply love solar energy and want to see it expanded in the future. Polls in 2012, 2014 and now a recent Pew Research Poll in 2016 continue to have the same results – that people just love solar.Continue reading

What are the Best Solar Energy Stocks?

best-solar-energy-stocks

Interested in investing in solar energy stocks but you don’t if it’s a wise move?

How could an industry that is built on saving millions of homeowners thousands of dollars each not be a smart, successful investment?* While this statement is certainly true, as of fall 2016 stock prices for solar financing and installation companies are currently trading in the single digits. What is going on?

* Note that we are not financial advisors and this post is for entertainment purposes only!

The Solar Industry is Big Business that’s Growing Fast

Over the last 10 years, the solar industry has seen a veritable explosion, with year-over-year growth around 60% (compared to the average utility’s 13.4% annually increase in revenue from 2010-2015).  Large national solar companies that offer power purchase agreements (PPAs) and leases have been able to secure huge financing deals to cover these agreements, in which the solar companies recoup their initial investments in small monthly increments over the course of customers’ 20 year agreement.

In addition, the average price of solar panels has decreased a whopping 70% in that same time, further reducing total installation costs, leading to more and more homeowners making the decision to install solar.Continue reading

Trump vs. Clinton on Renewable Energy

Presidential candidates on renewable energy

It’s not surprising that Donald Trump and Hillary Clinton don’t see eye-to-eye on dozens of issues, but the 2016 election presidential candidates have adopted completely opposite renewable energy strategies.

Perhaps the best way to approach this issue is to start with Trump’s now-infamous 2012 tweet stating that global warming was “created by and for the Chinese in order to make U.S. manufacturing non-competitive”.

When Clinton made mention of this during this year’s first presidential debate, Trump interjected (in a fashion that ruled the entire event) – “I did not, I do not say that.”Continue reading

Cap And Trade VS Carbon Tax: A Political Perspective

Carbon tax vs cap and trade? It’s not the old approach to energy policy that is designed to fix – or to wreck – the climate.

Carbon tax is any kind of tax intended to make carbon emitters pay for the damage they cause to the environment by burning fossil fuels.

Cap and trade is a government initiative where “cap” puts a limit on the amount of carbon that is allowed to be emitted by companies, whereas “trade” refers to the process where companies can trade with their allowances in order to incentivize the reduction of pollution.

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Solar EV Program in Colorado: Huge Success!

nissan leaf solar ev

Solar EV: the first-ever promotion to bundle a solar roof with an electric vehicle by a coalition of municipal governments in Colorado during the last four months of 2015 was a huge success.

Colorado has innovated a marriage made in heaven: EV and PV

The program resulted in a sharp rise in EV purchases as more people were alerted to the powerful carbon-cutting synergistic relationship created by marrying rooftop solar to an EV in the garage. The Southwest Energy Efficiency Project (SWEEP) provided support.

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Australia’s Capital Canberra to go 100% Renewable by 2050

Regardless of which party is in power next in Australia, the seat of national government – the nation’s capital city of Canberra – is going 100% renewable.

The ACT government’s plans; the most ambitious in Australia, are to completely divest from fossil fuels and fully decarbonise the territory’s electricity system.

Canberra’s ambitious 100% renewable plan has very high support from Australians, according to researcher and campaigner Tom Swann.

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Wisconsin Judge Rejects Controversial Solar Surcharge

wisconsin solar

A ruling by a Wisconsin circuit court judge reverses a controversial solar surcharge that would have made solar power more expensive for consumers.

We Energies is Wisconsin’s largest public utility, and provides electricity and natural gas to 4.4 million customers across four states. In December 2014, they proposed a $4 monthly flat rate increase in addition to a per-kilowatt-hour electricity rate increase for all customers. The fee hike was approved by Wisconsin’s Public Service Commission and was set to take effect in 2016, but the solar industry quickly joined together and filed an appeal to block its implementation.

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