When Pete Wilking founded A1A Solar in Jacksonville in 2010, the rooftop solar industry was still in its infancy. Just three years later, the company was "very financially viable."Then Jacksonville's city-owned utility company in 2018, reducing the amount it reimburses solar customers for excess power. That change doubled the amount of time it takes for solar owners to recoup their investment. Demand soured, and Wilking was forced to lay off 25 people, about half of his full time staff.
JEA says it changed the policy to keep regular customers from having to subsidize solar customers.
That's an argument that has gained political traction around Florida recently, although solar businesses and advocates say the small number of solar owners don鈥檛 have the impact utilities claim they do.
"When they鈥檙e making disingenuous statements, I think we need to be sure to call that out," said Alissa Schafer, a communications and research specialist for the (EPI), a national watchdog organization.
Schafer and others are worried that Florida's powerful investor-owned utilities are pushing regulators to scale back the state鈥檚 rooftop solar policy, as JEA did, or get rid of it all together. If successful, the rooftop solar industry across the Sunshine State could start to look a lot like it does in Jacksonville.
Net Metering
The Florida Legislature unanimously enacted a policy called net metering in 2008, requiring utility companies to reimburse, or offset, solar customers for excess energy generated. The state's investor-owned utilities were required to offer one-for-one net metering, meaning they had to reimburse solar owners at the same rate they charge other retail customers. City-owned utilities like JEA followed suit.
The policy helped solar grow in Florida by 10,000%, (SUN), a national solar advocacy nonprofit, although total numbers remained low.
When JEA lowered its net metering reimbursement rate from 10.3 cents per kilowatt hour to 3.25 cents, existing solar owners were grandfathered in. But for new customers, instead of the seven to nine years to recoup their investment on a solar system with a 35-year life, the time increased to about 20 years, said Wilking.
"That鈥檚 going to slow solar adoption," he said. "It's going to slow clean energy and we鈥檙e going to still be more reliant on fossil fuels."
, a Jacksonville-based homebuilder, also felt the effects of JEA鈥檚 solar policy change.
Initially, nearly every home the company built had rooftop solar panels. Thanks to , a TerraWise home with solar was less expensive than one without.
"[S]ay adding the solar to your house is going to raise your mortgage by $65. But then you鈥檙e going to save $75 a month on your electricity bill. So your payback was virtually immediate," Director of Operations Jacob Shacter explained. "Mathematically, it just made sense."
But not after JEA changed its net metering policy.
鈥淲e went from basically 100% solar to none overnight,鈥� Shacter said.
JEA, as a city-owned utility whose oversight comes from its board and City Council, didn鈥檛 need outside approval for the net metering change. But the state鈥檚 investor-owned utilities are regulated by (PSC), which sets the policy on net metering.
in 2019, calling it an 鈥渆ffective鈥� way to promote solar.
Not long after, a freshman legislator asked the commission to review the policy again.
鈥淟ow and middle-income families are paying more on their electricity bills than they should so their wealthy neighbors can have solar panels on their rooftops,鈥� , citing a familiar argument.
In response, to discuss net metering, in which the utilities argued that customers without rooftop solar were subsidizing those who had it.
The Cost Shift Argument
The state鈥檚 four major investor-owned utilities claim they鈥檝e paid $39 million in 鈥渟ubsidies鈥� for rooftop solar customers.
鈥淔or the average net metered customer, the subsidy they enjoy is about $75 to $80 per month,鈥� said Terry Deason, representing Florida Power and Light (FPL), Gulf Power Company and Tampa Electric Company (TECO).
He said the utilities project another $700 million in subsidies between 2020 and 2025, assuming rooftop solar adoption continues to grow significantly. While not advocating for a change in net metering at the meeting, he did say 鈥渁t some point, it needs to be addressed.鈥�
But EPI鈥檚 Schafer said those numbers don鈥檛 add up.
鈥淭he percentage of people that have solar on their business or on their home is so incredibly low, it鈥檚 ridiculous to imply that this is causing a cost shift,鈥� she said.
Rooftop solar adoption statewide today is only at .5% or around 60,000 customers. In Jacksonville, the percentage is similar, with 2,106 residential and 104 commercial customers.
FPL, Gulf Power, TECO and Duke Energy have paid a total of $1,193,160 to net metering customers since 2008, the utilities submitted to the PSC last year. .
A from the Lawrence Berkeley National Laboratory at the University of California found the effect of net metering reimbursements on retail prices to be 鈥渘egligible for the foreseeable future.鈥� published this month suggests that homeowners with rooftop solar are actually subsidizing their neighbors who don鈥檛 have rooftop solar.
Solar United Neighbors was also impacted by JEA鈥檚 net metering change. They . A solar cooperative (or co-op) is a group of homeowners who come together to qualify for a bulk discount.
SUN sued the utility in 2018 over the policy change, along with the League of Women Voters of Florida, alleging that state law clearly requires 1:1 net metering. JEA maintained the reimbursement is not specified.
A judge granted JEA鈥檚 motion for summary judgment, but the group has appealed and is awaiting a decision that could come any day.
An attorney with Earthjustice, the law firm representing SUN, said there鈥檚 more than one way to change the net metering rule.
鈥淚f the legislature repealed the net metering requirement, you would see many utilities push for a policy similar to JEA鈥檚, and as a result I think you would see solar installations by customers really plummet as you鈥檙e seeing in Jacksonville,鈥� said staff attorney Bradley Marshal.
No legislation has been filed as of yet for the March session, although the deadline isn鈥檛 until February 26, 2021. Even if nothing comes out of the legislative session, a policy change could be sought through the PSC.
Follow The Money
Advocates also have been following campaign funding closely. EPI鈥檚 Schafer worries the flow of money might hint at what鈥檚 to come.
During the fall 2020 election cycle in Florida, investor-owned utilities donated more than $9.2 million to candidates and their political committees on both sides of the aisle,
That鈥檚 far more than they鈥檝e paid out to net metering customers since the rule was adopted in 2008, Schafer said.
鈥淔lorida utilities, like Florida Power & Light, have spent tens of millions of dollars to craft and preserve a political environment that delivers exactly what the power companies and their investors want, from our city commissions all the way to our legislature and Public Service Commission,鈥� said Schafer.
And advocates like Schafer are watching more than just dollars; they鈥檙e also looking at political appointments.
Former legislator Michael La Rosa applied to be a member of the PSC in June and, , just days later he transferred $50,000 from the political committee he controls, , to the fund used to elect Republicans to the state Senate 鈥� the body that would eventually confirm La Rosa鈥檚 appointment to the PSC. in as the PSC鈥檚 newest member last month.
For most of its 130-year history, the PSC was a three-person elected body. In 1978, it was expanded to a five-member appointed commission. Integrity Florida, a nonprofit research institute and government watchdog, has , meaning state politicians have 鈥渃onsiderable influence鈥� on it.
Another notable recent change was at (OPC), which provides legal representation for residents in utility related matters. , J.R. Kelly, who was the head of that office for 14 years, was effectively forced out last year when Sen. President Wilton Simpson 鈥� a top recipient of utility contributions, with his political committee Jobs For Florida accepting $220,000 鈥� successfully pushed legislation to impose a 12-year term limit on the position.
In the past, the OPC has viewed rooftop solar as an 鈥渋mportant part鈥� of Florida鈥檚 future energy mix. Kelly himself fell 鈥渟omewhere in the middle鈥� of current net-metering arguments, meaning he supports reimbursement but not necessarily at the 1:1 ratio solar advocates want.
The position of Kelly鈥檚 successor, Richard Gentry, is not yet clear, although he spent the last year lobbying for the utility-backed nonprofit .
Florida鈥檚 Solar Future
Utility scale solar is expanding rapidly in Florida and across the country. JEA has installed 8 solar farms over the past decade and has plans to build five more. Once all of those are online, they will produce enough renewable energy to power about 62,000 Jacksonville homes, or about 15% of JEA鈥檚 customers.
JEA declined to be interviewed for this article, citing the ongoing litigation, but said in an email they believe utility-scale solar is more cost efficient than rooftop.
But even with that rapid expansion, scientists and environmental activists say it鈥檚 not nearly enough to avoid the worst impacts of climate change. So does JEA 鈥� which is under new management and a new board after 鈥� plan to reinstate 1:1 reimbursement for net metering customers?
鈥淭here are no plans to change the policy as it currently stands because it equitably spreads the associated costs among JEA鈥檚 customers (solar and non-solar) dependent upon the electric grid,鈥� said Media Relations Coordinator Simone Garvey-Ewan.
A1A Solar鈥檚 Pete Wilking says that Florida鈥檚 rapid growth, plus the increase in electric vehicles, means there will be plenty of demand, and it only makes sense to use existing space, like rooftops, for solar expansion. But he鈥檚 concerned about his industry鈥檚 ability to compete in the political realm.
鈥淟ittle guys like us, we don鈥檛 have big coffers to give massive campaign donations to lawmakers. We just don鈥檛 have the resources,鈥� Wilking said. 鈥淭he biggest problem right now is that utility companies don鈥檛 know how to morph their business model to nicely accommodate rooftop solar. That鈥檚 where the rub is right now.鈥�
This story was originally posted on .
Brendan Rivers can be reached at brivers@wjct.org, 904-358-6396 or on Twitter at .
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