Florida legislators recently passed HB 741, which sets a timeline to end net metering in Florida.
It would be a major blow to the state’s rooftop solar industry.
Net metering, according to Florida Power and Light, is when “customers who connect approved, renewable generation systems such as solar panels to the electric grid” can “buy and sell electricity to FPL.”
In other words, it’s a way for residents to lower their monthly electric bills.
HB 741 reduces the credit from 75 to 60% for applications approved from Jan. 1, 2026, to Dec. 31, 2026. For applicants approved from Jan. 1, 2027, to Dec. 31, 2028, the credit amount on their bills drops an additional 10 points, down to 50%.
While the bill includes a 20-year grandfather clause for solar power implemented before 2023-2024, locking in the total retail rate for two decades, a recent Mason-Dixon poll shows that 84% of Florida voters support net metering — an overwhelming majority are in favor of finding alternative solutions to cut utility costs, which is something state legislators limit with this bill.
Rising energy costs
Utility costs are rising nationwide because of spikes in energy prices and inflation. During the usual economic ebb and flow, a 3% spike in rates can be expected annually. Some utility companies throughout the country are planning a 15% increase over the next two years.
According to a Jan. 2022 report from the U.S. Energy Information Administration, increasing costs for power generation fuels, especially natural gas, pushed electricity prices higher in the second half of 2021. Constraints on electricity supply because of cold weather in the central United States also created price spikes in February 2021.
Action needs to be taken to mitigate these rising energy costs.
Banding together in Florida
With diminishing returns on solar tax credits for individuals, Florida’s 67 counties and hundreds of municipalities can band together to offset the impact of these rising costs.
Through the Florida Buy State Cooperative, local governments work in concert with one another to establish a solution for utility spikes in schools, jails and other government entities while reducing the rural gap by helping economies of scale benefit from small initiatives.
Minimise Global, the official Florida Buy EEaaS partner, can facilitate these initiatives.
A key strategy to offset these rising costs and mitigate financial risk is to employ a “reduce before you produce” approach, where an entity reduces energy consumption
By first improving the efficiency of its energy-consuming equipment such as lighting, HVAC, controls and water, the entity will have a more efficient set of equipment and buildings and are “right-sized loads” to be optimized for energy efficiency.
Examining design and building solar production based on the resulting reduced energy need can save the entity money in constructing its solar project because of the reduced need to get a better return on investment with solar power. Ultimately, this approach serves public agencies well — financially, environmentally, and functionally.
The gradual end of net metering won’t send shock waves throughout Florida but will push state and local leaders to work together to optimize energy usage.
It’s no secret that Florida attracts a barrage of new residents each year. Florida’s Office of Economic and Demographic Research estimates 329,717 new residents moved to Florida between April 2020 and April 2021, and as the population of the Sunshine State grows, municipal and county leaders should use creative solution providers that can put these solutions in place at no cost or a shared performance partnership model.
Daniel Badran is CEO of Minimise Global, an Energy Service Company that promotes technology to reduce energy consumption.