Installing Solar Panels In Florida: Considerations And Incentives
Updated: Jun 29
There are now more than 149.5 gigawatts of installed solar energy capacity in the United States, according to the Solar Energy Industries Association (SEIA). However, these solar systems are not evenly distributed across the country. Several states are leaders in solar energy installations and growth, including California, Texas, Florida, Nevada, North Carolina, and Arizona.
Florida has 11,747 megawatts of solar electric capacity, which is enough to power nearly 1.4 million homes. Four cities in Florida rank among the nation’s leaders in solar capacity in 2022: Jacksonville, Orlando, Tampa, and Miami. Today, 5.75% of the state’s power comes from solar energy, and more than 11,700 people are employed in the Florida solar energy industry. Florida has the greatest solar irradiance in the eastern United States, so well-sited solar systems will have excellent output.
Because Florida is the #3 solar market in the country, there are lots of opportunities for solar energy professionals. Let’s explore why Florida is such a bright spot for the industry and how to best serve this dynamic market.
Considerations Florida Solar Clients Should Keep In Mind
Like most solar markets, Florida home and business owners want to know how much they can lower their electricity bills and how quickly the solar photovoltaic panels will pay for themselves from the savings. Although many Florida properties have excellent solar resources, not all are well-suited for solar panels. It’s critical for solar companies to provide reliable and accurate information to potential customers so that they can make informed decisions.
Grid Electricity Rates
The average cost per kilowatt-hour (kWh) of residential electricity in Florida is 14.76 cents, which is slightly lower than the national average of 16 cents per kWh. However, Florida electricity prices increased by 1.26 cents per kWh in just a year. The greater the cost of grid power, the faster a solar system pays for itself. The cost of grid power is used in calculating the payback period of solar panel systems.
There are numerous electric companies serving Florida, including Florida Power & Light, Tampa Electric Company, Duke Energy Florida, and the Florida Public Utilities Company. Various companies serve different parts of Florida and rates may vary. The largest electric company in the state is Florida Power & Light, which serves 11 million Floridians.
Solar Energy Potential Of The Property
Despite having an excellent solar resource, some Florida properties have a lot of shading or other factors limiting solar energy development. For example, some properties do not have a good solar orientation, which results in lower solar energy output. Determine if there is too much shading during the site survey before getting too far into the process. This is also a good time to decide if the home needs an electrical panel upgrade or a new roof.
Also, 45% of Floridians live in properties with homeowners associations (HOAs). Therefore, many customers may need to get permission from the HOA for a solar project to move forward. However, the Florida Solar Rights Act does help protect your potential customers from solar ordinances, deed restrictions, and covenants that limit their use of solar equipment.
Qualifying For Solar Energy Incentive Programs
Although there is a federal solar tax credit available for 30% of the installation cost, not all of your customers will qualify. For example, your customer must own the solar panels, so solar leases and power purchase agreements (PPAs) do not qualify. Also, the homeowner must have a sufficient tax liability to be able to apply the tax credit. If a Floridian cannot use the tax incentive, a solar lease or joining a community solar farm might be a smarter investment.
Florida Solar Incentives
There are numerous solar energy incentives that reduce the net cost of going solar or reduce the payback period.
Florida State And Local Incentives
There are several programs available in the state of Florida that make solar electricity more affordable. However, the Sunshine State does not have an active Solar Renewable Energy Credits (SRECs) market, Renewable Portfolio Standard (RPS), or solar rebates.
Net metering laws in Florida require utility companies to compensate their customers for excess power they supply to the electric grid. This enables Florida homeowners and businesses to get more value out of their solar systems without needing battery energy storage.
Florida Solar Sales Tax Exemption
Florida does not collect sales tax for various types of solar installations, including solar PV, solar pool heating, and solar water heaters. This incentive can reduce the total cost of going solar by 6%.
Renewable Energy Property Tax Exemption
Although installing a renewable energy system on a residence can significantly increase the home value, it won’t impact a home or business’s property taxes. This property tax abatement law applies to wind turbines, geothermal heat pumps, solar PV panels, and lithium-ion batteries.
Federal Incentives For Installing Solar Panels
As mentioned above, Florida homeowners and businesses may be eligible for the investment tax credit (ITC), which can lower the total cost of installing solar panels by 30%. The ITC applies to the cost of all solar equipment, such as solar panels, inverters, racking systems, and batteries. Therefore, a $20,000 solar energy system can qualify for a $6,000 federal tax credit if the client has sufficient tax liability. Also, your Florida solar customers will see the benefits of the income tax credit when they file their taxes for the given tax year, so it isn’t immediate. It’s worth encouraging clients to work with a licensed tax professional to ensure they’re getting the most benefit from the tax credit.
Frequently Asked Questions About Solar Panels In Florida
Let’s explore some of the common questions related to using solar electricity in the Sunshine State.
What is the average cost to go solar in Florida?
The average cost per watt for a residential solar energy system as of June 2023 in Florida is $2.60 per watt before incentives. That means that the total upfront cost of a 6-kW rooftop solar system is around $15,600 in Florida. The cost of going solar is a bit lower than the national average, which is $2.95 per watt, according to EnergySage. Many homeowners can obtain solar loans and pay the cost of solar panels over time.
How long does it take for solar panels to pay for themselves?
The average payback period for a Florida solar system is about 9.8 years, assuming your client can use the solar ITC. This also assumes they have a pretty good solar resource and can take advantage of Florida net metering programs.
Should Florida clients install solar battery storage?
The price of solar batteries has fallen in recent years, but they can still add $10,000 or more to the cost of a solar system. Whether a solar battery is worth the upfront expense depends on how often the customer experiences power outages and if their utility company offers Time-of-Use rates. Under this rate structure, electricity is more expensive during times of high demand and lower at night and in the winter when demand is lower. Homes and businesses with solar batteries can draw from them instead of the power grid during times of peak demand to further reduce their energy bills.
Going Solar Can Be A Bright Idea In The Sunshine State
With a relatively short payback period and lots of sunlight, Florida is an excellent state for installing solar panels. Net metering laws, the solar sales tax exemption, and renewable energy property tax abatement incentives make Florida an excellent opportunity for installers. In addition, Florida is a leading state for electric vehicles, which pair well with a home solar system.
GreenLancer works with solar panel installers in Florida and throughout the country on solar power projects. We’ve helped more than 5,000 solar companies complete successful clean energy installations.
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