A Bright Future for Solar Power in Florida

Jordan Pic, MPA, Staff Writer, Brief Policy Perspectives

It seems natural that the “Sunshine State” should be known for harvesting one of the most  popular  forms of  clean energy – solar power. However, things aren’t always so sunny. Florida ranks fourteenth in its installed capacity for producing solar energy, even though its potential to produce solar power is ranked third in the nation. The solar wars in Florida have been heating up for years. Solar enthusiasts want less regulation and more incentives for solar power. The opposition, which is mostly made up of big utility companies, wants to create a monopoly on solar power in the interest of protecting their own profits.

This year, Florida voters saw two constitutional amendments on their ballots concerning  solar power. While this post will not address the arguments for or against the use of solar power itself, this article will give an overview of the two amendments and propose that Florida explore solutions for a free market for solar energy.

Consumers for Solar Choice

On November 8th, Floridians  voted on Amendment 1 which was backed by  a Political Action Committee (PAC) called Consumers for Solar Choice. The amendment would have made it a constitutional right for Floridians to own and lease solar equipment. While it was expected to pass, it did not. Scrutiny over the amendment’s wording and name most likely caused it to fail. The textof the amendment made it sound that the bill was a conservative measure:

Consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do.

However, by establishing solar power as a constitutional right, the amendment would actually open the door for government subsidies. Any Floridian could demand that utility companies provide them with solar panels. Constitutional expert KrisAnn Hall suggested the amendment would actually cost solar panel customers a fee:

There is in fact is no such subsidy literally being paid by non-solar customers, so one can only assume that this “protection” will take the form of a “fee” paid by solar users for “maintenance and upkeep of the power grid” or a cessation of payment for the extra energy provided to the grid by solar customers.

The voice of Florida’s business, The Florida Chamber of Commerce, also recognized the constitutional issue:

The solar choice amendment is driven by special interests who seek to raise electricity prices on Florida families and make Florida less competitive. There’s a right way to do solar, but Florida’s Constitution isn’t it.

If the amendment collected the 60% vote it needed, the biggest beneficiaries would have been the electric companies themselves who spent more than $20 million dollars to support the amendment. The electric companies would no longer have to pay solar customers for their excess energy-even if the companies use it.

The solar market will stay out of the control of the utility companies because the amendment failed. Amendment 1 would not have protected a free market and legislation would have been needed to ensure third party producers could sell to consumers. Florida needs legislation to allow all companies to own solar power, not just the big utilities.

Floridians for Solar Choice

Earlier in the year, a similarly named group called Floridians for Solar Choice (FSC) endorsed a different amendment, Amendment 4.The amendment proposed to alter the Florida constitution to allow tax exemption for solar devices used by commercial consumers and encourage solar investment. Amendment 4 did make the 60%  vote threshold needed in the August primary election. Although the amendment is backed by legislators, the same issues arise as Amendment 1 because a constitutional amendment is not the right policy approach. Renewable energy policy should be passed as law, not as a constitutional amendment. The Heartland Institute’s James Taylor writes on Amendment 4:

The Florida Constitution will officially become an avenue for crony capitalists and politically powerful industries to abolish economic freedom… The Florida Constitution would no longer be a sacred document that protects our freedoms and sets the ground rules for our representative government. It would instead become a trough for pork-barrel favoritism and consumer restrictions that would become the coveted prize of crony capitalism.

The amendment’s goal is to make solar energy more affordable by providing tax incentives to commercial consumers that are already provided to residential consumers who install solar. However, solar power companies would end up benefitting from special treatment and tax breaks. Currently, the estimated price of installing a solar system on a home is between $25,000 and $30,00 for a standard 5kW system. This can take twenty years or more to pay for itself in solar savings. Due to the incredibly high cost of installing solar, it has become heavily subsidized.

Still a Bright Future on the Horizon?

Both solar amendments are breaches of the constitution’s purpose. Florida voters realized Amendment 1 was an ineffective policy. If Florida wants to grow solar power, it needs to move forward in a new direction. Advocates from both sides could create task forces and advocate for their agendas to become law-not constitutional rights-in the legislature.

The Florida government should not favor utilities or solar. Special interest-funded constitutional amendments and government incentives have to end. The same standards such as lower taxes should be implemented across the board for energy. Energy advocates should voice their concerns with legislators who can repeal regulatory burdens.

However, wIth the passing of Amendment 4, Florida is likely to see more pro-solar policies implemented. One of the most popular solar policies is Power Purchase Agreements (PPAs). Currently, Florida is one of five states that outright bans PPAs. In states that do allow PPAs, solar companies install solar panels with no money down from the customer who commits to a twenty year contract. The company collects the tax credits from the installation of the solar panels, sells the electricity to the consumer, and sells the excess electricity to the electric grid.  Florida currently does not allow third-party ownership of solar, only leasing. Amendment 1 would have allowed ownership, but it did not explicitly state anything about third-party sales.

Amendment 4 is an encouraging step for solar power. Amendment 1 was also a step in the right direction but it was tainted by special interests who weren’t letting in the little guys. Moving forward, Florida would be better served to deal with solar power as a legislative issue instead of compromising  the state’s constitution. Whether taxes are lowered or panel ownership isallowed, laws must treat all energy sources equally. When consumers are allowed to make an informed decision and regulatory burdens are lifted from Florida, only then will the market speak for itself on the green priorities of Floridians.

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