Florida Solar in 2022 – What You Need to Know
Florida has become the 3rd largest solar market in the US, surpassed only by Texas and California. As of June 2022, the Solar Energy Industries Association reported an installed capacity of 9,012.35 megawatts (MW) in the Sunshine State, which is enough to meet the electricity needs of 1,068,357 homes.
The SEIA keeps track of solar installations in all states, and Florida’s solar power industry experienced remarkable growth during the last three years:
- 1,377 MW in 2019, the first time Florida installed more than 1,000 MW in a single year.
- 2,822 MW in 2020
- 1,669 MW in 2021
Solar power has brought major investments to Florida, creating thousands of jobs in the process. The SEIA estimated a cumulative solar investment of over $12.25 billion in Florida by Q1 2022, with more than $2.37 billion invested in 2021 alone.
At the time of the latest SEIA report, there were 378 solar companies in Florida, including 50 manufacturers and 192 installers and developers. The SEIA also reported 11,219 solar industry jobs, and 130,260 installations completed.
Florida’s solar industry still has plenty of space to grow, in spite of the impressive results reported for recent years. Solar power only accounts for 4.68% of Florida’s electricity, and there is a growth forecast of 8,001.64 MW for the next five years. Photovoltaic technology has also become more affordable, decreasing in price by 50% during the last 10 years.
How Much Do Solar Panels Cost in Florida?
According to market data gathered by EnergySage, you can expect to pay between $2.20 and $2.98 per watt when going solar in Florida, with an average cost of $2.59/W.
- For a 5-kW home solar system, this translates into a typical price of $12,950.
- After subtracting the 26% federal tax credit, the out-of-pocket cost is $9,583.
Keep in mind these are average price figures, and your actual cost can be higher or lower depending on property conditions. If you’re considering solar power for a home in Florida, the best recommendation is getting a professional assessment and solar quote.
The US Energy Information Administration constantly gathers information about energy markets, and this includes electricity prices by state. Florida had an average price of 13.50 cents/kWh in March 2022. If you have a 5-kW solar PV system generating 8,000 kWh per year, this results in annual savings of around $1,080.
Tax Benefits for Solar Power Systems in Florida
Florida also offers a property tax exemption and sales tax exemption for solar power systems. These tax benefits reduce the ownership cost of solar panels, increasing their return on investment. Keep in mind that these tax benefits are combined with the nationwide Investment Tax Credit, which gives back 26% of your solar costs as a federal tax credit.
Thanks to Florida’s property tax exemption, any increase in home value resulting from solar panels is not taxed. For example, if your home increases in value from $300,000 to $330,000 after a solar installation, your property taxes are still calculated for a $300,000 home.
On the other hand, Florida’s sales tax exemption means you save 6% right away when purchasing a solar panel system. For example, if your solar PV system has a price of $15,000, you save $900 right away.
Solar Net Metering in Florida
Homeowners who are away during the day cannot use most of the electricity generated by solar panels, and it gets sent to the grid. When a state has net metering laws, electric companies must compensate you for that surplus energy.
In Florida, net metering is available for solar power systems up to 2,000 kW, which is hundreds of times more than what a home needs. Solar PV systems up to 10 kW are exempt from application fees and liability insurance, and this applies for the vast majority of residential installations. Duke Energy and Florida Power & Light (FPL) both have net metering programs.
PACE Loans for Solar Power in Florida
Florida has enacted legislation to enable PACE loans. PACE stands for Property Assessed Clean Energy, and this is a financing option that offers the following benefits:
- Low interest rates.
- Long repayment periods, typically from 10 to 20 years.
- A PACE loan is bound to the property, not the owner, and repaid along with property taxes.
If you sell a home with solar panels, a PACE loan can be easily transferred to the new owner. This makes PACE loans ideal for home upgrades that improve energy performance, and this includes solar panel systems.
When going solar with a low-interest loan, you can use electricity savings to cover the monthly payments. Loan financing does not affect incentives such as tax exemptions and tax credits, since you’re the legal owner of the solar panels from the start, even when owing money to a bank. You only lose these incentives when leasing solar panels, since they belong to the company providing the lease.
A Snapshot of Florida’s Electric Sector in 2022
Florida’s electricity prices are slightly below the US average, as you can see in the latest data published by the Energy Information Administration (March 2022). However, even if electricity is not very expensive in Florida, solar panels can take advantage of the state’s abundant sunshine.
|Market Segment||Florida kWh Price||US kWh Price|
|Residential||13.70 cents/kWh||13.83 cents/kWh|
|Commercial||11.36 cents/kWh||11.78 cents/kWh|
|Industrial||8.75 cents/kWh||7.46 cents/kWh|
Florida has the third-highest energy consumption after Texas and California, and the second-highest electricity production after Texas. However, Florida can be considered an energy efficient state, considering its population of 21.8 million. When states are compared in terms of energy consumption per capita, Florida has the 4th lowest.
The Sunshine State has a net summer generation capacity of 64,914 MW, representing 5.7% of total US capacity. Natural gas is Florida’s main electricity source, accounting for 75% of power generation, followed by nuclear power at around 10%. The residential sector accounts for over 50% of power consumption, and 90% of households use electricity for space heating and air conditioning.
Renewable generation is relatively low in Florida, but solar power has been growing fast in recent years. Florida’s solar industry has been dominated by megawatt-scale systems, which represent around 85% of the installed capacity. However, small-scale installations have been on the rise since 2018, when the state allowed solar panel leases.
Surprisingly, Florida has become the 3rd largest solar market without having a Renewable Portfolio Standard. In states with an RPS, utility companies have a legal obligation to generate a specified percentage of their electricity from renewable sources.