Monday, June 18, 2018
Business

Florida utilities say solar doesn't work in the Sunshine State, but it sure does in Georgia

The Sunshine State is losing its shine to something peachy.

While Florida energy policy impedes solar power development, Georgia promotes it: The Peach State, with a population half that of its neighbor to the south, expects to reach 900 megawatts of solar power generation by the end of 2016, almost twice Florida's projected total by that time.

"Georgia is going to wind up being a state that everyone looks toward," said Ken Johnson, a vice president and spokesman for the Solar Energy Industries Association in Washington, D.C. He said the reason why Georgia is emerging as a solar-power leader is that regulators and utilities have embraced solar as part of the solution for energy demand rather than rejecting it as not cost-effective.

"They see solar as a friend," Johnson said, "and not an enemy."

• • •

Solar is the enemy to Florida's investor-owned utilities, a technology that threatens their bottom line.

Publicly, the state's utilities argue that solar is unsuitable for the Sunshine State's energy needs: Too costly. Too unreliable. Too inefficient to overcome Florida's cloud cover by day and lack of solar power generation at night.

Duke Energy Florida, Tampa Electric and Florida Power & Light further assert that solar, rooftop solar in particular, mostly benefits the well-off (who can pay the substantial upfront costs) while forcing the poor and many in the middle class to bear the burden of maintaining the power lines and power plants.

The utilities insist that everyone should pay to keep the electric grid functioning.

Perhaps influenced by millions in contributions from utility companies, Florida lawmakers and regulators often repeat the utilities' talking points despite solar's expansion in other states, including just across Florida's northern border.

Today, there is no policy in Florida to bolster solar power. In fact, solar proponents argue that Florida law inhibits solar.

That's why Sen. Jeff Brandes, R-St. Petersburg, filed a bill for the upcoming legislative session that would reduce the taxes on solar power systems for businesses that install them at their facilities. Solar interests say those taxes have made it difficult for the industry to make a profit and for other businesses to reap the full benefits of solar technology.

"The Sunshine State should be the leader in solar energy," Brandes said in announcing his bill. "This legislation is designed to remove barriers to businesses so that they can enter this growing renewable energy market. Reducing burdensome taxes is a key component to fostering the solar energy market in Florida."

But what the solar industry really wants is to change state law to allow solar producers to sell the power they generate directly to consumers — a policy permitted in at least half the states.

Under the Florida Constitution, only utilities can sell directly to consumers. That means landlords of a shopping mall or even residential landlords who have installed solar panels on the roofs of their properties cannot sell the electricity to their tenants.

Allowing such sales, solar proponents say, would be a powerful incentive for businesses to install panels atop commercial buildings, over parking lots and on the rooftops of shopping malls.

But changing the law could take revenue away from the power companies, which make money by selling electricity and building more power plants.

An unusual group of tea party and Christian Coalition conservatives have teamed up with libertarians, Democrats and environmentalists to push a petition for the 2016 ballot to amend the Constitution and allow solar producers to sell power.

Debbie Dooley, co-founder of the Atlanta Tea Party and one of the leaders of the effort, said as more people become educated about solar's benefits as a source of "energy freedom," there will be a groundswell of support.

"There's just a lot of disbelief," she said, "that Florida, the Sunshine State, has policies that block the sun."

• • •

Dooley and others calling for free-market electricity choices successfully pushed Georgia to adopt solar-friendly policies.

Now Georgia utility regulator Bubba McDonald flashes an ear-to-ear grin when he talks about his state's solar successes.

McDonald led the charge on solar, in part because he has said he wants his grandchildren to see trees. But most significantly, McDonald said, Georgia will reach 900 megawatts of solar by the end of next year and "without upward pressure on consumer rates."

In 2008, Georgia began offering tax credits to homeowners as an incentive to install solar power, helping to spur interest. The tax credit expired at the end of 2014.

Then, in 2012, the Georgia Public Service Commission approved the Georgia Power Advanced Solar Initiative. The state's largest utility, Georgia Power, designed two programs to allow homeowners and businesses to sell energy from solar generators to the company as well as large-scale solar developers to enter into power-purchase agreements.

Now Georgia lawmakers have a bill on fast track through the legislature to allow solar developers to lease to consumers with no upfront cost.

Georgia's efforts attracted the attention of the U.S. military, which kicked off a series of major solar projects on bases in the southeastern United States at facilities in Georgia.

McDonald said U.S. Army Maj. Gen. Al T. Aycock approached him about Georgia leading solar efforts for the military.

" 'We're looking at Georgia as the model state,' " McDonald said Aycock told him. "Those were his words to me."

Johnson, the solar industry association executive, said Georgia regulators are "proactive in trying to bring more solar without any upward pressure on rates."

"Simply put, the difference between Florida and Georgia has been public policy and the attitudes of utilities toward solar," Johnson said. "You've got an effective Public Service Commission working with an enlightened utility."

• • •

Economist Mark Cooper argues that Florida has for the past decade miscalculated the direction of the electricity market. Cooper is a senior research fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School who warned regulators that the state's nuclear strategy was not economically feasible.

Now, Duke Energy Florida customers are paying $1.5 billion for the Levy County nuclear project that was canceled.

Nuclear plants, Cooper said, are costing 10 cents to 12 cents per kilowatt hour to bring online.

Meanwhile, Georgia regulators said they are building solar farms at a cost of 6 cents per kilowatt hour. And other states, such as Texas, are building solar farms for even less.

The solar price reflects the benefit of a 30 percent federal tax credit that drops to 10 percent at the end of 2016. But, for now, it brings new solar on par with the cost of new natural gas facilities, and half the per-kilowatt-hour cost of new nuclear plants, Cooper said.

Still, there is no current solution to solar's Achilles' heel, it cannot produce power at night. That would require a cost-effective storage system.

Still, Cooper argues Florida is wasting more time and opportunity.

"Florida," Cooper said, "needs to get on the right side of history."

Cindy Muir, a spokeswoman for the state Public Service Commission, said adding more solar to the state's energy mix has taken time because of the high cost. She said, though, the commission is working on it.

"Florida is in transition from programs that are not cost-effective to exploring solar program options that will benefit all customers," Muir said. "The Florida Public Service Commission is working with all the stakeholders to develop a strategy to promote solar effectively at a reasonable cost. It takes time, but the PSC has committed to get it done."

The commission plans to hold workshops throughout the year to gauge public interest in solar.

Meanwhile, Duke Energy, which has little solar presence in Florida, has put its plans for a modest community solar project on hold. Tampa Electric is developing a 2-megawatt solar array at Tampa International Airport that will come online at the end of the year.

Mark Bubriski, an FPL spokesman, said the trouble remains that the making solar "cost-effective" has proven difficult.

Even after announcing plans to increase its solar generation capacity by 225 megawatts by the end of next year, FPL said last week that "solar power — even the most economical large-scale installation — is generally not yet cost-effective in FPL's service area."

Added Bubriski: "We intend to add significantly more solar. We have been working on multiple ways to do so as the cost of solar continues to come down."

• • •

Despite the naysaying from Florida utilities and regulators, businesses, government agencies and developers have moved forward with private solar projects.

For instance, solar proponents say, Great Bay Distributors of Largo would not install a 1.5-megawatt solar array atop its new St. Petersburg facility if it didn't make economic sense.

"It's just nonsense," Scott McIntyre, president of the Florida Alliance for Renewable Energy and a solar contractor, said of the utility's arguments. "When you have a monopoly, you don't want to give up the monopoly.

"But they are fighting a rising tide and they know it," McIntyre said. "They're trying to stave it off for as long as they can."

Johnson said part of the noise that is confusing his group's message is that some think solar proponents are looking to replace other sources of electricity generation.

But, he said, there remains a need for utilities and the electric grid even as use of solar power becomes more prolific.

"We have never said solar is the answer to America's energy problem," Johnson said. "But we are part of the answer."

Contact Ivan Penn at [email protected] or (727) 892-2332. Follow @Consumers_Edge.

 
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