Tuesday, July 17, 2018
Business

Unprecedented solar push means Sunshine State may live up to its name

For years, solar energy has been an ironic afterthought in Sunshine State, particularly among utilities keen on pursuing natural gas, nuclear and legacy coal options for power.

The Solar Energy Industries Association (SEIA), a Washington-D.C.-based nonprofit, considers Florida as having the third-highest potential for solar energy. But with just over 700 megawatts installed, the state ranks at No. 13 nationally for current solar capability.

"We consider Florida as the 'Sunshine State' to have under-performed its potential," said Sean Gallagher, SEIA vice president for state affairs.

But that's changing — perhaps dramatically.

Florida's marketplace for solar, Gallagher said, has doubled over the past year. Just this week, Duke Energy Florida announced it intends to build 700 megawatts of solar power over the next four years, dwarfing its current 20 megwatts. Florida Power & Light, which already has 335 megawatts of solar power, plans to build 2,100 additional megawatts by 2023. And the city of St. Petersburg briefly went as far as considering a proposal that would require residents with homes larger than 1,100 square feet to have rooftop solar capabilities.

RELATEDTampa named an up-and-coming solar energy city

The right mix

The current solar boom is coming about because of the right mix of factors. A major contributor is price — over the past five years, the cost of building solar installations has dropped by nearly 65 percent, said SEIA's Gallagher. That, he said, has largely been driven by a spike in competition in the solar market and a dip in the cost of manufacturing for everything from solar panels to the literal nuts and bolts for installations.

And as more solar arrays are built, companies find more efficient ways to install the arrays, driving down installation costs.

Regulation, too, is turning into a favorable environment for new solar efforts. New regulations that went into effect Aug. 1 eliminated tax barriers for homeowners and businesses looking into solar installations, making it more accessible.

"It cracks the door open to the residential and commercial solar market in Florida," Gallagher said.

Current solar efforts in Florida

Duke's latest solar effort brings the utility somewhat in line with other major utility companies in the state. Earlier this week, Duke filed for a settlement to lower customer bills and venture more seriously into solar energy. Should the Florida Public Service Commission approve the settlement, Duke will be allowed to build 175 megawatts of solar power each year.

"We've always been very supportive of solar," Harry Sideris, Florida president of Duke Energy, said in an interview last week with the Tampa Bay Times. "We've always wanted to do it in a smart way for customers."

Beginning in 2019, customers will pay an extra $1.39 per 1,000 kilowatt hours on their monthly bill if Duke keeps pace with adding the 175 megawatts each year. But unlike up-front charges for the never-built Levy Nuclear Project, customers won't pay a penny until each installation is proven to be cost effective and in service, said J.R. Kelly, a lawyer with the Office of Public Counsel who represents consumers.

Once all 700 megawatts have been added, customers will see an increase of $3.87 per 1,000 kilowatt hours in 2021, but the solar energy will also likely save ratepayers some money in fuel costs.

RELATEDDuke Energy strikes deal to lower customer bills, boost solar

FPL, which serves southern Florida, already has a fairly robust solar presence in the state. About 600 megawatts will come online by early March 2018, serving its 4.9 million customers.

And then there are smaller utility outfits like Seminole Electric Cooperative. Unlike Duke and FPL, Seminole Electric sells solar energy from its 2.2 megawatt array to nine distributors, who then sell it to customers. The 1.6 million ratepayers the cooperative serves are largely in rural areas.

The cooperative is currently planning for future power supply needs of its customers and looking to solar as a possible option.

"We're looking at solar," said Ryan Hart, manager of communications and energy policy for the collective. "We just have to make sure that we serve our members in an economical way."

Challenges ahead

Cheap parts and a newly-invigorated desire to build solar installations aside, there are hurdles. On a local level, companies will need to figure out how to store solar energy. As part of the settlement. Duke is investing in 50 megawatts of battery storage and conducting storage research.

Another challenge is working its way through Washington, D.C. Two solar panel manufacturers filed a petition with the U.S. International Trade Commission to impose tariffs on imported solar modules. Imports, Chinese-owned Suniva and German-owned SolarWorld have said, significantly hurt their businesses. Should the tariffs eventually get a green light, solar could get more expensive.

"It would really pull the rug out from the solar industry nationally," SEIA's Gallagher said. "It would double the cost of building solar for all kinds of projects."

The commission is expected to rule in September on whether there was an adverse impact because of imports.

Times researcher Caryn Baird contributed to this report. Contact Malena Carollo at [email protected] or (727) 892-2249. Follow @malenacarollo on Twitter.

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