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Net-zero communities that make solar power work expand in Florida

GROVELAND

Herman Martinez hasn't paid an electric bill above $11 for his 2,150-square-foot home in the two years he has lived in it.

Air conditioning? He runs it as little or as much as he wants. Christmas lights? He hangs more and more every year.

Martinez not only lives in a net-zero-energy home but in an entire community where solar panels provide at least some power to every home. Every garage in the Trilogy adult community 30 miles west of Orlando includes an electric charging station. Each home sports luxury amenities with prices that start at $172,990 and top out at $366,495.

Florida utility executives and state regulators portray rooftop solar as too much of a luxury to play a significant role in the state's energy mix. In fact, regulators approved proposals by the utilities to gut their energy-efficiency goals and end solar rebates because they said neither is "cost-effective."

Now the utility industry also wants homes and businesses that use solar to pay more for a connection to the electric grid to help share the costs of power lines and big-box power plants. Significant increases in solar's costs could erode the benefits Martinez and his neighbors enjoy.

For now, Martinez, a retired federal law enforcement worker, urges anyone looking for a home to consider solar, as the savings each month allows him to enjoy higher-quality entertainment and lifestyle choices.

"To me," Martinez said, "it's a no-brainer."

• • •

Solar would seem a natural for the Sunshine State.

The Solar Energy Industries Association ranks Florida third for solar potential but 13th in installations.

Harnessing power from the sun has proved difficult in Florida as environmentalists, utilities and regulators debate the viability and cost of solar. Florida now trails such states as New Jersey and North Carolina. And Georgia is set to eclipse the Sunshine State in its solar deployment.

Though the state's solar prospects appear cloudy, Trilogy, which calls itself the largest residential solar development in Florida, and other Central Florida communities increasingly see opportunity.

Trilogy's developer, Shea Homes, is a subsidiary of the nation's largest, privately owned builder, J.F. Shea Co.

California-based J. F. Shea helped build the Hoover Dam, the Golden Gate Bridge, the San Francisco Bay Area Regional Transit system and the Washington, D.C., subway.

Most of Shea's solar communities can be found out West. But the company has more plans for the East Coast in North Carolina, Washington, D.C., and Florida.

Shea partnered with SolarCity, a leading national solar firm, to offer 1,500 solar-equipped homes in the Trilogy development. Shea is building a second adult community with solar in Ocala.

"It's a game-changer," said Katie Everett, Trilogy sales manager. "The financial model of solar has been difficult to solve. Trilogy solved that problem."

Trilogy now has three to five sales closings a day.

Trilogy rolls the cost of the solar panels into the home buyer's mortgage, so they don't have to pay for the system up front.

Under the purchase agreement, homeowners lease the panels for 25 years from SolarCity and the company maintains the equipment at no added cost.

Home buyers are "going to save $2,000 to $5,000 a year" in electric costs, Everett said. "It's going to secure solar's future."

• • •

Florida utilities and some state regulators argue that those who can afford solar are predominantly well-heeled homeowners and do-gooder businesses looking for some positive public relations by going "green."

Duke Energy Florida president R. Alexander "Alex" Glenn has told lawmakers that the Sunshine State has too many clouds for solar to make sense without battery storage. "We're also the partly cloudy state," he said.

Because solar panels generate electricity during the day and produce lower amounts of electricity when it is cloudy, capturing some of the power and storing it makes the technology more effective. But storage systems or "batteries" can be costly and inefficient.

Most businesses and homes, such as those in the Trilogy community, remain connected to the grid and do not need batteries.

But storage is key for utilities such as Duke, as it would enable them to store energy from large-scale solar farms and make solar power usable day and night. Utilities would profit by providing power from large solar farms.

"Storage is going to be critical," Glenn has said.

As it stands, rooftop solar threatens the traditional utility business model. Homes and businesses would use less power from the utilities, decreasing their revenue — something the industry fears.

At a time when the utilities are expressing concern about the impact of solar, state regulators voted in November to gut energy-efficiency goals and to end solar rebates administered by the utilities, saying they are not "cost-effective."

Art Graham, chairman of the state Public Service Commission, said all customers paid for rebates that benefited just a few. He said that if solar comes from utilities rather than on homes, "you don't have to have $30,000 to put it on your roof."

The commission has decided to hold workshops in 2015 to review the issue of solar.

• • •

All told, the up-front cost of solar isn't a concern anymore.

Newer strategies such as SolarCity leasing and loan programs help consumers avoid up-front costs. SolarCity received $4 billion to finance solar projects from such investors as Bank of America, Merrill Lynch and Capital One Bank.

In Florida, the SolarCity model generally finds success in new construction like at Trilogy.

That's because, solar proponents say, barriers in Florida hinder solar success, including:

• The state's tangible personal property tax on solar installations makes the cost of installing panels on existing homes too costly for SolarCity's business model to work.

• State law prohibits any business other than utilities from selling power directly to consumers. So a landlord cannot lease solar panels on his property and sell that power to a tenant — residential or commercial.

Both issues are targets of environmentalists and tea party leaders. Some argue that the falling price of solar panels might make the tax issue moot.

Meanwhile, SolarCity found the economics on new home construction does work because the costs can be rolled into the mortgage payment and revenue shared with the home builder.

• • •

Trilogy is SolarCity's biggest Florida success story so far.

"The community is selling out," said Patti-Jo Jungreis, who sells real estate for Keller Williams Classic Office. Solar "was definitely a selling plus. Being an active adult, you're on a budget. That's a nice feature for the buyers."

Trilogy is a 55-year-old-plus, gated community with resort-style amenities — pool, clubhouse and organized events.

Along with the solar and energy-efficient features, appliances and windows, the homes include the ability to control lighting and other equipment with a smartphone.

The high-end benefits of the homes raise the purchase cost above some of the other new homes in and around Groveland.

For instance, for the two-bedroom, 21/2-bath home with a den at Trilogy, a home buyer could purchase a four- or five-bedroom home in nearby developments in the $300,000 price range.

The real difference is the solar panels — and the net-zero electric bill, in particular.

Net zero means the solar panels produce as much electricity as the home uses. Power from the panels goes to the electric grid, effectively causing the home's meter to spin backward. The panels can generate more than a home uses, resulting in a credit.

As more net-zero homes and businesses come online, solar proponents and environmentalists are gearing up for a battle with the utility companies as they seek to raise fees on solar panel owners who want to stay connected to the grid.

Current state law allows home­owners to sell their solar-generated electricity back to the utility companies at the same price as residential customers pay to use the power from the grid.

The Edison Electric Institute, a utility industry organization, said states such as Florida passed net-metering laws at a time when solar was not as prolific as it is becoming. With the reduction in utility revenue, Edison Electric said, it will become more difficult for power companies to cover their expenses.

"Should current net-metering policies be updated? Yes," Edison Electric noted in a statement on the issue. "As rooftop solar and other … systems become more developed, net-metering policies and rate structures in many states should be updated so that everyone who uses the electric grid helps pay to maintain it and to keep it operating reliably."

Sterling Ivey, a Duke spokesman, said solar will be an important part of Florida's energy future. "We will work with state leaders to help create a policy to incorporate solar over the long term and that is fair to all customers," he said.

Solar proponents have created an online petition to Graham and the PSC that reads: "Utilities around the country are trying to stop people with rooftop solar from receiving fair compensation for selling electricity back to the grid. I call on Chairman Graham to reject any attacks on rooftop solar and commit to keep the value of rooftop solar credits at full retail rates."

• • •

At Trilogy, the current fees to remain connected to the grid run about $8. With taxes, most home­owners pay about $10.50.

"Our bill is very low," said Paula Duffy, who with her husband have lived in the Trilogy community for almost a year. "We don't have any problems. Sometimes the bill comes in at $10, sometimes $8, sometimes less."

Problems do arise at times.

Paulette Grimes is in her third year at Trilogy. And up until August and September of this year, her electric bill never reached $11.

The two bills this summer ran about $100 and $70 — though Grimes said she and her husband were in Hawaii three weeks during part of that time, celebrating his 80th birthday. "Nobody else had a high bill," she said.

(Duke said a representative spoke with the Grimes and the utility believes its equipment is functioning properly.)

"You built up some energy here," Grimes said Duke told her. "They had me so confused. You always lose against those big guys."

Herman Martinez, 64, said his electric bills have never spiked liked the Grimeses' did. The consistent low electric bill, he said, added more of an incentive to buy at Trilogy over 15 other communities he considered.

Martinez used to pay as much as $350 a month for electricity in smaller homes than he now has. He said he now dines at better restaurants and enjoys better cable services with the extra money he saves. "It does give you options," Martinez said. "For the first time in my life, I don't have to worry about leaving the lights on. I don't have to worry about the air conditioning being too high. I'm completely sold."

Contact Ivan Penn at ipenn@tampabay.com or (727) 892-2332. Follow @Consumers_Edge.

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