What are Florida’s Solar Power Rules?
Florida solar power laws are a combination of public policy, regulation and incentives intended to promote solar energy production, development and use in the Sunshine State. These laws encompass a wide variety of issues, including financing methods, legal requirements for solar companies and contractors, and incentives for homeowners and businesses to invest in solar technologies and systems.
Florida’s policies encouraging the use of solar energy have evolved over the past several decades. In 1976, the U.S. Congress passed the Energy Policy and Conservation Act, which led to the establishment of the National Renewable Energy Laboratory (NREL). NREL focused on renewable energy research and development, including solar energy technologies. Although funding for solar projects varied throughout the 1970s and 1980s, steady progress toward solar energy development occurred. In 1986, software for modeling solar energy systems was developed, and the first photovoltaic systems were installed on residential homes in the United States.
Local, state and federal governments have continued to pass laws promoting the use of solar energy, primarily through tax incentives. Today, there are a variety of state and federal incentives and grants available to those who decide to install solar energy systems. Some of these include the Federal Investment Tax Credit for Small Wind Turbines, the Florida Energy Efficiency and Conservation Act of 2008, and the Residential Renewable Energy Tax Credit.
The most significant incentive for residents is the Federal Solar Tax Credit, which provides a 26 percent federal tax credit for the purchase of solar panels. Florida offers a property tax exemption for renewable energy systems under F.S. § 196.175(9). Furthermore, the Energy Improvement and Extension Act of 2008 provides another 30 percent investment tax credit. Other financial incentives include stand-alone storage technology, grants and rebates, and the Property Assessed Clean Energy (PACE) Financing Program.
Some of the most important laws related to solar energy in Florida include F.S. § 366.95, which provides net metering rules for customers with solar, biomass , fuel cell, hydroelectric and other renewable energy systems; and F.S. § 366.81, which created the Solar or Nonfossil Fuel Renewable Energy Systems Cost Recovery Mechanism and is meant to reduce or apply credits to the utility’s base rate costs. The Florida Solar Energy Center administers the state’s solar programs and incentives.
Additionally, F.S. § 163.04 encourages cities and counties to permit the use of photovoltaic systems on local government property, and F.S. § 403.359(3)(b) exempts photovoltaic systems from permitting fees and zoning regulations "when incidental to residential use." F.S. § 553.80 encourages local governments to allow for expedited permitting for rooftop solar systems to ease the burdens for owners installing these systems.
Other laws of interest related to solar energy in Florida include F.S. § 489.145(6), which requires the Department of Business and Professional Regulation to publish a list of licensed or certified contractors who can install solar energy systems; F.S. § 627.7013, F.S. § 627.70132, F.S. § 627.7014 and F.S. § 627.70141, which together comprise the Florida Homeowners’ Bill of Rights protecting homeowners from being dropped by their insurance companies for purchasing a solar energy system; F.S. § 681.109(1), which was enacted as part of the Florida Construction Lien Law and provides for the payment obligations of owners and contractors involved in real property improvements less than $2,500, such as disposing of abandoned property off-site once a lien has been recorded; and F.S. § 689.277, which was enacted as part of the Florida Construction Lien Law to create requirements for the parties involved in the sale or improvement of real property to procure a public records search of liens.
Solar energy laws, including those governing net metering, interconnection and parallel operation, and renewable portfolio standards (RPS) set energy goals for individuals or organizations that generate renewable energy. Net metering policies are important parts of the net metering program, allowing solar system owners and operators to offset their utility costs and monetize renewable energy generation.
Florida’s Net Metering Policy
Within the realm of Florida solar power laws, net metering stands out as one of the most beneficial for those looking to self-generate energy with a Florida solar system. But what exactly is net metering?
Put simply, it is a billing mechanism that serves to reduce the amount of energy consumed from the grid and simultaneously lower the cost to the customer after they have installed a solar system. The way in which net metering works is that it credits a net metering customer (government, education, residential or commercial) for each unit of energy they feed into the grid, or give back to their utility provider. That credit is used toward any energy the customer consumes during a given month. In short, net metering credits customers for energy going back onto the grid during times when their system is producing more electricity than they are using. As a result, net metering allows you to reap all the benefits of your system while still being connected to the grid.
There are few exceptions. For example, when your Florida solar system is not producing excess energy during a peak month in the summer and your electric bill is $300, you will still be charged the full $300 for the energy that you used. But if your electric bill is $300 and your system produces more energy than it uses, the credit will offset the bill, and you may owe as little as zero to the bank months in the winter.
The state has been working toward a stronger net metering policy, however. On July 1, 2015, Florida’s legislative body made some updates to its net metering policy, which will make it easier for more customers to benefit from the positive effects of going solar. These changes to Florida solar power laws for net metering include the following:
As you can see, Florida’s solar power laws continue to evolve, but for solar power customers living under a net metering plan, this recent development will ultimately help them further boost their savings and efficiency.
Florida Solar Power Incentives and Benefits
For almost as long as the sun has been shining, laws, rules and policies about solar power have been changing to keep up. But as those laws, rules and policies have evolved, they have come to offer more and more incentives that residents and businesses can take advantage of. Because Florida is near the top of the list when it comes to the number of sunny days per year, it stands to benefit from tax credits, rebates and other incentives for solar energy.
At the state level, Florida offers a range of incentives for solar energy production. The Residential Renewable Energy Tax Credit is a personal income tax credit that is offered per Florida residence. The credit is available for residential solar photovoltaic (PV) and solar water heating systems. The credit covers 30 percent of the cost of the system, up to $10,000. Combined with the federal law incentive of 30 percent, that means homeowners can receive a total of $20,000 off the cost of the system.
Three types of loans for businesses are available through the Florida Solar Energy Loan program. The Economic Stimulus Loan is a disaster relief program established in the wake of the BP Oil Spill; the Florida Back to Work no-interest, federally funded, unsecured loan is for homeowners who need to make energy efficiency improvements to obtain a home loan; and the Florida Energy Affordability Loan helps low- and moderate-income homeowners make energy efficiency improvements that are eligible for the federal tax credits.
The state of Florida provides a Sales and Use Tax Exemption for solar equipment. The exemption is applied on purchases of solar energy systems. This sales tax exemption became effective on July 1, 2012, and provides an exemption from all sales taxes which would have otherwise been due on such purchases, including sales taxes that would have been imposed by any county or municipality (e.g., the local local option discretionary sales surtax).
Other stimulus money has been offered for solar energy through the Solar and Energy Storage Technologies and Structural Insulated Panels programs. These funds are awarded through the Florida Solar Initiative and the Florida Energy Growth Fund. They help to support solar research and development in the private sector.
Local governments in Florida may offer additional incentives for solar energy, including special assessment benefits. Under the Florida Solar Property Tax Abatement/Exemption program, counties and municipalities may grant property tax abatements for the construction or reconstruction of a solar energy system. This includes systems added to existing properties, reconstruction of homes to install solar energy systems, and the installation of a solar system as part of the construction of new residential dwellings.
Additional incentives offered at the federal level include the following. The Federal Energy Investment Tax Credit (ITC) provides a tax credit for solar energy property of either 30 percent of the value of the system or 10 percent for solar water heating property. The ITC also applies to systems in both residential and commercial settings.
Additionally, the US Department of Energy’s Loan Guarantee Program offers loan guarantees for projects that reduce the cost of producing power from various renewable energy sources. The program can also offer guarantees for solar energy projects. Applications for the program are currently being accepted.
Incentives for solar energy in Florida have dramatically expanded. Residents and businesses interested in solar power should research the incentives offered by the state and federal governments.
Florida’s Solar Panel Laws and How They Affect Homeowners
From a legal standpoint, your homeowners’ association must comply with your right to install alternative energy devices; however, an HOA may impose reasonable regulations as long as these regulations do not significantly increase the cost of the system. Moreover, an HOA may prohibit rooftop installations that present a safety hazard or are prohibited by the Federal Aviation Administration or the Federal Communications Commission.
The Florida Solar Rights Act sets out parameters for when an HOA’s attempts to regulate solar panel installations can be deemed violations of a homeowner’s rights. The Florida Solar Rights Act, found in Florida Statutes 163.04, states:
- (1) A deed restriction, covenant, or similar binding agreement entered into or renewed on or after July 1, 2008, may not prohibit or have the effect of prohibiting the installation of a solar energy device on property subject to the restriction, unless the solar energy device violates a specific health, safety, or aesthetic requirement in the applicable deed restriction, covenant, or similar binding agreement that was in existence at the time of purchase
- (2) An association may impose requirements on the size or location of a solar energy device in order to preserve a buffer for vegetative matter for the protection of species that are protected by law, including, but not limited to, scrub-jay birds.
- (3) An association may limit the installation of solar energy devices on common property so long as the limitation does not increase the cost of the device, render the device ineffective, or prevent the device from functioning as designed or intended.
- (4) Nothing in this section shall prohibit the enforcement of a properly promulgated shade provision if the shade device was authorized prior to July 1, 2008.
The Rules on Solar Panels for Florida Commercial Properties
Commercial solar power regulations in Florida are driven primarily by state policies, though local governments may enact ordinances and codes. Section 163.04 of the Florida statutes allows local governments or private entities to acquire and operate renewable energy systems on public land. As such, renewable energy systems can be defined as public infrastructure.
The Florida Building Code governs all construction activities in the state, including commercial solar panel installation. Each county or municipality must adopt and maintain a code that is at least as stringent as the Florida Building Code. Standards and codes can be found in the Florida Statutes Title XXXI, Chapter 255, "Public Property and Publicly Owned Depositories."
Increases in statewide sales tax exemptions for solar energy systems began in 2009 under Section 212.08, Florida Statutes . As of October 2018, solar electric and solar hot water systems are both 100 percent exempt from the state sales tax, and qualifying solar equipment is 100 percent exempt from the state’s gross receipts tax from renting or other usage of commercial buildings. The exemption does not apply to solar equipment purchased before July 1, 2017, though installation permits for those systems are still eligible for the exemption. Local sales taxes still apply.
Depending on the type of business and location, commercial businesses should check with local governments to determine if additional regulations apply. Local jurisdictions can impose impact fees or environmental regulations and impact fees on a case-by-case basis, in accordance with the local government’s jurisdictional authority. In Miami-Dade County, for example, the Solar Code (Code Chapter 18B) requires contractors planning a solar panel installation project to make an appointment prior to permit submission to be sure plans conform with the code.
New and Expected Changes in Florida Solar Power Law
Since the publication of the 2019 Solar Spotlight, legislative changes affecting solar energy in Florida have primarily been at the municipal level. This was largely a result of the ongoing amendments to the Florida Building Code that came into effect in January of this year. For example, in Miami Beach, the City implemented new requirements for rooftop solar panels and their mounting systems to account for the increased wind loads on these systems due to Hurricane Irma and other severe weather events. Similarly, in Orange County, Chapter 15, Article XV, The Residential Solar Code went into effect on January 1, 2020. This article established a permitting process for roof-mounted solar collectors and photovoltaic shingle systems.
In addition to these recent legislative changes, three bills related to the Florida solar industry are also currently working their way through the Florida Legislature. The most prominent among these is HB 7109, which makes a number of changes to the way that the Public Service Commission regulates solar energy systems.
The second bill, SB 1618, would require public entities to provide information on the average annual utility costs of certain public protected buildings and solar energy systems. The final bill, SB 1434, which is still in its infancy in the legislative process, would create a tax exemption for homes that have solar energy systems.
It is unclear what, if any, of the above bills will be passed, and what the ultimate effect on various stakeholders will be. For example, the purchase of solar energy systems is often financed through power purchase agreements (PPAs) or lease agreements. Under current law, both solar customers & solar companies are required to pay documentary stamp tax on the lease price for the solar array. If passed, SB 1434 would eliminate this requirement and, as such, may make solar arrays less expensive for customers. However, for those financing entities who purchase PPAs, they may be forced to pass the cost of the documentary stamps onto the customer in the event SB 1434 is passed.
Challenges and Opportunities with the Florida Solar Energy Market
The cost of solar mounting equipment is one of the main challenges impeding larger renewable energy systems in Florida. Panel manufacturers make a variety of residential systems that are more easily installed on existing rooftops, but there are fewer options for larger roofs or open areas. Mounting equipment, whether built into the panel or a separate (flat) tray design, tends to be relatively costly. Also, installation is somewhat complicated, necessitating an experienced crew. Both of these factors may force builders and owners of multi-family homes to pass on solar. Although some incentives are available for these systems, they do not decrease the amount of hardware needed, nor do they make installing it any cheaper.
In Florida, re-powering existing shallow water and inland oil and gas platforms could provide a significant boost to the wind and solar market. The state is estimated to have over 2,000 deserted or near-deserted platforms which would be ideal for the use of solar panels and wind generators. If they were properly retrofitted, they could generate up to 40 gigawatts of sunshine and wind. Furthermore, if they were coupled with ocean thermal energy conversion (OTEC), they could generate an additional 170 gigawatts of electric power. However, these platforms touch on numerous issues such as aesthetic appearances and environmental impact.
State and federal legislation could provide more incentives to solar expansion if tax credits and depreciation magnets are refined. Currently, residential systems benefit the most from the generous incentives offered under the Renewable Energy Technologies Tax Credit. But most commercial entities are taxed at a lower effective rate than the federal corporate tax rate of 35%. This discrepancy means that many commercial or industrial users may develop, own or lease such equipment, but will not buy it. Improved investment tax credits and various other incentives could not only broaden commercial participation, but could also boost the construction industry in general.
Keeping Up with Solar Energy Laws in Florida
One of the best ways to stay updated on Florida’s solar power laws is through various reliable organizations that monitor and report on energy regulations at both the state and national level. Here are some of the key sources:
1. The Solar Energy Industries Association (SEIA)
As the national trade association for the U.S. solar industry, SEIA provides timely information on all things solar, including federal and state legislation. Their resources section is particularly useful for staying informed about policy updates, or you can subscribe to their newsletter for regular updates.
2. The Florida Solar Energy Industries Association (FlaSEIA)
Locally, FlaSEIA is your closest ally when it comes to understanding and interpreting Florida’s solar power laws. They monitor new legislative developments and technical amendments, alongside other key areas pertinent to solar generation. Membership also provides access to a network of professionals in the field , as well as continuing education opportunities through online courses and events.
3. The Florida Public Service Commission (FPSC) website
The FPSC regulates Florida’s investor-owned electric utilities and has direct oversight of solar generation in the state. The FPSC keeps tabs on current legislation and arranges public workshops to discuss and seek public input on energy issues at hand. One requirement is that each utility have a senior-level employee designated as a solar coordinator to serve as the point of contact on matters related to photovoltaic systems. This coordinator should be familiar with the regulatory standards governing net metering and interconnection, and minimal requirements for net metering systems.
4. Legal Blogs and Resources
Internet blogs covering current laws help keep you up to date with the most recent updates in Florida’s solar policies. Major attorneys specializing in the field of energy law maintain blogs that include elaborate discussions on the intricacies of current laws.