Florida state legislators approve net metering policy changes

Published on March 08, 2022 by Kim Riley

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The Florida Legislature is set to send an approved bill to the governor that would begin reducing the net metering rate rooftop solar homeowners and businesses get paid starting in 2024.

The Florida Senate on Monday voted 24-15 to approve House Bill 741. The state House on March 1 passed the bill, 83-31.

Now headed to the governor’s desk to be signed into law, the bill will revise existing laws for net metering — a billing tool used in numerous states that dictates how utilities reimburse rooftop solar owners for the excess power they produce and send back to the grid.

The lawmakers’ action is good news for Florida Power & Light Co. (FPL), the state’s rate-regulated electric utility serving more than 5.7 million customer accounts. 

“We are pleased Florida lawmakers voted overwhelmingly to pass bipartisan legislation aimed at modernizing the state’s outdated net metering rules,” FPL spokesperson Christopher McGrath wrote Daily Energy Insider in an email.

McGrath said the state’s old rules have fueled a rapidly growing, multi-million-dollar annual subsidy paid for by the vast majority of Floridians who don’t have rooftop solar in support of those who do. And FPL, which plans to install 30 million solar panels by 2030, has said that 5.6 million of its customers have subsidized roughly $30 million annually in fees for the state’s 90,000 homeowners with rooftop solar. 

“FPL leads the nation in expanding cost-effective, large-scale solar, and we also support our customers who choose to buy private rooftop solar systems,” he said. “This legislation would take an important step toward balancing the costs of solar expansion in the state.”

McGrath also pointed out that while the bill still would potentially lock in hundreds of millions of dollars in extra charges for non-rooftop customers, “it importantly directs the Florida Public Service Commission to phase out this regressive tax and make solar energy more equitable for all Floridians, not just the fortunate few.”

Specifically, the bill requires the Florida Public Service Commission (PSC) to adopt a new program for rooftop solar owners by 2029 that would eliminate subsidies and charge them “the full cost of electric service.” Any solar panel owners who do sell energy back to the grid would be paid a flat “applicable retail rate,” according to the bill.

Additionally, utilities will be permitted to recoup more fees by petitioning the PSC to “help ensure that the public utility covers the fixed costs of serving customers who engage in net metering.”

“Residents with solar power will still receive benefits, but at a lower rate,” according to a March 1 blog written by Ryan Lanier, state government affairs associate with Citizens Against Government Waste. “Utility companies, meanwhile, will not be forced to pay exorbitant prices for the excess electricity, and non-solar customers will no longer subsidize the solar customers.” 

Julio Fuentes, president of the Florida State Hispanic Chamber of Commerce, agreed with FPL’s McGrath and called net metering a “subsidy” that “effectively taxes all citizens to support the affluent.” Fuentes also said it “harms small businesses, the people they employ and the customers they serve,” according to his op-ed published Jan. 29 in The Palm Beach Post.

“As more homeowners invest in solar power, the impact will quickly grow for the vast majority who do not have that option,” wrote Fuentes. “It is well past time to change net metering laws to address this growing problem.”

If enacted, the bill will provide new net metering customers connected in 2024 and 2025 with energy credits worth 75 percent of the current rate, with the rate decreasing to 60 percent in 2026 and then to 50 percent in 2027. And public utility customers who own or lease solar panels and get an application approved before 2029 will be able to retain their rates for 20 years, according to HB 741, under which subsidies become non-existent by 2029.

Florida Rep. Lawrence McClure (R-Dover) sponsored HB 741, and state Sen. Jennifer Bradley (R-Fleming Island) supported the measure in her chamber on Monday. “This bill is fair. It’s a thoughtful glide path to get us to a no subsidy,” Bradley said on the floor prior to the Senate vote.

Meanwhile, opponents of the bill say it could quash growth in the state’s solar power market because potential customers are losing a financial incentive to install rooftop solar. And they say tens of thousands of solar-related jobs will be lost.