Residential solar power does not make financial sense for many Floridians.
By Kurt M. Glacy
Significant barriers to going solar have been overcome in Florida. However, it remains a mystery to many why the “Sunshine State” has relatively few homes with solar panels so far. The truth is that the market driver for going solar is primarily the price of power from utility companies, not the cost of the equipment and installations, or tariffs on off-shore panels (some of the best panels have been Made in America for many years). In comparison to other states, Florida has relatively cheap rates for electricity. In California, Arizona, and Massachusetts, for example, the cost of electricity often makes it a financial no-brainer for going solar. The offset generated by having solar on your home is easy to justify in those states because the investment cost is less than the related power bills both in the near-term and long-term. With lower power rates like we have in Florida, people need to be very careful about getting the financial facts about solar because the numbers may not make sense right away.
People are commonly told by telemarketers and salespeople that they will save money immediately and that they can go solar for free or at least for less than they are currently paying for power. The problem is that the truth often turns out to be different from a sales presentation. If you are thinking about going solar, you need to protect yourself by learning three facts:
First, not everyone qualifies for the 30% federal tax credit. This is a non-refundable tax credit which means that your federal tax liability must be greater than the tax credit. You do have up to five years to claim the total credit, but that is often too late for people relying on the entire amount in order to keep their solar payments low. In a recent panel discussion about residential solar power, a local tax preparer shared that a number of her customers had been told they would get the full 30% right away. She said their faces fell when they realized that they were going to suffer through years of higher payments and interest because they would not get the credit they were expecting.
Second, net metering programs may differ between the various utility companies. Building an over-sized solar system may actually cost you more because what you earn back can be less than the cost of the system. Rather than using solar to try to neutralize your current electric bill right away, it usually makes sense to make your home as energy-efficient as possible, and then building a solar system to offset your new usage levels. A good rule of thumb for solar is to “reduce then produce”. In terms of net-metering, it is important to consider ways to pull less energy from the grid both during the day and at night. By incorporating battery storage systems with solar power production, you can capitalize on the energy that you produce during the day by using that energy after the sun goes down. Your power can also be available when the grid is down due to storms or other technical failures.
Finally, not all solar installations and equipment are the same. When people don’t really understand how solar works, they tend to focus only on price and what they find on the internet. When shopping for an excellent solar power system, look to both the quality of the installation and the quality of the components. Excellent equipment installed poorly may not be any better than lower-quality equipment installed well. If not done properly, solar can be a liability rather than an asset because of the risk to your property and a barrier to the sale of your home later on.
Solar power is a good idea for many of us who want to save money in the long-run and protect our families and environment, but there is less room for personal financial error here than in other states. If you are going to go solar, then get the facts before signing a contract. Even if solar isn’t right for you today, you can still make a difference in your power bill by changing some habits and by making your home more efficient. Doing something is better than doing nothing.
Kurt Glacy is a Spring Hill resident and a Solar Energy Consultant for Erus Energy. He has had solar power systems on his own homes for the last 10 years and frequently presents about solar to non-profit groups, community groups, and individuals. He also posts information videos and solar tips on the Spring Hill Solar page on Facebook. Kurt is an active member in the Greater Hernando County Chamber of Commerce, the West Pasco Chamber of Commerce, The Greater Temple Terrace Chamber of Commerce, BNI Winning Edge, and various other business and environmental groups.