Florida Should Move Forward with Net Metering Reform | Citizens Against Government Waste

Florida Should Move Forward with Net Metering Reform

The WasteWatcher

A pair of bills that have been introduced in the Florida legislature would level the playing field among energy customers.  SB 1024 and HB 741 would revise existing laws that allow customers who use solar energy to sell excess electricity produced in their home or business back to energy companies in a process called “net metering.”  The companies deduct the difference between the cost of the solar energy and the cost of non-solar energy from their bills at the end of the month.  While solar customers are getting what they would consider a good deal, this process requires non-solar customers to subsidize the production of solar electricity as well as the infrastructure necessary to support the entire electrical grid.  

Making this exchange even less fair is the requirement that utility companies to buy the excess electricity from solar consumers at retail rates, rather than the wholesale rates at which they buy all other electricity.  Solar users not only make out well by selling electricity far above the market rate, but they also get a reduction in how much they pay to help maintain and improve the electrical infrastructure, even though the state requires the utility companies to continue to connect these residents to the grid and provide them with service. 

As the legislation to change this policy notes, this benefit is not available to everyone.  SB 1024 states, “Customer-owned and -leased renewable energy generation are not available to many public utility customers who lack the financial resources to purchase or lease rooftop solar panels or who reside in in multitenant buildings.”  Consequently, low-income residents who cannot afford to install solar panels on their houses or who don’t own property will not receive the same discounted electricity rates.  

Indeed, solar power predominately benefits wealthier members of society.  In California, for example, only 6 percent of solar networks are in low-income areas, even though they account for 25 percent of the state’s communities.  The installation process costs between $6,000-$27,000, and even with a subsidy program enacted by the legislature, it remains difficult for lower-income residents hit hardest by the increased costs of net metering to get solar energy.

When utility companies are forced to pay solar-producing customers a higher rate for their excess energy, they must offset the losses by increasing the cost to distribute electricity to all residents.  As a result, solar customers will be able to keep costs low while less fortunate residents who cannot afford solar panels or do not own their residences will be forced to pay the higher rates.

Rather than allow this system of subsidized solar power to continue, the Florida legislature should move forward with consideration of SB 1024 and HB 741.  Instead of forcing utilities to pay wholesale prices for excess solar energy, the bills require the sale of excess electricity “at the public utility’s retail rate.”  Despite claims to the contrary, the bills do not put an end to the benefits that solar users will experience by using solar power.  Residents with solar power will still receive benefits, but at a lower rate. 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. 

Advocates of net metering claim that the subsidies are necessary to expand the solar industry in Florida.  However, these subsidies have been in place since 2008, and if net metering was designed, at least in part, to allow solar companies to get off the ground and enter the market, it has not worked as intended, since solar accounts for less than 1 percent of energy usage in the Sunshine State, lower than the 1.5 percent national average.    Instead of continuing to prop up the solar industry through artificial electricity rates for the unforeseeable future, the legislature should take steps to bring solar power into the open market as an equal participant.

Enactment of either SB 1024 or HB 741 will remove an unfair subsidy for solar power and reduce disparities in electricity bills.  Customers who cannot afford to install solar panels or do not own property on which to build them should not pay higher costs for electricity and subsidize wealthier Floridians.  Now is the time for solar power to stand on its own two feet and compete in a free market without Tallahassee placing its thumb on the scale.

Sign Up For Email Updates

Optional Member Code