Florida bill would cut solar net metering compensation


Florida Senator Jennifer Bradley filed a bill with the state legislature which aims to alter the state’s existing net metering program.

Florida’s net metering program was established in 2008 under Florida Administrative Code Rule 25-6.065. Within that rule, residential and commercial customers with systems less than 2 MW in capacity are eligible to sell their excess generation back to the utility at the full retail electrical rate on their monthly bill. To calculate a customer’s annual excess generation credit, compensation is based on the avoided cost to the utility for the power it would otherwise have had to generate. This calculation can vary from utility to utility, depending on their methodology.

The guidelines apply to customers of investor-owned utilities, like Florida Power and Light (FPL). Municipal utilities and electric cooperatives are able to set their own credit rates for net metering.

Bradley’s bill would change the existing net metering structure from one that promotes the development of renewable energy resources in this state, to one that  purports to “continue” development “in a manner that is fair and equitable to all public utility customers.”

The basis for the change to the code relies on the cost-shift argument. As Andrew Sendy, CEO of SolarReviews.com explained in an op-ed for pv magazine USA, “Solar consumers produce their own solar power on-site, meaning that they are not using their distribution and transmission systems (aka “the grid”). Therefore, the argument goes, they [net metering customers] are not paying their fair share of upkeep of the grid. And since they aren’t paying for it, someone else obviously has to—and so they claim those costs shift to non-solar customers.”

The language of SB 1024 echoes that rhetoric, claiming that, “The substantial growth of customer-owned and -leased renewable generation has resulted in increased cross-subsidization of the full cost of electric service onto the public utility’s general body of ratepayers.”

Sixteen state-level studies, according to the Solar Energy Industries Association, have disproven the cost-shift argument, as has a national study, completed by Lawrence Berkeley National Lab.

Berkeley found that 40 of the 43 states and Washington D.C. with net metering programs have a negligible cost increase attributed to solar, and that the cost picture remains this way until solar penetration meets 10% of a state’s generation portfolio.

SB 1024 calls on the Florida Public Service Commission to set up a successor net metering program by January 1, 2023. The new program is required to:

  • Ensure that public utility customers owning or leasing renewable generation pay the full cost of electric service and are not subsidized by the public utility’s general body of ratepayers
  • Ensure that all energy delivered by the public utility is purchased at the public utility’s applicable retail rate and that all energy delivered by customer-owned or -leased renewable generation to the public utility is credited to the customer at the public utility’s full avoided costs.

The bill would also allow utilities to add in base facilities charges, electric grid access fees, monthly minimum bills, or other fixed charges to customers’ bills in order to ensure the utility recovers their cost of serving net metering customers.

Additionally, if the bill were to pass, existing net metering customers who had their system operational before Jan. 1, 2023 would be grandfathered in to their previous compensation rate for 10 more years.

In response to the bill’s introduction, Justin Vandenbroeck, president of the Florida Solar Energy Industries Association that, while the organization is still analyzing the full impact of the legislation, “Initial modeling suggests this legislation has the potential to set the rooftop solar industry back nearly a decade.  Erasing the thousands of jobs, consumer choice and savings, along with the resiliency benefits that rooftop solar offers to Floridians.”

Over the summer, Green Cove Springs, Florida, passed an ordinance to halve the net metering rate. The city buys its power from a municipal power agency, rather than an investor-owned utility, so the town board was able to pass the ordinance.

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