Solar Power in Florida September 20, 2016 Shelly Whitworth Renewable Program Manager Tampa Electric Company Background: Florida’s Regulatory Environment • Scope of comprehensive regulation of investor-owned electric utilities by the Florida Public Service Commission (FPSC) – Rates – Reliability – Territorial boundaries – Quality of service – Conservation/DSM – Safety • PW Ventures Decision (1988) – Florida Supreme Court clarified that only electric utilities are allowed to sell electricity at retail – The sale of electricity to a single retail customer makes the provider a public utility subject to FPSC regulation – Court ruled that sales of electricity outside the FPSC’s jurisdiction would lead to uneconomic duplication of facilities • Duke Energy Decision (2000) – Florida Supreme Court rules that non-utility entities could not access the State of Florida’s power plant siting process – The court clarified that the Power Plant Siting Act and the Florida Energy Efficiency and Conservation Act were not intended to authorize the determination of need for a power plant with output that is not fully committed to serving retail load • Relevance to solar: 3rd party sales of power at retail are prohibited in Florida Solar Potential Florida is called the “Sunshine State” • Solar Energy Industries Association ranks Florida 3rd for rooftop solar potential • NREL ranks Florida 8th for rooftop solar potential and 9th for overall solar energy potential • Florida has lots of sunshine, but lots of clouds, too, unlike southwestern states Policies Favoring Solar: Net Metering and Interconnection • FPSC net metering and interconnection rule adopted in 2008 • Intended to encourage development of customer-owned renewable generation • Establishes 3 tiers that get favorable treatment – Ranging from 10 kW to 2 MW • Net metered customers offset their monthly energy usage with self- generated energy at different times of month and during year – Retail-rate net metering (one for one kWh credit) – Excess production is carried over to subsequent months – Net excess production at the end of the year is credited by the utility at the as-available energy rate • Requires utilities to maintain standard interconnection agreements for expedited and inexpensive interconnection of customer-owned renewable generation. Other State Incentives Favoring Solar • Property tax exemptions – Residential – constitutional amendment approved by voters in 2008; became law in 2013 – Commercial – constitutional amendment approved by voters in 2016 • Sales tax exemption – Exempts from Florida sales and use tax sales of "solar energy systems" • Utility solar rebate program – Part of 2009 DSM goals – Aggregate total for all FEECA utilities - $24.5 million per year, recoverable through conservation cost recovery clause – Discontinued in 2015 • Special one-time statutory cost recovery for 110 MWs of zero- emitting carbon resources for electric utility development – Costs recoverable through the Environmental Cost Recovery Clause – FPL responded with three solar projects totaling 110 MWs Currently Installed and Planned Solar • Florida has approximately 8,600 interconnected solar PV systems totaling approximately 80 MWs. • Florida utilities have 228 MW of solar generating capacity (owned or contracted) and have plans to construct or contract for an additional 1,185 MWs over the next 10 years. – 730 MW utility-owned solar – 155 MW contracted solar – 300 MW as-available energy contract solar facilities • Solar Energy Industries Association (SEIA) reports Florida will install more solar this year than all but six states • Community solar – several Florida utilities have community solar programs. – Notable example is Orlando Utilities Commission: Customers purchase “shares” of solar power and are billed as though they are directly consuming the output from their share of the facility. Why Not More Solar? • Florida not a top-ranking state for installed solar capacity – NREL ranks Florida 14th – SEIA ranks Florida 17th • With the exception of net metering, Florida has avoided policies aimed at stimulating the development of solar to a point that intra-rate class subsidies become problematic – No RPS or feed-in tariff requirements for electric utilities • Challenges for solar – Florida has followed an avoided cost standard for cost recovery associated with renewable generation, including solar (exception: net metered customers) – Emphasis on low rates to encourage economic development and job growth – Low utility rates make proving cost-effectiveness for solar more difficult – Florida Supreme Court’s PW Ventures decision prohibits third-party solar providers from selling energy output of provider-owned solar generators at retail to the public – Clean Power Plan stalled at federal level has reduced pressure on utilities to meet associated carbon limits through solar development The Future of Solar • Solar costs are declining – Utility scale projects are the most cost-effective and provide larger contributions to solar growth – about half the cost of residential rooftop – Tampa Electric is seeing residential rooftop installations at around half the cost of systems just 5 years ago • Concerns about lack of fuel diversity – Concerns about fuel diversity weigh in favor of increasing solar capacity – Florida is heavily reliant on natural gas – about 60% of net energy for load and growing • Concerns about the environment/global warming – Government mandates to reduce CO2 may be inevitable Constitutional Amendments • Competing ballot initiatives – Floridians for Solar Choice ballot initiative • Limits or prevents government and electric utility imposed barriers to supplying local solar electricity (non-utility supplied solar electricity from a 2 MW or smaller facility to customers at the property or contiguous location • Barriers include government regulation of local solar electricity suppliers’ rates, service and territory, and unfavorable electric utility rates, charges, or terms of service imposed on local solar electricity customers. • Overturns PW Ventures and allow direct sales (in competition with the local utility) • Failed to get enough signatures by deadline, but organizers are still gathering signatures for future elections – Smart Solar Amendment • Establishes the right for consumers to own or lease solar equipment installed on their property for their own use • Preserves state and local government ability to protect consumer rights and public health, safety and welfare • Ensures that customers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do • #1 on November 2016 ballot.