Aptly nicknamed the Sunshine State, Florida has massive solar potential, making it one of the best states for solar installations. Therefore, it’s unsurprising that Florida ranks third in the nation for solar power, according to the Solar Energy Industries Association.
However, Florida has seen rapid solar growth despite — not because of — its solar policies, which are somewhat lackluster compared to other states with strong solar potential. Unlike over half of the U.S. states, Florida has no renewable portfolio standards. These policies encourage or require energy providers to supply energy for low-carbon or zero-carbon emission sources.
What incentives does Florida have?
Compared to some other states, such as New Jersey, Florida doesn’t have many strong solar incentives. It does not have a direct solar rebate program. The only incentive that should play a notable role in your consideration of solar panels is the federal solar tax credit.
Below is an overview of Florida’s local incentives, as well as the federal tax credit, and how much you can expect to save with them.
Solar sales tax exemption
Incentive value: 6% of the system’s purchase value
Frequency: One-time
When you purchase a solar power system in Florida, you will not have to pay the state’s sales tax on it due to the state’s sales tax exemption for solar energy and combined heat and power (CHP) systems.
As long as the equipment you install is certified by the Florida Solar Energy Center, the exemption applies automatically when you purchase your system.
Property tax abatement for renewable energy property
Incentive value: Varies based on property and system type and size
Frequency: Ongoing
The value of your property will increase after installing a solar panel system. Normally, your property tax goes up when the property value increases. However, Florida’s property tax abatement for renewable energy property means your tax value will not increase despite an increase in home value.
As with the sales tax incentive, you don’t need to take any action to claim the property tax exemption. Your local assessor simply excludes the value added by your solar panels when assessing your home’s value.
Florida property-assessed clean energy financing
Incentive value: No direct savings
Frequency: One-time
Florida’s Florida property-assessed clean energy (PACE) program allows homeowners to borrow a loan for their solar system and repay it through added property taxes. PACE financing is an excellent solar panel financing method, allowing Florida homeowners who are financially ineligible for traditional loans to benefit from a simpler solar loan.
Because PACE loans are attached to the property and not the system owner, the loan automatically transfers to the home’s next owner when you sell the property. You can apply for a PACE solar loan through the website for the Florida PACE Funding Agency.
Note that each county in Florida is responsible for approving the offering of PACE finances. Be sure to check if you live in an eligible county.
Net metering
Incentive value: Varies based on utility and energy values
Frequency: Ongoing
The Florida Public Service Commission mandates net energy metering to its electricity customers. If you have a grid-interconnected system with a bidirectional meter, you can send excess solar energy back into the electric grid.
Each kilowatt-hour of excess energy is carried forward at the utility company’s retail rate to your next bill for up to 12 months. At the end of a year-long billing period, the utility will pay you for any remaining energy credits at the utility’s avoided cost rate.
To apply for the net metering program, you must apply for grid interconnection with your electricity provider. In most cases, your solar company will handle the application.
What are the federal solar tax credits?
The federal solar tax credit, also known as the ITC (investment tax credit), is the incentive that offers the maximum savings to Floridians. When you install solar panels on your home, you receive a tax credit equivalent to 30% of your system’s purchase cost. You can use this credit for upcoming income tax payments.
Effectively, this reduces your system’s net pricing by 30%. Let’s say your system costs $15,000 in total; the ITC can save you about $4,500 in income taxes. You can apply for the ITC by submitting IRS Form 5695 when filing your income tax.
Are solar panels worth it in Florida?
Solar panels are worth it in Florida, as the state’s strong solar potential helps you generate high amounts of energy to significantly reduce your energy costs. Solar also offers other benefits such as increased home value, energy resilience and a positive environmental impact.
Utility bills
Florida residents pay an average electricity bill of $155 per month, according to the Energy Information Administration. This is the highest monthly cost among the South Atlantic states. Based on this number, you might spend between $37,000 and $56,000 on electricity over the course of 20 to 30 years — the standard life span of a solar system, according to the International Association of Certified Home Inspectors.
A solar power system can offset most or all of your grid power consumption, reducing or eliminating most of your electricity bill. Our November 2023 solar survey showed that the average cost of solar panels is $11,155. Considering this number, a Florida resident could save around $36,000 on energy bills over the system’s life span.
Energy independence
Another important benefit of going solar is owning your energy supply, which creates energy independence for you and your family. Installing solar protects you from the impact of power price hikes.
Your energy independence is most noticeable when you install solar batteries with your panels. A battery storage system can keep your home’s essential appliances running through a blackout or a brownout, preventing any inconvenience caused by the lack of power.
Maintenance
Solar power is one of the few sophisticated technologies that require negligible maintenance. All movement in solar panels happens at the electron level, such as with a television. In other words, there are no moving parts and, therefore, no wear and tear.
The only occasional maintenance that rooftop solar energy systems need is cleaning the solar panels so their power generation values don’t drop. In most places, a few instances of rainfall per year is sufficient. If you live in a location with extra dust or dirt, you can wash the panels with a hose or consider cleaning services for nominal costs.
What’s next?
Florida has extraordinary solar potential but an uninspiring set of solar incentives. However, you can save a good amount of money with the federal tax credit. Once you’re aware of the incentives and decide to move ahead with your solar plans, start researching solar companies that best suit your family’s needs.
Many solar companies operate in Florida, which means choosing the perfect installer is not going to be easy or fast. When researching installers, request quotes from multiple companies and compare them thoroughly. Remember that the best solar companies offer high-quality solar equipment, strong warranties and reliable customer service.
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