Florida Gov. Ron DeSantis Expected to Sign Bill to Cut Cross-Subsidies to Roof-top Solar Owners

A bill that would limit the credits owners of solar roof-top panels receive awaits Gov. Ron DeSantis signature, after passing both Houses of the Florida legislature in March.

Although supporters and opponents of the bill continue to lobby DeSantis to sign or veto it respectively, he is expected to sign this net metering bill that pitted Florida’s politically powerful investor-owned utilities against advocates for continued green energy subsidies for roof-top solar installations from general ratepayers.

Having already passed the House, H.B. 741/S.B.1024, it passed the Senate on a bi-partisan basis, with 24 senators, including some Democrats, voting in favor of the bill, and 15 senators, including some Republican’s voting against its passage.

Ending Cross-Subsidies

The bill would reduce the cross-subsidies those who own or lease roof-top solar systems receive when they sell excess electricity to the grid through a policy known as net metering.

Currently, Floridians with solar systems enjoy payments set at the retail rate because of a 15-year-old policy designed to incentivize the installation of roof-top systems and thus encourage the development of the solar industry when it was first starting out. In addition, under the current law, roof-top solar owners do not pay their full share of the grid maintenance associated with their solar systems, which allows them to both send and receive electricity and to the electric power system.

If DeSantis signs the bill into law, it will require the Florida Public Service Commission (FPSC) to establish new net metering rules to ensure public utility customers owning or leasing renewable generation pay the full cost of electric service and are not subsidized by the utility’s general body of ratepayers.

Under the new law, new roof-top solar owners would pay the full retail rate for any electricity they draw from the grid and be paid the avoided cost of the any excess power they sell back to the grid, which is approximately the wholesale rate, rather than retail rate. Existing roof-top solar owners already incorporated into the power system under the present law would be permitted to remain under the old rules for a transitionary period to be set by the FPSC.

Current Policy Is Regressive

This law will make the system fairer for general ratepayers who don’t get the benefits of solar credits, says Florida state Sen. Jennifer Bradley (R-Orange Park), who sponsored the bill

“This is a regressive policy,” said Bradley of the existing solar law on the Senate floor during the discussions of her bill. “This drives up costs and shifts it to all ratepayers.”

This bill will bring a welcome end to regressive policies which benefit one group of electric power users and providers, those who own or lease roof-top solar systems, at the expense of general ratepayers, says Florida Power & Light Co., the state’s largest electric company, which supported the bill.

“We are pleased Florida lawmakers voted overwhelmingly to pass bi-partisan legislation aimed at modernizing the state’s outdated net metering rules,” said FPL in a statement emailed to E&E News. “It importantly directs the Florida Public Service Commission to phase out this regressive tax and make solar energy more equitable for all Floridians, not just the fortunate few.”

Solar Subsidies Are Unfair

It’s long past the time to cut subsidies for solar power which unjustifiably receives more taxpayer support than any other energy source, says James Taylor, president of The Heartland Institute, which co-publishes Environment & Climate News.

“The U.S. Energy Information Agency reports that solar power receives more taxpayer subsidies than all conventional energy sources combined,” Taylor said. “It is high time policymakers make solar power sink or swim on its own merits.

“Good for Florida policymakers waking up to that reality,” Taylor said.

The current law is regressive forcing utilities to pay the retail price for electricity from solar owners instead of the wholesale price, meaning relatively wealthy Floridians who could afford to install expensive distributed generation systems on their homes are getting reimbursed not only for the electricity they provide but also for the costs associated with building and maintaining the electric grid, says Tim Benson, a senior policy analyst at The Heartland Institute.

“Net metering causes a re-allocation of transmission, distribution, and reliability costs to those customers who do not own distributed generation,” said Benson. “Such cost-shifting impedes social equity, because rooftop solar owners have generally higher incomes than others, so lower-income ratepayers end up paying extra to subsidize higher-income customers, making, net metering is just another welfare program for the upper-middle class, at the expense of the poor.”

Unreliable Solar Adds Costs

No one questions whether those who own roof-top solar system should be paid for the electric power they provide, but they add costs to the electric power grid as well, and this should be factored in, ensuring general ratepayers are compensated for the intermittency and inefficiency distributed solar systems add to the power system, says Benson.

“Although owners of rooftop solar panels should be paid for the electricity they sell back to the grid, they should be paid at the same rate conventional sources are paid, reflecting the true wholesale cost of electricity,” said Benson. “It is particularly unfair for solar owners to be paid for the costs of maintaining the grid because the intermittency of solar power actually increases those costs.”

Kenneth Artz (KApublishing@gmx.com) writes from Dallas, Texas.