How Net Metering Works in Florida

With a name like the Sunshine State, it’s no surprise that Florida is embracing solar energy. As of 2024, the generation capacity of solar installations in the state reached 17,055 megawatts (MW), thanks in part to enticing financial incentives. Net metering in Florida gives homeowners and businesses an opportunity to minimize their utility bills and make the most of their solar energy installations. 

Ready to learn more about how net metering in Florida works and how it can save you money? Join us for a guide to this popular billing arrangement. 

How Net Metering Works in Florida

So, what exactly is net metering? Sometimes called “net energy metering,” this is an agreement between utility companies and customers who install solar panels on their properties. When private solar panel arrays generate more energy than is needed, businesses and homeowners can send that surplus power back to the grid in exchange for credits on future utility bills. 

Residents and businesses can reap these financial rewards by installing solar panels on their property or subscribing to community solar programs. 

Net Metering Policy in Florida

In 2008, Florida passed House Bill 7135, which required investor-owned utility providers to offer net metering programs to customers with eligible renewable energy systems. Customers of Duke Energy Florida, Florida Power & Light, Florida Public Utilities Corporation, and Tampa Electric Company can install solar panel arrays up to 2 MW, but most utility companies stipulate that each system’s generation capacity must not exceed the customer’s average energy needs. Of course, many municipal utility providers and electric cooperatives in Florida also offer net metering despite their exclusion from HB 7135. 

In 2021, Florida Power & Light received approval to build an additional 22 solar energy facilities throughout the state, doubling the generation capacity for community solar. Customers can earn credits on their utility bills by subscribing to the company’s SolarTogether® program, allowing Florida residents to reap the benefits of net metering without installing private solar energy systems. SolarTogether, the Florida Municipal Solar Project, and similar community solar endeavors are part of the state’s approach to supporting solar energy growth and sustainable power generation.

How Solar Energy is Generated and Managed in Florida

Typical photovoltaic panels, or solar panels, convert sunlight into direct-current (DC) energy using specialized semiconductor materials. This DC power passes through an inverter that converts it into usable alternating-current (AC) electricity, which powers our homes and businesses. 

In a closed-circuit, off-grid system, the renewable energy produced by your solar panels would be stored in a battery before being transmitted to the outlets in your home, but interconnected solar arrays work a little differently. When you participate in net metering in Florida or another US state, your solar installation will include a bidirectional meter that records the amount of energy you source from your utility company as well as the electricity you send back to the grid. Your utility provider essentially acts as an intermediary between your renewable energy system and the broader electrical grid. 

Billing and Credit System in Florida

Your utility company uses data from your solar array’s bidirectional meter to determine the difference between your traditional energy consumption and your green contributions to the electrical grid. During months that you generate more energy than you use, you’ll receive credits on your utility bill to offset future expenses. 

In Florida, net metering customers earn one credit for each kilowatt-hour (kWh) generated, and that credit is equal to the utility company’s retail rate for electricity. At the end of each annual billing cycle, the provider will reimburse customers for their excess energy generation at the utility’s avoided cost rate. In other words, the remaining balance is paid to customers at the rate it would have cost the provider to generate that power, which is lower than the average retail price. 

Economic Benefits of Net Metering in Florida for Solar Energy

Net metering in Florida offers numerous financial benefits for utility customers. Here are some of the ways you can save big bucks: 

Reduced Electricity Costs

On average, Florida enjoys about 237 days of sunshine every year, making it an ideal location for solar energy and net metering participation. Each month that your renewable energy system produces more electricity than you use, the difference will be applied to your bill to offset future utility costs. The ample amount of sunshine in Florida means you can usually expect plenty of clear skies and efficient green energy production. 

According to the Florida Public Service Commission, residents and businesses are saving big through the state’s net metering programs. In 2023, utility companies reimbursed customers over $12 million for the renewable energy generated by private systems. 

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Long-Term Financial Rewards

Reduced monthly bills offer major savings for utility customers, but there are plenty of ways to capitalize on your solar energy array in Florida beyond net metering. Here are a few to keep in mind: 

• Federal tax credits: Homeowners can deduct 30% of the cost of their solar installation through the Solar Investment Tax Credit. 
• State tax credits: Solar panel arrays in Florida are exempt from state sales tax. You also won’t pay additional property taxes despite increased property values due to solar installations. 
• Grants, loans, and rebates: A number of local initiatives offer financial incentives to install solar energy systems in certain parts of Florida. 
• Solar PACE financing: Loans from the state can be used for home improvements like installing renewable energy systems. 
• Solar renewable energy certificates (SRECs): As your solar array generates more and more green energy, you can accumulate renewable energy certificates that can be sold to commercial entities looking to offset their carbon emissions. Unlike net metering, where you send usable electricity back to the grid, SRECs demonstrate that renewable energy has been created, regardless of how it’s used. This may be more lucrative for larger systems, as one SREC equals 1 MW. 

While the average solar panel array in Florida pays for itself in about 10 years, you can see a faster return on your investment by taking advantage of numerous financial incentives.  

Property Value Increase

In 2019, Zillow published a study showing that homes with solar panels sold for around 4.1% higher than comparable properties relying on the electrical grid. However, a more recent analysis demonstrates that those rates have increased to 6.8%. Based on these findings, the average property value could jump by $25,000 with the addition of a solar panel array. 

Energy-efficient homes are increasingly attractive to buyers, as the potential for savings and enhanced sustainability are particularly alluring to a climate-conscious customer base. 

Environmental Benefits of Net Metering

The benefits of net metering in Florida extend far beyond monthly utility bills. Florida is the US state most affected by powerful hurricanes. As sea levels rise and dangerous storms become more common, folks in the Sunshine State are particularly vulnerable to environmental disasters. By encouraging the adoption of renewable energy systems and incentivizing solar, net metering programs in Florida help the state reduce overall carbon emissions. 

In 2023, renewable energy systems that were interconnected with Florida utility companies for net metering generated a total of 2,351,333 kilowatts (kW) – or over 2,351 MW – of electricity. As such, these systems support renewable energy use and promote sustainability efforts throughout the state.

Net Metering in Florida: Everything You Need to Know

Residents and business owners in Florida are drastically reducing their utility bills and carbon footprints through various net metering programs. By sending excess electricity back to the grid, Floridians can earn credits and cash while doing their part to minimize the state’s reliance on fossil fuels and encourage enhanced sustainability for all Floridians. 

The renewable energy experts at Solar Energy World are here to help you harness the power of the sun! Reach out today for a free solar estimate!