The Guardian has published a revealing piece about how Florida has low household solar penetration compared to some Northern states, because households can’t sell their energy back to the grid. My question – why are buyback schemes needed to make Solar attractive?
Sunshine state shuns solar as overcast New York basks in clean energy boom
Despite its natural advantages, disincentives mean Florida has few solar panels but the Empire state’s policies have boosted installed solar capacity by 800%
Oliver Milman in Miami and New York @olliemilman Monday 27 March 2017 18.00 AEDT
If you were to fly a camera-laden drone several hundred feet above Pani Herath’s house in south Miami, Florida, it would become clear his rooftop is an oddity compared with virtually all of his neighbors. Despite living in a part of the world that bakes in the sun throughout the year, just a few thousand people across Florida, such as Herath, have installed solar panels.
“Unfortunately, not many people know about solar. That’s why nobody around here has solar at all,” said Herath. He has become an object of curiosity in his tidy neighborhood, where watering the manicured lawn and scooping debris from the pool is of greater concern.
“I was telling my friend next door about it and he was wondering why I would want to go solar,” said Herath, who has had solar-heated water for the past six years and is now looking to lower his electric bills with more panels. “I wish that everybody would know about it.”
…
In many states, a solar company can lend panels to a homeowner and then sell the cheap power generated directly to the owner. But that isn’t allowed in Florida. Nor is a homeowner able to sell on his or her generated solar power to anyone else, such as a neighbor or tenants.
By Florida logic, anyone with rooftop panels is providing a utility and therefore must be able to provide power 24 hours a day. And as only the state’s vast monopoly utilities, such as Florida Power & Light, can do this on demand, households are barred from this sort of third-party ownership.
“It’s ludicrous that Florida outlaws such a thing,” said Justin Hoysradt, chief executive of Vinyasun. His West Palm Beach company has instead attempted to boost solar sales through loans structured like car or mortgage repayments.
“Places like New York, Massachusetts and California have recognized the jobs and environmental benefit of solar. We have more of a challenge.”
…
If the raw economics of solar made any sense, buyback schemes would not be needed to make household solar attractive. Householders could simply switch off the grid supply, and switch their house to cheaper rooftop solar supply, to reduce their electricity bills.
According to the CDC Wonder site, Florida receives an average of 18,581.94KJ/m2 of sunlight every day, but New York State only receives 13,933.79KJ/m2. Solar panels in Florida receive 33% more sunlight than solar panels in New York State.
If solar panels don’t help reduce household bills in a sunny state like Florida, where owners receive 33% more return on investment, how can they possibly make economic sense in New York State?
The reason has to be market distorting government subsidies and energy policies. Government subsidies and energy policies in this case are self evidently causing tremendous resource misallocation, motivating the installation of solar panels in less sunny states. My evidence for the resource misallocation is the simple fact that if market signals were working properly, nobody would install solar panels in less efficient northern locations, until they ran out of optimal southern installation opportunities.
Of course, even sun drenched Florida households are not installing solar panels – because without generous taxpayer funded power buyback schemes they don’t make economic sense. Without subsidies, solar panels can’t compete with cheap, reliable, 24×7 fossil fuel or nuclear generated electricity available straight out of the wall socket.
This gross resource misallocation is a big deal. The money wasted by market distorting government subsidies in New York State could have been spent on hospitals, police, or badly needed infrastructure repair. Or it could simply have been left in the pockets of taxpayers.
Worse, the subsidies for solar panels tend to disproportionately hit poor people. The recipients of these market distorting subsidies are the rich and middle class. Whether they pay through state taxes, or the cost is passed on via electricity bills, poor people who don’t own a home with a nice big South facing roof get slammed – they end up helping to pay everyone elses electricity bill in addition to their own.
The Guardian wishes Florida would follow New York State’s example, by implementing regressive taxes on poor people to subsidise the electricity bills of the middle class. Let us hope Florida sticks to their principles, and continues to refuse to impose this cruelty tax on the poor.
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In Australia we have dropped the feed in tariff so low not worth going solar also we recycle a lot of our wast http://businessrecycling.com.au/info/
There’s lots of passive solar in FL…maybe all the leaks that spring scare people away from spending $$$ on the real solar.
passive is the only real solar. The rest is just a play thing for the rich and self righteous.
There aren’t any where near enough Solar installations in NY, or any state for that matter, to cause a disproportionate redistribution of a utilities overhead costs. That’s the drumbeat of a coal advocate. That, or your just uneducated.
If solar ever makes the kind of penetration that it’s advocates are demanding, then these issues will be a big deal.
The article seems to state that Florida does not allow selling power to the power company.
We have net metering here, also know as reverse metering…when you send power back into the grid, your meter runs backwards:
https://www.fpl.com/clean-energy/net-metering.html
This seems to me would be classified as an incentive, making the original article even more frivolous than I thought originally. This approach while better than forcing electric companies to buy excess electricity, it penalizes electric companies for electricity they provided in exchange for electricity they may not need at the time it is generated.
•Florida Interconnection and Net Metering Rule
https://www.fpl.com/clean-energy/pdf/net-metering-rule.pdf
“If the raw economics of solar made any sense, buyback schemes would not be needed to make household solar attractive. Householders could simply switch off the grid supply, and switch their house to cheaper rooftop solar supply, to reduce their electricity bills.”
Good grief – many households are not occupied during the daytime because the owners/tenants are at work. Did this logic escape the author?
Are you kidding? Are you saying that by not allowing clean energy producing homes to sell back their excess electricity to power companies, Florida regulators are HELPING residents???? “stick to their guns”? WTF is that?
All that glitters is not gold.
The buyback scheme is a special interests scam. Electric companies are forced to buy the electricity at non-competitive prices and at times when the electricity is generated, not when it is needed. It’s like the government forcing you to buy gasoline at Sunoco at twice the competitive rate whenever Sunoco has some to sell. And if your tank is full and don’t need it, well then you still have to pay for it.
Yes this is bad for residents since it artificially raises their cost of electricity and/or taxes to assuage a political fancy.
“….disincentives mean Florida has few solar panels but the Empire state’s policies have boosted installed solar capacity by 800%”
Not familiar with Florida’s alleged disincentives, but giving stuff away free is usually a pretty good incentive. The Empire States basically put up a sign “Free Stuff” and people lined up, not sure what this has to do with the efficacy of solar. If anything, it has to do with the state forcing poorer citizens to pay for free stuff for more affluent citizens.
In fairness, there’s a strong argument that Florida also has problem with market-distorting policies. In Florida’s case, it’s a protectionism argument lobbied for by the incumbent utilities.
The Florida utilities based their lobbying on a ‘stranded costs’ argument. While there’s a kernel of truth there, frankly, that should be a risk of doing business. The answer to a skewed playing field is not to skew it the other way but to level it. Both New York and Florida have a long way to go before their energy sectors can be considered even close to level.
I partially agree with this article but must point out that the government has already distorted the market by creating energy monopolies.
If the monopoly were removed, solar power generation would be attractive during peak hour power consumption when the sun is shining most brightly and ACs are running at full blast.
There are times, when, monopolies are the most cost effective solution. Remove the monopoly, or, oligopoly if not created via political favoritism, and, watch your electric bill rise.