Solar power in the Sunshine State

Last week we discussed the Florida Public Service Commission's decision to deny a permit for a proposed coal-fired power plant near the Everglades, and how Florida Power and Light now proposes a nuclear power generating facility instead.

Like most states in the South, Florida is heavily dependent on fossil fuels for energy, with 80% of its electrical generating capacity based on non-renewable sources that pollute the environment. According to the U.S. Department of Energy, Florida gets 37% of its power from coal, 21% from natural gas, and 22% from petroleum. Clean, renewable sources (wind, geothermal, biomass, and solar) represent only about 3% of Florida's power generating capacity, and the rest (18%) comes from nuclear power plants.

With growing political and environmental opposition to fossil fuel energy sources (not to mention the fact that they will eventually run out), and concerns about the safety and cost of nuclear power, what are the alternatives?

As the Sunshine State, Florida is uniquely situated to exploit cheap (practically free), clean, renewable solar power. In fact, so is most of the South. Only the Southwestern United States is better situated to most effectively utilize solar power:


(Source: National Renewable Energy Laboratory)

To that end, Florida's 2006 Energy Act includes a solar energy incentives program to encourage installation of solar water heating and photovoltaic (PV) systems throughout the state.

The program provides cash rebates for qualifying solar hot water heating systems, solar pool heaters, and solar PV systems. For PV systems, the rebate is $4 per watt of rated capacity up to $20,000 for residential systems and up to $100,000 for commercial installations, including apartments and condos. Solar hot water heating systems are eligible for rebates up to $500 for residential and $5000 for commercial applications. Residential solar pool heaters are eligible for a $100 rebate. (This is in addition to federal solar energy tax credits of up to $2000).

The Florida Legislature allocated $2.5 million for rebates during the first year of the program, which started on July 1, 2006. So far, the program has paid approx. $2.2 million in rebates. (Other Florida energy incentives include $11.5 million in grants, $11 million in tax credits, and $4 million in sales tax refunds for renewable energy programs involving development of hydrogen and biofuel technologies.)

We spoke with Jim Tatum, Solar Programs Manager for the Florida Energy Office in the Florida Department of Environmental Protection (which oversees the solar incentives program) about the program's success so far.

Mr. Tatum said that the program has been very popular. Since July 1, 2006, the FEO has received 2446 applications, and 1889 qualifying installations were approved for rebates. 1101 were for solar hot water heating systems, mostly residential, and 707 were for swimming pool heaters. According to Mr. Tatum, the solar system rebates represent an energy equivalent of 21 million kilowatt hours annually. (If our math is correct, this is enough energy to power 3500 homes.)

We were surprised to learn that only 76 applications for PV systems had been approved, but Mr. Tatum said that solar water heating systems are far less expensive to install and therefore more popular. He said, however, that the rebate program typically covers about 40% of the cost of installing a solar energy system.

There is no disputing that solar PV systems are still expensive. The payback period depends on a variety of factors, including system type and efficiency, geography, installation site, consumption, utility rates, incentives, and other considerations.

Using this calculator, we estimated that a typical residential PV system would cost approx. $37,500 and the payback period would be nearly 40 years for a home in Tennessee. Florida's incentives (and geography) would reduce this by more than half, with a payback of less than 18 years. These costs will continue to decrease as solar technology advances and manufacturing output increases with demand.

Mr. Tatum noted that some recent commercial PV installations in the Tallahassee area had maxed out at the $100,000 rebate limit. One is Notary Public Underwriters, which recently installed a 25.2 kilowatt PV grid-connected system. Another is the Tallahassee Antique Car Museum, which installed two 25 kilowatt systems which are eligible for a total of $200,000 in Florida solar rebates and $21,000 in federal tax credits. Another high profile installation is Ted's Montana Grill, which is owned by Ted Turner who recently started his own solar energy company.

One important, money-saving and environmentally friendly feature of solar PV systems is the ability to "net meter." In this configuration, the solar PV system is interconnected to the electric utility so that excess electricity is fed back into the power grid, effectively "running the meter backwards." This enables homeowners and businesses to sell excess power generated during periods of low demand back to the utility company, reducing both the amount of power needed from conventional sources and the related pollution they create.

Solar PV experts say this is far more efficient and cost-effective than expensive battery storage systems. Mr. Tatum said there is currently no Florida state law mandating net metering for grid-connected systems, but that "more and more utilities are agreeing to it."

Florida is clearly leading the way in solar incentives around the South. Here's a brief summary of solar water heating, photovoltaic, and renewable energy incentives, net metering regulations, and building energy codes in other Southern states:
 

(Source: North Carolina State University DSIRE Database of State Incentives for Renewables and Efficiency)

It's interesting to note that some states are taking a more hesitant approach to net metering regulations. States listed as "limited" place various limits on the amount of energy that can be sold back into the grid, or exempt some utilities from net metering requirements altogether. For example, Kentucky exempts TVA from the state's net metering regulations. Although net metering may represent some technical challenges for local utilities, it's not difficult to imagine that some of these "loopholes" are the result of intense lobbying by big corporate utility concerns.

Uniform net metering regulations and interconnection standards would help promote distributed solar PV systems, as would more federal and state rebate/credit programs to help "jump start" solar technology development. These are environmental and economic policy issues that should be taken up in state legislatures and in Congress going forward.

Here are some other interesting solar PV energy facts from the U.S. Department of Energy:

• Compared with electricity generated from fossil fuels, each kilowatt of PV-produced electricity offsets up to 830 pounds of oxides of nitrogen, 1,500 pounds of sulfur dioxide, and 217,000 pounds of carbon dioxide, every year, according to a report from the National Renewable Energy Laboratory.

• Studies have shown that, depending on the type of PV technology, the clean energy payback of a PV system ranges from one to four years. With life expectancies of 30 years, 87% to 97% of the energy produced by PV systems will be free of pollution and greenhouse gas emissions.

• Today, the PV industry generates about 3,000 jobs for every $100 million of module sales. If the industry continues to grow at the rate we've seen in the last few years -- an average of about 36% -- it could employ some 150,000 Americans in high-value, high-tech jobs within 20 years (Solar Electricity: The Power of Choice, 2001).

• Contrary to some popular notions, the landscape of a world relying on PV would be almost indistinguishable from the landscape we know today. ... In the United States, cities and residences cover about 140 million acres of land. We could supply every kilowatt-hour of our nation's current energy requirements simply by applying PV to 7% of this area -- on roofs, on parking lots, along highway walls, on the sides of buildings, and in other dual-use scenarios. ... We still wouldn't have a land use issue, even if we didn't use roofs for PV. We would need only 10 million acres of land -- only four-tenths of one percent of the area of the United States -- to supply all of our nation's energy using PV.