Solar Southwest Florida

Last Thursday FPL took applications for the remaining 2012 solar rebate funds. As expected, funding ran out quickly… as in under two minutes!

My employer had quite a few rebate applicants lined up for solar electric systems. I decided before the rebate website went live that I wouldn’t post the results or my reaction in a knee-jerk manner. While I was angry and disappointed, I wasn’t surprised. Now that the dust has settled, I can respond effectively.

We did secure rebates for some of our customers, but any process that rewards rebate applicants for being able to type fast is just silly. I have criticized the process and the program before, but now I am more convinced than ever that it needs revamping. Its not good for consumers or contractors, and it fails to effectively reach the stated goal of increasing adoption of distributed solar energy in Florida.

I’ve recommended a lottery approach in the past, but that is hardly fair either. I truly believe that the only way to fix the program is to significantly reduce the rebate amount (per watt), or the maximum rebate per customer.

Florida has a sad history of overly-generous solar rebates with unintended consequences. The press from these botched programs feeds two beliefs that are severely damaging to the industry:

1. Solar electricity is only viable with a state or utility rebate. While free money certainly helps, the unintended consequence is that few people are willing to go solar, or even contemplate an investment in solar if the handout is not available. With prices so much lower than just a year or two ago, this is no longer the case!

2. Rebates are not guaranteed. This is the sad result of the Florida Legislature’s failure to fully fund an incentive program that was passed into law and was clearly intended to be funded. The FPL rebate is “guaranteed” to the extent that you follow through with some basic obligations, and to its credit the company has been lenient and helpful toward rebate applicants and contractors.

I applaud FPL’s willingness to implement a solar incentive program. I wish they would make it so much better by reducing the rebate amount, allowing more consumers to participate, helping contractors develop a sustainable industry, and maximizing the amount of installed distributed solar energy with the limited availability of rebate funding.

FPL has announced that the remaining 2012 solar rebate funding will be released on May 3, 2012 for solar photovoltaic (electric) and solar water heating systems.

If you want any chance of getting in on the best solar rebate in Florida history, you need to act NOW. Call your favorite solar contractor (hopefully Fafco Solar) and they will walk you through the application process. Because the rebates are highly competitive and the amount available will be very limited, it is likely that the funding will run out in the first 10 minutes. The online application process requires advance planning and detailed information about the system you intend to install.

FPL Solar Rebates can cover over 30% of the cost of a solar electric installation up to $20,000 for residential and $50,000 for commercial systems. Paired with a 30% Federal Tax Credit and the lowest component costs in history, the total installed cost of a solar energy system has never been lower.

Utility electric rates in Southwest Florida vary quite a bit depending on how much electricity you consume. I created a spreadsheet to calculate what your utility electric rate would be with different utilities depending on the amount of energy consumed.

What you will find is that the effective rate for LCEC is higher for typical residential customers because of the higher fixed customer charge. Another interesting fact is that LCEC netmetered customers with solar electric generation pay more that regular LCEC customers until they consume at least 1,342 kilowatt hours (net). Again, this is because of a higher customer charge.

The rates are current as of April 16, 2012 and include all charges, fees, and taxes.

Note: The Franchise Fee will vary by municipality. I have used 3% to provide a reasonable approximation and comparison. For example, the Lee County fee is 3% and the Cape Coral fee is 3.173%.

SWFL Utility Rate Comparison

Southwest Florida Utility Electric Rate Spreadsheet (Requires Excel 2007 or greater)

It’s a common question. “How many solar panels do I need to power my ### square foot house?”

The answer is not so simple. In fact, I can’t even give you a rule of thumb. Some industries can tell people a reasonable range for sizing equipment, and often building codes dictate sizing of appliances. For example, an A/C company might tell you that on average you need one ton of air conditioning for every 600 square feet of living area for a Southwest Florida home. A plumber might tell you that you need a minimum 50 gallon water heater for a 3 bedroom, 2 bath home. There is no such approximation with solar energy.

The energy used by a home, and more specifically a homeowner, can vary tremendously (note: homes don’t use energy – people do). My 3,000 square foot home uses about 2,000 kilowatt-hours (kWh) of electricity each month. I’ve been at a customer’s 2,500 square foot home that uses 3,500 kWh of energy! That would be a range of 0.67 – 1.4 kWh per square foot per month – hardly a useful range to use as a rule of thumb.

Energy use is complicated. People have very different habits, standards of living, and luxuries.

I was at a customer’s home where they had two refrigerators in the garage. That is the worst place to put a refrigerator in Florida (because of the ambient temperature). But two?! They were wondering why their electric bill was so high despite the installation of solar products. I think I have an idea…

Pool homes consume more energy generally. Old air conditioners and poor insulation cause poor efficiency for cooling. Some people run incandescent lights in their yard 12 hours a day. And many times, habits are the cause.

Even the utility company averages have little value. LCEC and FPL report about 1,100 kWh per residential account. However, that includes small condos, separately metered buildings, manufactured homes, and seasonal residents. It’s not a good metric to use – just about every customer we visit consumes more than the “average.”

What we need to know is how much energy you use. Fortunately, that’s easy to find out. Both utilities in Southwest Florida have online account history that shows you energy use by month. Fafco Solar’s solar advisers can help you figure out how much energy you are using and how many solar panels you need to power your house!

Today I had an FPL representative at my home to test my duct work. I was really just expecting them to pressurize my ducts and place some little blue stickies next to all the leaks found in the attic. I was quite wrong, and very pleased with what actually transpired.

The specialist that arrived (on time) was very professional. She set up the equipment to create negative pressure in the whole house and asked me what I knew about the duct system and the home. She took pressure drop readings at every register and return in the home. I volunteered to walk around and write the readings down since I was interested in the process.

She explained in detail what high and low readings meant, and what levels indicate a problem. We identified about 6 registers that presented worrisome readings where there may be duct leaks. I thought that was the end of the evaluation. Again, I was wrong.

She got up in the attic and carefully inspected and identified all of the places where duct leaks were occurring, prioritizing the search based on the readings taken earlier. Then she put her equipment away and brought out her laptop. She made a detailed drawing of my ducts and registers, and identified locations of each leak. She printed out the results on her portable printer along with rebate certificates and a list of FPL authorized A/C companies that accept the program certificates.

What really impressed me was her prior knowledge of my home. She came prepared with my monthly energy use and knew quite a bit about my bill. We discussed my variable speed pool pump and the FPL On-Call load management program. She made recommendations about the duct repairs and generally about energy efficiency. She took her time and ensured that I was satisfied with the work.

Overall, she was at my home for almost three hours (I have two air handlers). It was a very thorough inspection, and I am sure I will save money in the long term as a result of the evaluation. I received the maximum $154 in certificates to go toward duct repairs.

The cost of the evaluation is $30 for the first A/C and $15 for each additional. More information is available  here: http://www.fpl.com/residential/energy_saving/programs/ac_duct.shtml

The Solar Energy Industry Association (SEIA) reported that Florida dropped from #8 in 2010 to #17 in 2011 for the amount of solar electricity capacity installed. In addition, total installations decreased by 60% from 35 megawatts to 14 megawatts.

Why the big decrease? It’s my contention that the FPL rebate program is stifling the market. That’s right – a rebate intended to encourage solar energy installation had the opposite effect!

The interesting thing is that solar prices have never been lower, even without a rebate involved. The perception about solar needing rebates to be successful is an outdated notion. Getting this message out is on the shoulders of the solar industry, but our reliance on rebates over the years has misplaced our focus.

Let’s hope that we can make a better showing in 2012!

For those of you who don’t know, the largest utility in Southwest Florida, FPL, is giving away money – lots of money! If you ever had an interest in solar panels, NOW is the time to act. There is money available for solar electric systems and solar water heating systems, and combined with record low prices on solar panels, this is an amazing opportunity. The program is a huge success, but I want to talk about how FPL can improve the Solar Rebate Program, especially the rebate for solar electric panels.

FPL is offering $2 per watt of installed system rating with a residential limit of $20,000 (for a 10 kilowatt system). Smaller systems qualify for the same $2 per watt rebate amount. Most homeowners install around 5kW and receive a $10,000 rebate. How can this be improved? REDUCE the rebate amount!

What?! Huh?! No – don’t say that!!! You’re in the solar business!

Stay with me here as I explain. The first round of rebate funding ran out in under 15 minutes. That’s how much demand there was. That’s how unbelievable this deal is. That’s great, but there are some serious downsides to the program as it stands:

• Only 310 lucky people received a rebate reservation in the first round of funding.
• The first-come first-served system isn’t really fair – it benefits mainly people who can type their application fast on the FPL website. With this level of demand, a lottery would be a more fair distribution of funds. (Note: a lottery could have negative consequences for solar dealers who would not be able to predict future business.)
• Solar contractors must race to get all of their sold systems installed in a 90 day window to have the rebate paid, then there is almost no work for the next 9 months. Who is going to buy solar without a rebate if they know one is right around the corner. This makes it very difficult for qualified solar installers to stay in business and employee people year-round.

If the rebate program can “sell out” in under 15 minutes to 310 customers, how long would it take to sell out at $1 per watt? 50 cents? 25 cents? How many more people would install systems?

If FPL’s goal is truly to get more installed solar capacity in Florida, they would get the best bang for their buck by reducing the rebate amount to maximize the amount of solar electricity installed! Under the current scenario, FPL actually reduces the amount of solar energy installed in Florida, and essentially controls the market. They can predict quite well how much solar will be installed in a given year, and maybe that is their intention. The math is quite simple – if they devote half of the $15.5M annual program budget to photovoltaics, somewhere around 3.75 megawatts per year would be installed and interconnected to the utility.

Imagine the impact if the rebate amount were reduced. I’m willing to bet that if the rebate amount were cut to 50 cents per watt, 1/4 of the current amount, that four times the number of systems would be installed, especially if the installation window were increased to 9-12 months. This would help bring much more solar power to the utility’s system, and would keep solar dealers humming along installing systems year-round, employing more people and creating a greener future for everyone in Florida.

What is FPL’s motivation? What constraints exist from the Public Service Commission approved program? I don’t know all of the answers, but I’d sure like to hear from FPL about my proposal!

I recently set up a Wattvision meter on my Fort Myers, FL home to evaluate its effectiveness. I have to say, I love it! It definitely clues you in to how much energy you are using, when you are using it, and what appliances cost to operate. The device pays for itself by identifying power hogs. For example, I cut down the time my pool lights come on each night because they were consuming 600 watts! On the other hand, I decided to run my fountain longer each day because it uses next to no energy.

The charts on the Wattvision website are excellent. You can view real time, hourly, daily, and monthly data, and can download raw data to use in spreadsheets for further analysis. Take a look at this chart from last Monday.

What can you learn from the chart? Here is my analysis of what happened on Monday (list numbers correspond to numbers on the chart):

1. The baseline load for my home is around 400W at night when we are sleeping. This energy goes to digital video recorders, chargers, TVs, coffee maker, and other appliances that draw a small amount of energy constantly, plus some outdoor landscape and security lighting. The little bumps show the times when the refrigerator is running.
2. The water heater starts up about 4-5 times a day just to keep the water in the tank hot. Around 6:00 am we got up, took showers, and got ready for work. We used a substantial amount of hot water, and the water heater ran for a long period of time, costing us about 50 cents per hour of operation. Around dinner time the water heater worked during cooking and dish washing, and came back on as we got ready for bed.
3. My variable speed pool pump is scheduled to run at low speed from 9:00 am to noon, and again from 2:30 pm to 5:30 pm.
4. The pool pump ramps up speed from noon to 2:30 pm to give the automatic cleaner time to work and get adequate pool filtration.
5. The baseline during the evening increases as we use lights, watch TV, and use computers. The fountain and outdoor lighting also comes on at dusk.

My New FPL Smart Meter

FPL is in full swing installing Smart Meters around Southwest Florida.I had mine installed last week, but the communications network is a work in progress, so there’s no benefit to me yet. Despite all of the complaints and fears about Smart Meters, I believe the benefits will be great, allowing a granular look at your energy consumption down to your hourly usage, all available from FPL’s website. It’s not as good as some of the energy monitors on the market that can give you a per-second look at your consumption, or even monitor individual appliances or circuits, but it will provide significant insight into your electricity usage.

Some claim that the meters are bad for our health, are inaccurate, or disorient bees. Seriously!

I’m not going to make a call whether some of the claims out there are accurate, but I can tell you one thing for certain – understanding your energy consumption by learning when you use energy is key to reducing your utility bills. As my father-in-law says, “just like a business, you can’t manage energy without an accounting system.”

Unfortunately, those with solar electric systems that are under a netmetering agreement will not get the new smart meters. It is unclear whether the meters are bi-directional, or whether FPL or the manufacturer just hasn’t tested the accuracy measuring energy fed back to the grid. I’m trying to get clarification on that matter from FPL and will let you know if I hear back from their netmetering department.

Here’s a video from FPL about the new Smart Meters:

I’m at the ribbon cutting ceremony for the Broadway Apartments affordable housing project where we have 40 solar water heating systems installed. This is the largest polymer solar collector water heating project in Florida!

Solar water heating will reduce the electric bills for residents of the two-building multi-tenant property.

The goal of the project is to provide affordable housing that features low utility bills in a LEED Platinum facility. The solar water heating systems were one part of the LEED criteria that allowed the Broadway Apartments to achieve Platinum status.

The Southwest Florida Affordable Housing Choice Foundation reports that previous residents are already asking for applications to rent units. The property is deed restricted so rents will remain low for the long-term. The community is actively seeking residents for annual leases available now.

Congratulations to The Foundation, Chris-Tel Construction, and all of the project partners!

UPDATE: Here is the Fort Myers News-Press story on the event: http://www.news-press.com/article/20120120/GREEN/301200046/Low-income-housing-in-Fort-Myers-adds-green-efficiency

I guess I’ll weigh in on the highly publicized FPL rate increase request that would add about $7 to each residential account’s monthly bill starting in 2013.

FPL representatives say that the increase will pay for increased costs of doing business and a new “efficient” natural gas fired plant. The increase amounts to $695 million per year. Expected savings from the new plant – $600 million over it’s LIFETIME!

Does something seem very wrong here?

The problem with a public utility is that they are entitled to make a net profit, but that guaranteed profit is a percentage of costs. Costs increase, profits increase. There is no incentive to keep costs in check when you can go back to your customers and get a government mandated bailout from them!

Unfortunately, this is not a rate hike, so there is nothing you can do to avoid it by reducing usage or producing your own power. They want this amount added to the monthly customer charge, which is a base cost before you even start using power from the utility. This directly impacts solar energy sellers (netmetering customers), as they would likely be forced to pay this additional cost even if they consume no net power from FPL. On the other hand, that could just create more of an incentive to reduce the usage part of your bill with solar energy.

Don’t panic! It’s not here yet!

Time-of-use metering allows a utility company to charge you different rates based on the time of day. This billing approach is popular in places like California and the Northeast US where there are large peaks in electricity demand. Utilities deliver power by producing a “baseline” amount of power that corresponds with the lowest amount of total expected power demand for their customers at the lowest possible cost. It costs more to meet power needs that are above this baseline amount of power because production costs are higher to meet the peaks. Total demand changes based on the time of day and the time of year.

One way to think about it is how you drive your car. If you are cruising along at a constant speed, your fuel consumption is steady, predictable, and relatively low. When you accelerate and put the pedal to the metal, it costs a lot in terms of fuel consumption, and it’s a very inefficient way to consume fuel to get where you want to go. The same concept applies to utility companies’ power production. A utility’s dream is to be on cruise control, delivering a constant amount of power throughout the day and night.

LCEC's Southwest Florida Annual Load Demand Curve. January 2009 was particularly cold, causing a huge demand for electric heating.

Current electricity rates for PG&E customers in California with time-of-use metering can vary from 9 cents per kilowatt hour to over 47 cents per kilowatt hour! Depending on how much energy you use each day and when you use it, you could pay over 4 times the rate we pay in Southwest Florida!

Florida does have a relatively steady annual power demand because the population swells in the cool season. Even though less air conditioning is required per capita in the cool season, the sheer number of people here helps to level out the total amount of energy consumed each month. See the LCEC Annual Load Demand Curve to the right to illustrate this phenomenon. Nonetheless, demand throughout the day does vary significantly year-round.

The scary thing about time-of-use metering in Florida is that rates would be highest during the day in the summer when air conditioning is typically used. Electricity bills could skyrocket in Southwest Florida for annual residents and businesses unless habits are drastically changed. Commercial customers would be hit hard, as offices and shops consume the vast majority of their energy during peak hours. Retirees who are home during the day would also be hit with higher air conditioning costs. Lower income seniors may need to forego the luxury and comfort of temperature controlled surroundings.

The good news is that utility rates for off-peak times may actually be reduced dramatically. The other way for electric utilities to lower total cost of production is to actually raise the baseline. That means they want you to consume electricity during the off-peak times. One potential boon for this approach is electric cars. Imagine millions of electric cars charging up in garages overnight across Southwest Florida, flattening out the power demand curve!

Is time-of-use metering coming to Southwest Florida? Based on the status quo, we will probably not see time-of-use metering as a requirement in the near future. However, it is almost inevitable that some changes will be made to electricity rates in the mid- to long-run. It is totally impractical for utility companies to maintain a low baseline power production and meet peak demand with more expensive production options.

How does this relate to solar energy? Well, solar energy systems produce the most energy when the sun is out (surprise!) and this time generally corresponds to the peak power demand times for utility companies in Florida. If your solar energy system is reducing your usage during peak times, your bill will be reduced dramatically. You would be cutting down your usage of the most expensive power required for your home. Furthermore, any electricity that you sell back to the utility (power produced in excess of power concurrently used), would be sold back to the utility at premium rates!

Time-of-use metering is generally hated by the average consumer, but it is a more fair way to charge for electricity because it is tied to the cost to produce the power at the time it is consumed. If (when) time-of-use metering does come to Southwest Florida, one way to be prepared is to use a solar electric system to eliminate the most expensive power you will need.

You may have heard about the wonderful Florida Power & Light (FPL) utility solar rebate program that provides $1,000 for solar water heating systems and up to $20,000 for solar electric systems. This program can significantly reduce the total cost of ownership for a solar energy system. However, leased systems do not qualify.

Solar leasing has become popular, particularly in other states where Federal, state and utility incentives can be directed to the leasing company. Solar leasing typically benefits the leasing company more than the homeowner, but it can be a way for just about anyone with good credit to get into solar energy without any upfront costs. The rewards are much lower, but the savings line up better with the costs of having the system.

With the FPL rebate, the only incentive available to residential solar lease customers is the 30% Federal tax credit. I am recommending that you stay away from solar leasing if you live in FPL’s service territory. Don’t give up the rebate – it’s like free money!

If you don’t want to commit to the upfront cost of a solar energy system, there are options. Possibly the best option is tapping a home equity line of credit or getting a home equity loan for low cost financing of the upfront cost. You can pay down the loan once your rebate and tax credit come in, leaving just the principal on the remaining about to finance. Typically the remaining principal will be just 30-50% of the upfront cost. For example, if you invest in a $4,000 solar water heating system, the tax and utility savings would return 55% of the initial cost, leaving you with a loan of only $1,800! Solar has never been so affordable!

Another option is financing through a third party. Solar dealers have financing arrangements through financial institutions that provide a variety of same-as-cash and consumer loan options. While you will be giving up a portion of your solar energy savings to the lending institution, you will have no upfront costs and you will start saving some money immediately. Once the system is paid off, you get 100% of the savings and you own the system.

Of course, if you have a pile of cash under the mattress or sitting in a low interest bank account, or even in the volatile stock market, paying for your system in cash will provide a reliable long-term return that has one of the best risk-reward ratios possible!

The FPL rebate is an amazing once-in-a-lifetime opportunity for people who want to get into solar at a lower total cost of ownership. Unfortunately, solar lessees need not apply, as the program does not allow solar leasing. The good news is that there are financing options other than leasing, and the you can apply for the FPL solar rebate whether financing or paying cash for your system. Ask me how!