Solar Southwest Florida

FPL Solar Rebate Demand High, Supply Low

FPL made an important and appreciated change to their solar rebate program for this round of funding. They said they would take applications after the funds were exhausted to put applicants on a standby list, as many customers do not go through with installations. I was surprised to see that the standby list was limited, and applications were eventually rejected.

That really does not make sense, unless FPL does not really want to know how many people want rebates but cannot get one. Wouldn’t it make sense to take all applications in the order received? That way we could gauge demand and adjust the rebate amount accordingly to maximize the installed capacity with the limited rebate funds! Why cut off accepting applications at all?!

While it looks like we were able to secure several rebates for Fafco Solar’s customers this time around, the system is still frustratingly broken. I am certain that so many more people would go solar if the rebate program was fixed and the rebate amount was more in line with demand for rebate funds.

Business PV funding was still available, with $715,000 still out there as of 9:00 am. I find that interesting, indicating that commercial PV installations aren’t seeing the same feverish demand for rebate funds. That’s strange because business customers are typically making decisions on an ROI basis, and the ROI for a business can be sensational with the rebate funds.

As expected, plenty of rebate money is still available for residential and commercial solar water heating, and funding will likely be available for months.

FPL will open up the next round of solar rebate applications on October 16, 2012 at 8:30 am. Rebate applicants will need a licensed solar contractor to install their system, and are advised to contact Fafco Solar urgently to get an evaluation, conditional contract, and in the queue for a rebate application submission.

The total funding for this round of rebates is $9 million.

FPL took one of FlaSEIA’s recommendations and is allowing applications to go through once the available funds are exhausted. If successful applicants do not pursue an installation, the next applicant will be offered a rebate approval. That’s a step in the right direction for the beleaguered rebate program.

As if FPL’s solar rebate program didn’t run out of funds fast enough the last time around, Tampa Electric’s Solar Photovoltaic allotment of rebates evaporated in one minute – less time than FPL applicants found themselves having to secure a lucrative rebate. TECO’s solar rebate program, which released funds this morning at 10 am, was expected to run out of funds on the first day like the FPL program, but this is a record time for rebates to be snatched up.

This is NOT a “first-come, first served” application process like the utility companies would have you believe. It is basically a lottery, but a lottery that can legally be rigged by companies who have figured out the technology required to get a leg up when the rebate application system goes live.

The process is senseless. The utilities are hoodwinking the public. The real goal is not to “help utility customers get into solar energy.” If it were, the rebate amounts would be sensible, and the programs would benefit a broader customer base than the lucky few who get a windfall rebate approval.

The next round of funding is coming for FPL customers in Southwest Florida. If you live in Naples, Fort Myers, Bonita Springs, or any of FPL’s SWFL service area, I highly advise that you contact your solar dealer urgently and try your hand at getting a solar rebate. The rebate could pay for half of your system, and the Federal Tax Credit can cover a big chunk of what’s left. You need to act NOW!

P.S. Fafco Solar is a good choice for a licensed local solar dealer!    (239) 574-1500.

License: CVC56701

After an already depressed market in the first quarter of 2012, Florida’s solar electric installations fell to 18th among states in the second quarter of 2012 according to the Solar Energy Industries Association’s quarterly report. After rising to 14th among states in Q1 of this year, Florida regressed below it’s 2011 ranking of 17th among states. This follows a large spike in national solar electric installations with Florida installations remaining stagnant.

SEIA Report On Solar Installations Q2 2012

To blame, in my opinion, is:

• Continued disruption caused by the FPL rebate program
• The lack of a cohesive policy in the state regarding renewable energy
• Lack of availability of financing and reasonable long-term financing rates for solar energy home improvements
• An incorrect public perception that solar energy is only viable with generous rebates (said another way: the industry does a poor job of marketing)

Fortunately, Florida still has a thriving solar pool heating industry, which is not covered in the rankings. Solar thermal, including solar pool heat and solar domestic water heating, is an important contributor to Florida’s solar industry. Solar Photovoltaics (PV or soalr electric) are mainly addressed in the report. While to report is not encouraging, historically low prices are leading to increased installation of solar electric systems without incentives, but Florida is falling further behind other states with more progressive incentives and policies.

The Florida Solar Energy Industries Association (FlaSEIA) is voicing the solar industry’s dissatisfaction with the FPL Solar Rebate program. While touted as successful by Florida’s largest utility and a spectacular windfall for a few lucky rebate recipients, the solar rebate program has been disastrous for Florida utility ratepayers, solar energy contractors, and solar suppliers.

FPL and FlaSEIA are at odds over the FPL Solar Rebate Program

Solar Southwest Florida is in receipt of a series of letters between FlaSEIA’s former President, Bill Gallagher, and Florida Power & Light’s Manager of New Product Development, Oscar Gans. The letters detail results from the latest distribution of 2012 rebate funds, FlaSEIA’s position on the rebate program, and FPL’s response. There is some very important and disturbing information contained in the letters, and based on FPL’s response I am not confident that they share the same sense of urgency about the problems with the program.

There are really three overriding factors in this debate over the program in my opinion:

• The flawed reservation system and procedures that creates an unfair playing field for solar contractors and rebate applicants.
• The rebate amount is seriously out of balance with demand for those funds.
• The program does not accomplish the stated goal, which is to increase the number of photovoltaic energy systems installed in the state.

The Reservation System

Case in point for the flawed reservation system is that one contractor was able to secure 27 of the 119 approved rebate applications (23%). The top three contractors accounted for 50% of the approved applications, and the top five hoarded nearly two-thirds. The top four solar contractors for commercial systems garnered 71% of the business, with only seven other contractors securing one or two approvals. Only 26 contractors (out of hundreds of solar and electrical contractors licensed to do installations) were able to secure any rebate approvals.

The reservation system is an online application process that requires the FPL customer to log into their account and enter system details to an online form. In reality, contractors are asking account holders for their account information so they can have employees fill in the technical data required. The application forms go live at 8:30 am on the application date, and then it’s a race to see who can type fastest.

In the last round of funding, the funds were exhausted in under two minutes and further applications were rejected!

How did some contractors fare so much better than others? It is quite apparent that some have figured out how to use form-filling software to quickly enter rebate applications. While that is not cheating, illegal, or immoral in any way, it puts others at a severe disadvantage and give individuals virtually no chance of success in securing their own rebate approval.

Full disclosure to dispel any thoughts that this is just sour grapes: My employer had 11 people frantically entering rebate applications, and we had two people type fast enough to secure approvals, one of which went through with purchasing a system.

There are other problems with the reservation system, like not continuing to take applications after funds are exhausted so that unused funds can go to the next applicant in the queue. Another problem is not requiring that the applicant have serious intentions of actually going forward with an installation. The main problem at this point is the skewed distribution of the funds – the fairness factor. A lottery process has been suggested by others, but that isn’t a process through which industry members can build reliable and predictable sales (read: jobs).

Supply and Demand

Why did the rebate funds run out in under two minutes? Because the rebate amount at $2 per watt is insanely generous in today’s photovoltaic market. It’s no secret that the price of photovoltaic modules themselves is now under $1 per watt. The total installed price being offered by retailers in Florida is well under $6 per watt, and can be under $4 per watt in many circumstances. The combination of a 30% tax credit and the utility rebate exceeding 70% of the remaining cost in many cases makes the return on investment look like stealing power from your neighbor. There is no reasonable financial argument against installing a solar electric system if you are able to secure a rebate for your home or business.

Unfortunately, the rebate funds are limited, so the number of applications approved (119 in the last round) falls grossly short of the demand.

To put things into further perspective, the State of Florida ran a wildly successful $2 per watt rebate program a few years ago when systems were selling at $8-$10 per watt retail price. Because of the plummeting cost of photovoltaic panels and components over the last few years, it is now cheaper to buy a system without rebates than it was a few years ago with rebates. Even at “those prices” a $2 per watt rebate amount was so successful that the State ran out of funds and ultimately paid many people just 52 cents on the dollar. On a good note, the FPL program guarantees that approved applications will be paid as long as the program standards are met.

The bottom line is that the rebate amount is far too generous. People are reluctant to install a system without rebates when their neighbor received a $20,000 handout from the utility. They are far more likely to roll the dice in the next round of funding and hope for a windfall.

Other states and utilities offer far less generous rebate programs and are seeing huge levels of solar energy adoption. For example, Arizona utilities offer rebates in the range of 20 to 50 cents per watt. The programs are wildly successful and at least one utility has exhausted funding for this year.

You will see in the letters that FPL spent $3 million advertising the solar rebate program. It clearly did not need to be advertised. This amount put toward actually installing solar energy systems would have resulted in 1.5 megawatts of additional capacity for ratepayers, and far more if the rebate amount was in line with demand.

The Goal

The stated goal of the FPL Solar Rebate Program is to increase the adoption of distributed solar energy installation in the state of Florida. This rebate program is effectively capping the installed capacity in FPL’s service area, having the exact opposite effect! If $4.5 million is actually reaching ratepayers as noted in FlaSEIA’s letter, then simple math indicates that 2.25 megawatts of capacity will be installed. As stated above, and proven by ample anecdotal evidence, other ratepayers are not going to proceed without a rebate if they know a rebate program is in place.

To put this in perspective, the state of New Jersey saw 173.8 megawatts of capacity installed in the first quarter of 2012 alone.

Statistically, Florida fell to 17th among states in 2011 for total installed solar electric capacity, down from 8th place, right at the time that FPL’s rebate program came into existence. In the first quarter of 2012, the total capacity installed in Florida was a paltry 2.8 megawatts. This was 14th among states, and only 1.8% of the amount of solar capacity installed in the top ranked state, New Jersey.

FlaSEIA recommends that the rebate amount be reduced to 50 cents per watt, which would result in a four-fold increase in the capacity installed. I believe a more aggressive reduction is in order – 25 cents per watt. I truly believe that and eight-fold increase in installed capacity is possible with today’s current retail price of solar photovoltaic systems and a 25 cent per watt rebate. Furthermore, a small rebate amount will not dissuade ratepayers who are not lucky enough to obtain an approved rebate application.

Conclusion

The FPL Solar Rebate Program is clearly flawed. FlaSEIA, with its limited funding and power, is admirably taking the industry’s complaints to FPL and the Public Service Commission. Moreover, this is a battle for the Florida electricity ratepayer who is willing and able to install a solar photovoltaic system, but is stymied by the process and conflicted over whether to proceed without a rebate handout. The fact of the matter is that Floridians were installing solar energy systems in larger quantities while systems were sold at higher net costs before the rebate program came into existence.

Am I asking for the rebate program to go away? Certainly not. I do believe utility rebates encourage the adoption of solar energy. Unfortunately, because of the way this program is being administered, and the supply and demand being so far out of whack, FPL’s implementation is having disastrous results on the industry (jobs), and is having the direct opposite effect as the stated goal.

The series of letters can be viewed here:

FPL Letter May 29, 2012

FlaSEIA Letter July 30, 2012

FPL Letter August 14, 2012

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.

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!

A couple of years ago we had a thriving Florida state incentive program that paid $4 per watt to buyers of solar electric systems in the form of a rebate. At the time, that covered between 40% and 50% of the cost to install solar electric for your home or business. Two things happened with the rebate program: the incentive was shut down due to lack of funding/desire by legislators to spend taxpayer money, and the existing rebate applicants were hung out to dry, many collecting only 52 cents on the dollar. That was the end of state rebates for Florida property owners.

So why should you buy solar electric now in Florida without a state rebate?

Fast forward two years to the beginning of 2012. The bottom dropped out of the Photovoltaic panel market, with wholesale prices dropping by over 75%. This resulted in almost a $4 per watt decrease in wholesale price for a big part of the cost to install solar electric. Other fixed and variable costs remained the same or decreased slightly. Today, solar electric systems are sold for almost $4 less at the retail level.

In short, if you were lucky enough to get the state rebate, you would have paid about the same two years ago with a state rebate as you will pay today without a state rebate. If you had purchased two years ago and not received all of your rebate money like thousands of Floridians, you would be better off buying today to the tune of $2 per watt. That’s about $10,000 on a typical household system!

The point is that now there is no risk of failed rebate programs and legislative nonsense. Prices today are lower at regular retail rates, and you are no worse off than someone who purchased a couple of years ago with a promise of a fat rebate from the State of Florida that never came through.

So the next time someone asks me, “what incentives are available,” I can respond that they are no longer necessary to make solar energy economically viable!