Landowners With Solar Power Barely Avoided an Eclipse of Their Benefits

Gov. Ron DeSantis saved landowners who generate solar power from losing a key financial benefit when he vetoed a bill passed by healthy majorities in both houses of the Florida Legislature.

The governor in April rejected House Bill 741, which would have evaporated significant value from pending investments in solar power. It also would have forced landowners with solar panel arrays on empty land or panels on rooftops to recalculate the value of those investments and consider other renewable alternatives.

Background

Solar power users in Florida enjoy two benefits.

1. When it’s sunny, they pay little or no money to their local power company for electricity.
2. Sometimes solar panels generate more electricity than the landowner needs, and that energy is transferred to other properties on the local power company’s grid. Since 2008, Florida law has required local power companies to credit the solar users’ next monthly bill for the excess energy they generated at a particular rate.

The second benefit, called “net metering,” was at stake with HB 741.

The Policy Debate

Power companies have argued that they were paying so much to solar power users for the excess energy that their customers using traditional power generation were “subsidizing” solar power. The power companies also asserted that solar power users weren’t contributing to the infrastructure needed to maintain and improve the grid, which by law must be able to provide electricity to any customer at any time of the day or night.

Solar power companies argued that reducing the net metering benefit for solar power users would cripple an important industry for the state, while environmental groups opposed reducing any incentive for people to use solar power.

The bill passed 83-31 in the House of Representatives and 24-15 in the Senate.

The Bill and the Veto

The bill would have reduced the value of net metering significantly, starting in 2024. Credits would fall in value by 25% through 2025, by 40% in 2026 and by 50% from 2027 through 2028. In 2029, the credit would fall to 0.

The bill stated that any net metering arrangement that started before 2029 would have been effective for 20 years from the time their net metering program began.

On April 27, DeSantis announced he was vetoing the bill, stating the amount of money recovered by the power companies was “speculative,” adding that he was reluctant to raise Floridians’ energy prices during the worst inflation the country had seen in 40 years.

It’s Not Over

Residents of Florida who benefit from net metering of their solar power panels can breathe a sigh of relief, for now. But as the Palm Beach Post reported, “If history is any indication, it’s unlikely that the fight over net metering is over. Utilities backed the failed constitutional amendment in 2016 that, in part, aimed to codify that “‘consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do.'”

The newspaper quoted a solar power advocate who said he expects the power companies to push for net metering reductions or removal again.

Since some of our clients are agricultural operations, timber companies, real estate lenders and others that invest in land, we will monitor any new effort to limit or cut net metering – and how it could affect their future plans to take advantage of government incentives for renewable energy.

We have worked with clients on methane sequestration from cattle farming, property tax incentives for timber companies deferring cutting and carbon credit systems for manufacturers. If a bill similar to HB 741 were to become law, there may be a need to consider alternatives to solar power to invest in renewable energy and reap potential financial incentives.