GREEN TECH MEDIA | The largest planned community solar program in the country, created by utility Florida Power & Light, cleared a hurdle this month when the utility reached a settlement agreement with groups that had raised concerns about its structure.
Solar accessibility advocates and retail giant Walmart now stand behind the 1.5-gigawatt program, after initially expressing concerns about access for low-income customers, overall costs and the distribution of the program’s financial benefits.
The program, called SolarTogether, still requires final approval from state regulators, but Florida Power & Light told Greentech Media it is planning to launch the program in the first quarter of 2020.
Among community solar programs as they’ve been defined, FP&L’s design is a bit novel. Under the current structure, 75 percent of the program’s capacity will go to commercial and industrial or governmental customers, with the remaining 372.5 megawatts left for residential and small businesses. FP&L also designed an escalating bill credit, meaning it will take several years for the subscription benefits to outweigh the cost of subscribing to the program. SolarTogether is another big step on Florida’s path to becoming a national leader in solar energy.
“It really does put Florida on a trajectory to be a national leader that we have felt for a long time has been needed, given, you know, [that it’s] the Sunshine State,” said Stephen Smith, executive director at the Southern Alliance for Clean Energy. “Florida needs to diversify its energy mix.”
The “backbone” of FP&L’s solar ambitions
Smith calls SolarTogether “the backbone” of FP&L’s efforts to drastically increase solar deployment. The utility, owned by NextEra Energy, in January set out a goal to install 30 million solar panels by 2030, which equates to about 10 gigawatts. Wood Mackenzie Power & Renewables ranked FP&L behind only First Solar in terms of annual capacity additions in 2019.
The community solar program itself would spur 20 new power plants at 74.5 megawatts each. Customers can subscribe in 1-kilowatt increments, topping out at 100 percent of their kilowatt-per-hour load over the last 12 months. Each month customers pay a subscription charge of $6.76 per kilowatt and receive a credit that starts at 3.4 cents per kilowatt-hour and escalates over a 30-year term.
Participants in the program can adjust their subscription, move it to a new household within FP&L territory, or cancel it without a fee.
After lobbying from advocacy groups like Vote Solar, FP&L also set aside 37.5 megawatts for low-income customers, which it defines as those at or below 200 percent of the federal poverty level (currently $51,500 for a household of four).
States including New Jersey, Colorado and California have included low-income access within community solar programs, with varying degrees of success. Katie Ottenweller, Vote Solar’s Southeast director, said the program’s focus on ensuring wider access in Florida was essential to winning the organization’s support.
“In terms of the philosophy behind community solar, this policy really should be about giving customers access who do not have it right now,” Ottenweller said. “It can’t just be about large customer access. It also has to be about figuring out creative ways to structure these programs so you can address the energy burden issues.”
Though general subscribers must wait seven years for their credit levels to pencil out to net economic benefit, the credit available to low-income subscribers outweighs the monthly subscription charge from the start.
FP&L’s program is also designed to benefit non-subscribers. The utility expects the build-out of solar to generate $249 million in net cost savings. Though some of that money will go to subscriber credits, some will be doled out to all customers. It’s another aspect of the program that advocates approve of.
“Because these solar assets are so valuable and the price to develop solar has come down, there’s this question of [whether] we should be allocating these resources to particular subscribing customers or just…putting these into the rate base,” said Ottenweller. “From our perspective, that’s not an either/or — it’s a both/and.”
Still too complicated?
According to Ottenweller, the settlement represents a “real compromise.” But after managing that conflict, FP&L still has challenges ahead. Beyond securing official approval from the Florida Public Service Commission, the utility has to make sure it can meet the program’s impressive size with equivalent demand.
If residential subscribers sign up for 100 percent of their average annual usage, the utility estimates it can serve about 74,500 customers with the 372.5 megawatts of residential and small business capacity included in the program. FP&L has a deep well to draw from with its own customers, and spokesperson Stephen Heiman told GTM that 100,000 residential and small business customers have already signed up to receive program updates.
But analysts suggest the program’s complicated credit mechanism — a pernicious problem for community solar at large — could hamper its uptake. The utility calculates bill credits by multiplying solar production, a participant’s subscription level and the “Benefit Rate,” a number FP&L quantifies using solar system savings and other metrics.
That calculation makes the program “kind of messy,” according to Austin Perea, a senior solar analyst at Wood Mackenzie Power & Renewables.
“Community solar markets with simple 1-1 retail-rate offsets are still having difficulty reaching scale because community solar, even when simply designed, is complicated,” said Perea. “Throw a wonky subscription credit into a program and that convolutes savings, which is then difficult to communicate to the customer, and it makes customer acquisition and retention that much more difficult.”
Smith at the Southern Alliance for Clean Energy said the group is “cautiously optimistic” that customers will respond positively to the program.
“There’s an appetite for it,” he said. “This has a lot of potential, but companies have to market it, they have to stand behind it, they have to make sure their customers have a good understanding of it and a good experience with it. And they’ve got to put the solar systems out there and let people be aware of them.”
FP&L’s community solar program will need to blaze a trail in the state. Florida hasn’t passed legislation allowing a competitive community solar market — though one such measure was introduced and stalled out in 2019 — and in general is relatively closed to third-party developers because utilities largely develop projects on their own. Other utilities in the state have more modest shared solar programs, like Tampa Electric Company’s 17.5-megawatt program unveiled in June.
“It’s fantastic that FP&L recognizes their customers are demanding solar,” said Hannah Muller, director of public policy at Clearway Energy Group, a developer of community and distributed solar.
“It would be really exciting to see Florida open up the opportunity for private companies to compete and innovate to see what kind of community solar offerings they could tailor to different market segments in Florida,” she added. “You might find that some of those are even more compelling than what FP&L has put forward.”