Florida is known as the Sunshine State because of its mild climate and sunny weather. In fact, Florida has an average of 237 sunny days per year, making it a great state to harness the sun’s energy with solar panels. Florida also offers solar incentives that make switching to renewable energy more affordable than ever before. With its ideal climate and abundance of Florida solar incentives, the Sunshine State has become one of the leading states for renewable solar energy.
Currently, Florida is ranked No. 3 in the U.S. for solar energy capacity, with more than 100,000 residential solar system installations in the state. Its rise to become one of the top states for solar energy is largely due to the tax exemptions, low-interest financing options, and other incentives available to Florida homeowners.
If you’re considering switching to renewable solar energy in Florida, it’s essential to understand all the financial incentives available. In this article, we’ll describe each incentive so that you can get the most value out of your new photovoltaic (PV) system.
Florida Net Metering
Net metering is one of the most attractive solar energy policies and an excellent way for homeowners to start saving money with solar. Net metering programs allow homeowners to reduce or eliminate their electricity bills while shortening the payback period of their solar systems.
Once a solar system is installed, it often produces more electricity than the homeowner can utilize. By participating in a net metering program, homeowners can send the excess energy back to the power grid in exchange for utility credits. The credits can then be applied to the homeowner’s electricity bill. This policy not only benefits the homeowner but also takes pressure off the grid to produce enough power for the region in which it operates.
Unlike many states, Florida offers full-retail net metering. This means that residents will be credited for excess electricity at the current retail rate. This is a great incentive to go solar; however, it won’t be available forever.
According to HB-741, Florida residents who install solar panels by January 2024 will be grandfathered into this policy and can send excess energy back to the grid at full retail rates for the next 20 years. So, if you’d like to maximize your savings with solar, now is the best time to do so.
Property Tax Exemption
When a solar system is installed in a home, the property value typically increases. According to Zillow, homes with solar panels sell for 4.1 percent more on average than those without solar-energy systems.
Typically, an increase in home value leads to a rise in property taxes; however, residents of Florida that install a solar system receive a 100% property tax exemption for residential property and an 80% property tax abatement for non-residential installations. This incentive also applies to solar battery storage devices. As a result, while the home’s value may increase, it will not lead to additional property taxes under Florida law.
The exemption applies to assessments starting on January 1, 2014, and for equipment installed on or after January 1, 2013. The non-residential abatement applies to installation made on or after January 1, 2018 and will expire on December 31, 2037.
Sales Tax Exemption
The Solar and CHP Sales Tax Exemption is another of the best Florida solar incentives available to homeowners. Since 1997, all solar products have been exempted from the state’s sales and use tax.
This means that when you install a solar system in Florida, you will not have to pay the state’s six percent sales tax. That translates to a six percent reduction in the total cost of the solar PV system.
Florida Solar Rights Act
Florida’s policies are supportive of the solar energy industry and help to protect the rights of all solar consumers in the state. With the Florida Solar Rights Act (Florida statute 163.04), homeowner associations and other groups are prohibited from preventing the installation of solar panels on buildings within the state.
While an HOA can impose certain restrictions, those restrictions must be reasonable, not arbitrary, and uniformly imposed. So, while an HOA may dictate where the solar panels are installed on the roof, it cannot prevent a homeowner from installing them.
Although HOA cannot prevent the installation of solar systems, it is still important to seek approval from the association before installing solar panels. While statute 163.04 helps to protect the rights of solar consumers, it does not waive the need for HOA approval. Fortunately, an experienced Florida solar contractor can work with the association to gain approval.
Property Assessed Clean Energy Loans
Installing a rooftop solar system could cost thousands of dollars, which is not an amount most homeowners can produce upfront. Once again, the state comes to the rescue with Property Assessed Clean Energy (PACE) loans. These loans allow homeowners to finance the solar system installations without requiring any down payment.
When you use a PACE loan, it is repaid via the property tax bill and is tied to the home instead of to you. It can be a useful financing option if you plan to stay in your current home for an extended period.
Numerous other financing options are also available to Florida homeowners, many of which come with no down payments and no payments for 60 days after installation. At Lake Mary Solar, our team can help you select a financing option that suits your budget and maximizes your savings.
Local Utility Rebates
Some municipal utilities and electric cooperatives provide solar rebate programs to Florida homeowners. These rebates can greatly reduce the total cost of installing a solar system. To learn more about these rebate programs and other Florida solar incentives, visit the Database of State Incentives for Renewables & Efficiency.
Federal Tax Credit
The federal solar tax credit, also known as the investment tax credit (ITC), is a solar incentive offered to all residents of the United States. Through the program, eligible homeowners receive a 30 percent federal income tax deduction on the total cost of a solar system installation.
The ITC applies to residential and commercial solar installations, and there is no cap on its value. On average, solar consumers can expect to save nearly $9,000 when the incentive is applied.
As long as you are the owner of a solar system, you can claim the ITC. Even when you do not have enough tax liability to claim the whole credit in one year, you can roll it over to future years for as long as it is in effect. However, if you sign a lease or power purchase agreement, you do not own the system. This program has no income limits, meaning homeowners in any income bracket can apply for it.
This incentive was established through the Energy Policy Act of 2005 and would have expired in 2007. However, its popularity around the country in supporting the transition to renewable energy saw it extended numerous times. Currently, it is set at 30 percent but will be lowered to 26 percent in 2033. This means that if you want to maximize your savings, now is the best time to install a solar system.
Florida Solar Incentives: Final Thoughts
There is an abundance of Florida solar incentives that can be used to reduce the cost of a solar panel system; however, many of these incentives won’t last forever. If you’d like to get the most value out of your residential solar system, now is the time to get started.
At Lake Mary Solar, we aim to help Florida residents reduce their carbon footprint, become energy independent, and save money with renewable solar energy. Our experienced, licensed, and insured Florida solar contractors can help you leverage solar incentives to maximize your savings.
If you’re ready to join the solar energy revolution, get a customized quote today.Get a Quote