Florida Solar

ESD Solar looked into the best solar incentives in Florida to see how you can save on solar installations. In Florida, solar panel systems are exempt from sales tax and property tax. You can also take advantage of the federal 30% solar tax credit alongside these exemptions.

Florida offers a statewide net metering program that pays solar homeowners for any excess solar energy they produce. Thanks to Florida’s sunny climate, solar panels often generate more energy here than in other parts of the country. This can result in significant excess energy production.

 

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Florida Solar

Florida State Solar Incentives

We conducted local market research to learn more about the incentives in Florida. By 2024, the state will offer the following:

Solar Sales Tax Exemption

  • Savings Estimated: 6% of the cost of solar energy systems
  • Frequency: One-time
  • How to Claim: Automatically applied at purchase

In 1997, Florida introduced a sales tax exemption for solar energy systems and combined heat-and-power (CHP) systems. Originally set to last five years, the exemption was made permanent by Florida. Solar incentives are now available for the following technologies:

  • Solar photovoltaic (PV) systems
  • Solar water heaters
  • Combined heat and power systems

Applying for this incentive is straightforward. You simply don’t pay the 6% state sales tax in Florida when you purchase a qualifying solar system. To qualify, your equipment must be certified by the Florida Solar Energy Center.

The table below will show you how much tax you can save when purchasing a solar system for your home. The calculations are based on the cost of solar systems of various sizes, measured in kilowatts.

System Size System Cost Savings on Sales Tax (6%)
5 kW $16,550 $993
6 kW $19,860 $1,192
7 kW $23,170 $1,390
8 kW $26,480 $1,589
9 kW $29,790 $1,787
10 kW $33,100 $1,986

Property Tax Reduction for Renewable Energy

  • Estimated Savings: Varies based on the property tax rate
  • Frequency: Annual tax savings
  • This benefit excludes the value of your solar system from property tax.

Home improvements can raise your home’s assessed value, which might increase your property taxes. However, Florida offers a Property Tax Abatement for Renewable Energy Property. This means that if you install solar panels, the increased value of your home won’t lead to higher property taxes.

Your property taxes will stay the same even if installing solar panels raises your home’s value. This incentive, introduced in 2013, will last until the end of 2037. Here’s how it works:

Imagine you own a $400,000 house in Florida, in a county with a 1% property tax rate. That’s $4,000 in property taxes each year. 

  • If you install solar panels and your home’s value increases to $430,000, your annual property tax will still be $4,000. 
  • Without this incentive, you would be taxed on an additional $300 of value.

Property Assessed Clean Energy (PACE) Financing 

  • Savings Estimate: Varies depending on your loan
  • Frequency: One-time
  • How to Claim: Online application

The Property Assessed Clean Energy program (PACE) is a financing option for solar panels and other home improvements. Unlike traditional loans repaid directly to the lender, PACE loans are paid through your property taxes. For more information about the PACE program, please see the following details:

  • Interest Rates: According to the Florida PACE Funding Agency, rates can vary from 6% to 12.99%.
  • Closing Fees: Typically 6.99%, with no deposit required.
  • Repayment: PACE loans can be repaid over 20 years. There are no charges for early repayment.

Solar experts generally recommend PACE financing only if you do not plan to sell your house during the loan term because the lender will place a lien against your home. The loan is tied to your property tax.

If you plan to sell your home, you will need to find a buyer willing to take on the PACE loan. Since there are no prepayment penalties, you can remove the lien by paying off the loan early.

Solar and Energy Loan Fund

  • Savings Estimated: Depends on your loan
  • Frequency: One-time
  • How to Claim: Online

The Solar and Energy Loan Fund (SELF) offers home improvement loans ranging from $3,000 to $25,000. Interest rates for these loans vary from 5% to 9.99%, and the repayment periods range from three to ten years. Your home upgrades can qualify if they involve:

  • Air conditioning
  • Health and Safety improvements
  • Lighting
  • Solar energy systems and photovoltaic panels
  • Roof repairs or replacements
  • Sewer and water systems
  • Storm resilience enhancements
  • Weatherization and insulation

The SELF program was initially launched in St. Lucie County in 2010, thanks to a $2.9 million grant from the U.S. Department of Energy. Due to its success, the program was later expanded to other parts of Florida.

Local Solar Incentives

As of 2024, Florida will not offer any additional incentive programs for specific cities or regions beyond the state-wide programs already mentioned. If you live in Orlando or Tampa, you will not be eligible for any extra incentives. Previously, the Jacksonville Electric Authority (JEA) offered a $4,000 rebate for battery storage systems, but this incentive has since been removed from their website. JEA still offers incentives in Jacksonville for energy efficiency and solar heating.

How to Claim Local Incentives

Solar programs frequently change, and new government incentives can be introduced at any time. Before installing a solar rooftop system in Florida, make sure to check if you qualify for any local incentives. Reliable sources for this information include the websites of your city or county government and local utility companies. You can also contact your solar installer, as they stay updated on all financial incentives.

Florida Net Metering Explained

Net Metering is a billing method for solar owners that allows you to send excess solar power back to the grid and receive billing credits for nighttime usage. Combined with the federal tax credit, net metering is a key incentive for homeowners investing in a solar system. Over time, net billing can save thousands of dollars for solar panel users.

In Florida, the four investor-owned utilities (IOUs) provide electricity to 75% of the population and are required to offer net metering to solar homeowners. These utilities include:

  • Duke Energy
  • Florida Power and Light
  • Florida Public Utilities
  • Tampa Electric Company

Net metering does not apply to smaller municipal utilities or electric cooperatives that serve the rest of Florida, although many of these smaller companies do offer net metering voluntarily.

The Florida Public Service Commission maintains a list of all electric utilities offering net metering. You can check their website to see if your area is covered.

If your solar panels produce more electricity than your home uses, you can sell the excess to your local electric company. This is beneficial if you’re away during the day and can’t use the solar power directly. Otherwise, the excess energy would go unused unless stored in a home battery, which can cost up to $12,000.

How Net Metering Works

  • According to the National Renewable Energy Laboratory (NREL) PDFWatts Calculator, a 6 kW solar home system in Miami can produce about 9,300 kilowatt-hours (kWh) per year.
  • If your annual daytime energy consumption is less than 5,000 kWh, Florida Power and Light would credit you for the 4,300 kWh you sent back to the grid.
  • This amount is then subtracted from your nighttime consumption when you can’t use solar panels and must rely on the grid, reducing your electricity bill.

How to Enroll in Net Metering

Solar owners who want to participate in the net metering program must meet certain eligibility requirements:

  • Florida solar panels must comply with the National Electrical Code of the National Fire Protection Agency.
  • You must use a UL-1741 certified solar inverter that can disconnect from the grid during a power failure or have a visible switch to disconnect.
  • Your local utility must install a bidirectional meter.
  • You need approval from a local inspector.

To participate in net metering, owners of solar PV systems must pay an application fee and provide proof of liability insurance. However, this requirement does not apply to solar systems under 10 kW, which includes most residential installations.

Florida Solar

Federal Solar Tax Credit

The federal tax credit, also known as the Investment Tax Credit (ITC), is available to all U.S. residents. You can claim a 30% credit on the installation costs of your solar system. This credit can be combined with other local incentives in Florida, such as sales tax exemptions and property tax exemptions.

The Solar Federal Tax Credit was reduced to 26% in 2020, but the Inflation Reduction Act restored it to 30% in 2022. This credit is available until 2034, after which it will be phased out according to the following schedule:

  • In 2033, the credit will drop to 26%.
  • In 2034, the credit will drop to 22%.
  • If Congress does not renew the credit, it will be completely phased out in 2035.

The credit can only be claimed once per tax year. For example, if you install a 5-kilowatt home solar system costing $13,000, the applicable ITC is $3,900. This amount can be deducted from your next federal tax return. If the tax credit you receive is greater than your taxes owed, you can apply the difference to future tax payments.

Estimated Solar Savings in Florida

If you install a 6 kW solar system in Florida on a property with good sunlight conditions, you could generate approximately 9,766 kWh of energy per year. In Florida, the average cost for a 6 kW solar home system is $19,860. 

However, after applying the federal 30% tax credit, the net cost drops to $13,902. It might take about 9.3 years to pay back your investment if you save $1,490 a year on energy. Although this may seem long, remember that quality solar panels often come with warranties lasting up to 25 years. 

By the time you recover your investment, your solar system will still have many years of life left, potentially saving you money for nearly 16 years.

Additionally, installing solar panels can increase the value of your home, which is exempt from property taxes in Florida. According to the National Renewable Energy Laboratory (NREL), the increase in property value after installing solar panels is equal to 20 times your annual energy savings. So, if you save $1,490 per year in energy costs, your home’s value could increase by almost $30,000.

Florida Solar Incentives FAQs

Are there any solar incentives in Florida?

In Florida, you can install solar panels without paying sales tax or property taxes. The state also offers net metering, which compensates you for any excess energy your solar panels generate and send back to the grid.

Is there a tax credit for solar energy in Florida?

Florida has no state income tax, so there are no local tax credits for solar energy. However, you can still claim the federal tax credit for solar energy, which equals 30% of your system costs.

Are solar panels free in Florida?

No programs in Florida offer free solar panels. However, there are financing options that allow you to install solar panels with no upfront cost, such as solar leases or loans. You can pay off a solar lease over time with the savings from your energy bills.

What are the advantages of solar power in Florida?

Solar panels allow Florida homeowners to make the most of the state’s abundant sunshine. A 6 kW solar home system can save you over $1,000 per year on electricity bills. Additionally, net metering gives you credits on your power bill for any excess solar energy your panels generate. Since Florida exempts solar panels from property taxes, you can increase the value of your home by going solar without raising your property taxes.

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