Lisa Pate, FRSA Executive Director
Florida is the Sunshine State and it’s not surprising that it’s ranked third for solar potential but only fourteenth in terms of rooftop solar installed. Solar installation is expected to double in the next five years and with an estimated $17.6 billion invested in 2022, does it make sense for roofing companies to consider offering solar options?
While the cost of solar has declined significantly over the last decade, it’s still a sizable investment for home and business owners looking to lower their electric bills. To encourage greater adoption of solar, the federal government, state and local governments and even some utilities offer incentives to install solar roofs to power homes with more affordable and accessible clean energy. These energy savings typically take the form of solar rebates, tax benefits or performance-based incentives and can reduce the cost for solar anywhere from 30 to 50 percent.
Florida’s solar policies have lagged behind other states: it has no renewable portfolio standard and does not allow power purchase agreements, two policies that have driven investments in solar in other states. However, thanks to utility investments in clean energy and other recent developments, significant growth is on the horizon.
Statewide, Florida averages 230 sunny days per year. But that isn’t the only reason it’s a good place to install solar panels. Additional incentives in Florida can minimize the initial investment. At this point, less than five percent of the state’s energy comes from solar power. That stands to change, however, as utility companies invest more in clean energy and the cost for solar panel installations decrease.
On average, it costs $13,000 to install a 5kW solar panel system before rebates and incentives. A smaller 3kW system may cost less than $8,000 to install while a large 10kW system could cost upwards of $25,000.
For a 5kW solar panel system, the estimated payback period is a little more than 10 years. That means in one decade, homeowners will have recouped the initial investment in the solar panels and be able to truly pocket the utility bill savings every month.
The federal investment tax credit (ITC) is far and away the best solar incentive, providing 30 percent of a solar project’s cost as a credit towards federal income taxes. Instead of a deduction, which reduces taxable income (as would happen with any charitable donations you make in a year), a tax credit directly offsets what would otherwise be owed in taxes. Instead of just being taxed on a lower income, the federal ITC offsets what is owed in taxes and can even come back to homeowners as a refund from the IRS if they have overpaid taxes during the year. Here are the specifics:
2016 – 2019: The energy tax credit remained at 30 percent of the cost of the system.
2020 – 2021: Owners of new residential and commercial solar earned a credit of 26 percent of the cost of the system on their federal income tax bill.
2022 – 2032: Owners of new residential solar can earn a credit of 30 percent of the cost of the system on their tax bill. Commercial solar systems will also be eligible for 30 percent until 2025, at which point the U.S. Department of Treasury will determine if the ITC continues for commercial systems.
2033: Owners of new residential solar can earn a credit of 26 percent of the installation costs of the system on their tax bill.
2034: Owners of new residential solar can earn a credit of 22 percent of the installation costs of the system on their tax bill.
2035: There is no federal credit for residential solar energy systems starting this year.
There are no statewide solar panel rebates in Florida since there is no state sales tax. However, tax credits can make the installation more affordable.
Not all solar panels are created equal. While deciding which solar system is right for a homeowner, you’ll want to consider the size (kW) needed, the efficiency of the solar panels, the durability and more. Although this isn’t an exhaustive list, here are several of the top-rated solar panel systems.
Although the initial installation cost can be significant, there are many benefits to going solar.
Solar rooftop potential for the entire country is the number of rooftops that would be suitable for solar power, depending on size, shading, direction and location. Rooftop potential is not equivalent to the economic or market potential for rooftop solar – it doesn’t consider availability or cost. Rather, it is the upper limit of solar deployment on rooftops across the country.
Solar rooftop potential for an individual rooftop is the amount of solar that could be installed on that rooftop, based on its size, shading, tilt, location and construction. Satellite maps, irradiance data, equipment specifications and other factors inform the bids that installers present to customers to assist them in understanding the potential costs and benefits of solar panels on their roof.
According to National Renewable Energy Laborat-ory (NREL) analysis in 2016, there were over 8 billion square meters of rooftops on which solar panels could be installed in the U.S., representing over one terawatt of potential solar capacity. With improvements in solar conversion efficiency, rooftop potential is growing. Residential and other small rooftops represent about 65 percent of the national rooftop potential and 42 percent of residential rooftops are households with low-to-moderate income.
NREL estimates that an average of 3.3 million homes per year will be built or will require roof replacement, representing a potential of roughly 30 gigawatts (GW) of solar capacity per year. If even a small fraction of these new roofs receive solar installations, it could have a significant impact on U.S. solar power generation.
Next Article