The solar energy sector has been increasing steadily for a while now, but 2016 is shaping up to be a year of considerable solar milestones. According to the recent U.S. Solar Market Insight report, “With more than 1.1 million residential solar installations nationwide and a contracted utility-scale pipeline over 20 GW, the industry is on pace to nearly double in size in 2016.”
With residential and commercial solar farms popping up nationwide, it’s no secret that the industry is now growing at an exponential rate. Federal and state solar tax breaks are also increasing, as a means of further expanding the use of solar energy in the U.S.
Solar in the Sunshine State
According to the SEIA (Solar Energy Industries Association), “Florida, ‘the sunshine state,’ ranks third in the nation for rooftop solar potential, but all the way down at 14th for cumulative solar capacity installed.” With so much sunshine, shouldn’t they rank higher?
Although SEIA states that, “more than half of all U.S. states have some type of renewable energy standard or goal in place,” Florida does not. A renewable energy standard (RES) is simply a requirement that a certain amount of energy that is used and/or sold by utility companies must generated from renewable energy sources, such as wind and solar.
In addition, the Sunshine State doesn’t allow not allow power purchase agreements (PPAs), one of the two main ways that solar energy is financed. With a PPA model, customers are able to purchase power at a lower rate than they would if they purchased it through a local utility company, and there is no additional cost to the consumer.
The second most popular solar financing model is called a solar lease. In this model, the customer pays for the solar energy system over time vs. paying directly for the power generated. There are ways for the customer to avoid paying any upfront costs in this scenario as well.
Support for Solar
Most recently, Florida voters spoke loud and clear in a vote to approve a significant solar tax break for Florida businesses. The tax break currently exists for residential property owners, but is now applicable to businesses as a way of encouraging them to utilize solar energy.
As a result of the voting, which took place at the end of August 2016, there will be a new amendment added to the Florida Constitution. The amendment, which received 72.62% of the vote, will allow Florida businesses property tax exemption for solar energy and other renewable energy forms installed on business and industrial property for a full 20 years.
An additional bill must pass in 2017 in order to put the amendment into play, and the results of the November general elections will also affect the future of solar in Florida and nationwide.
Eligibility and the Future
There are specific rules around business eligibility for the solar tax credit, including equipment that uses solar energy for generating electricity and heating water, in addition to indoor lighting powered by very specific solar energy systems, which are outlined in more detail in the Guide to Federal Tax Incentives for Solar Energy.
Environmental and business tax relief groups are hopeful that the passing of this amendment with increase the frequency of talks about the issue of climate change. These groups are also optimistic that the new amendment will push legislators towards working to decrease the state’s dependency on fossil fuels in the future.