Sun Rising in Florida? Utility-Scale Solar Projects in Context

Guest Blog | February 9, 2015 | Energy Policy, Solar

SACE Staffers Charlie Coggeshall and George Cavros contributed to this blogpost.

It’s been a good run for solar power in Florida in the past few weeks. First, Gulf Power Company announced plans for 120 megawatt (MW) of solar power purchase agreements on 3 military bases; shortly thereafter Florida Power & Light (FPL) announced that it plans to build three solar projects totaling 225 MW. This is good news for Florida’s customers, and SACE applauds Gulf and FPL for taking needed steps toward tapping the Sunshine State’s greatest energy source: the sun.

Gulf Power, a wholly-owned subsidiary of Southern Company and the smallest of Florida’s major investor-owned utilities, serves about 435,000 customers in Northwest Florida. Current solar capacity in Gulf Power’s service territory consists of about 1.5 MW of customer-owned generation (i.e., net metering customers), and no operating utility-scale projects. Therefore the addition of 120 MW will be a massive increase in solar capacity for Gulf Power. No doubt the utility is following the lead of and leveraging experience from its big brother to the north, Georgia Power, which is also working with the military to develop solar in meeting their Department of Defense mandate of 25% renewables by 2025. Also consistent with solar development in Georgia, Gulf Power is able to voluntarily incorporate these projects in a “cost-effective” manner that will not put upward pressure on rates.

In contrast to Gulf Power, FPL is the 800-pound gorilla in the Florida power market, with nearly half the state’s generating capacity and over 4.7 million customer accounts. According to the Solar Energy Industries Association (SEIA), FPL has 110 MW of operating utility-scale solar (35 MW is photovoltaic (PV) and 75 MW is concentrating solar power (CSP)), all of which was installed in 2010 or earlier. Customer-owned (i.e., net metered) solar capacity accounts for about 23 MW, and has been added on slowly but steadily over the past few years. FPL’s announcement to add 225 MW of utility-scale solar is an important increase and positive step for a utility that’s been relatively silent on large-scale solar for over four years.

However, SACE found it troubling that FPL would note in their press release that “solar power – even the most economical large-scale installation – is generally not yet cost effective in FPL’s service area.”

Considering how low the price points (see figure from GTM Research) have gotten on utility-scale solar in recent years, and the blunt statements by nearby Southern Company utilities regarding the cost-effectiveness of large-scale solar, the undermining statement by FPL seems unfounded. Unfortunately, with no transparent record of any competitive bidding on the projects or any cost data on the proposed solar facilities, the accuracy of this claim can’t be fact-checked. Read the press release further and it becomes apparent that FPL’s approach on solar remains un-embracing, and the “solar announcement” primarily serves to signal the utility’s continuing emphasis on natural gas and nuclear energy as it also announces its intention to build a new power plant that will likely run on natural gas. The sad irony is that FPL’s parent company NextEra will aggressively sell clean energy (yes solar power) to customers in competitive markets, but allows FPL to game their captive Florida market by limiting energy efficiency and solar, all while pushing fossil natural gas and over-priced nuclear power. All moves designed to maximize shareholder profit off the Florida ratebase, while limiting captive customer benefits and choice.

Meanwhile, the solar market for commercial and residential solar in Florida continues to stagnate with policies that impose burdensome taxes on solar, and Florida continues to be one of five states that explicitly prohibit the sale of power through third party sales. This type of ownership model has driven retail solar development in other states. Yet, on a bright note, a measure has been introduce to remove burdensome taxes on solar in the Florida Legislature, and the Floridians for Solar Choice citizen petition drive is underway to remove the barrier to so-called third party sales for solar power.

The announcements by Gulf Power and FPL, in addition to a recent request for proposal by JEA (Jacksonville’s electric utility) for 38 MW, puts Florida on track to have at least 600 MW of installed solar capacity by the end of 2016, not including any other potential utility-scale solar announcements from other Florida utilities as well as additional customer-owned generation. For perspective, North Carolina’s installed capacity as of October, 2014 was 722 MW, and neighboring Georgia is on track to have over one gigawatt (GW = 1000 MW) of solar by the end of 2016, through primarily Georgia Power programs, but also efforts by Georgia electric membership cooperatives.

As the largest state (by population) with the best solar resource east of the Mississippi, Florida can do better. Removing barriers to customer-sited solar and genuinely embracing the Sunshine State’s greatest resource will move Florida toward a leadership role and a truly clean energy future.


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