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SolarCity's arrival caps a tumultuous year for solar in Florida

SolarCity Corp.'s entrance into the Florida market could signal a turning point for the solar industry in the Sunshine State following a tumultuous year. SolarCity announced Dec. 1 plans to open an installation center in Clermont, Fla., to serve customers of Duke Energy Florida LLC and the Orlando Utilities Commission, and said it will soon be looking to expand to other areas of the state.

A key factor in SolarCity's decision to enter Florida was the rejection by voters in November of a ballot issue, for which utilities spent millions to support, that opponents said would have made it easier to stifle rooftop solar installation growth. "It reinforces to any policymaker or regulator that when you're making the rules, consider that the voters voted for competition and energy choice," SolarCity CEO Lyndon Rive told the Associated Press.

Under Florida law, however, only utilities can sell electricity directly to customers. The solar industry in the state has been pushing for years, thus far unsuccessfully, to allow third-party electricity sales, which would enable leasing of rooftop solar installations. A SolarCity representative clarified that the company only plans to offer its cash and loan product in Florida.

The arrival of a "national player" like SolarCity as competition may make some existing solar providers in Florida a little nervous, according to Patrick Altier, president of the Florida Solar Energy Industries Association, or FlaSEIA, and owner of Solar Trek Inc., a solar provider in Ocala, Fla. But he also views it as an encouraging sign of the growing demand for rooftop solar in the state that is likely to benefit the industry at large. "I see SolarCity moving into this market because they see the potential of the Florida market," he said. "And you know what? It's going to make everybody get better. So, man, I welcome those guys."

With 312 MW of solar capacity installed in Florida, the Solar Energy Industries Association ranks Florida 15th among states for cumulative solar capacity installed, as of Sept. 9, and counts 433 companies in the state employing more than 6,500 people. SEIA also notes approximately 2,315 MW of solar capacity is scheduled to be installed over the next five years in Florida, more than 19 times the amount installed over the past five years. And this growth in solar development is planned despite the absence of a renewable portfolio standard and the restriction on third-party sales.

Indeed, the failure of the November ballot initiative, known as Amendment 1, to gain the necessary threshold of 60% approval by voters has left Florida's existing solar policy framework unchanged. But Altier still views the results as a watershed moment for solar in Florida, an assertion supported by SolarCity's move, announced just a few weeks later. The controversial measure would have enshrined in the state constitution a right for Floridians to own or lease solar for personal use, as well as maintain regulatory oversight, and contained language that customers without rooftop solar "are not required to subsidize" grid costs for those who do.

Opponents of Amendment 1 criticized it as a "Trojan Horse" deployed by utilities to suppress competition from rooftop solar and argued the ballot measure did not expand or otherwise change the rights Florida residents already enjoy. In October, the Miami Herald and Tampa Bay Times published leaked audio of remarks by a member of a think tank working to promote Amendment 1 suggesting he was aware its ballot language was part of a strategy intended to sound pro-solar while negating the policy goals of solar supporters.

Altier said the fight over Amendment 1 helped solar providers in the state by pushing the issue into headlines and raising awareness of the solar options available to consumers. "This got so much attention," Altier said. "Our phone was ringing, I mean, just blowing up from people saying, 'OK I've seen all different kinds of messages here, what's the true story, what's going on?' So as we would tell people about this the utility companies generated an enormous amount of awareness for the solar industry." For his business, Altier ascribed eight sales to inquiries prompted by Amendment 1.

Nor was it the only opportunity in 2016 for Florida voters to weigh in on solar. In August, a proposed amendment that would expand a property tax exemption for solar and other renewable equipment to commercial properties passed with more than 72% approval. Altier said that measure, known as Amendment 4, helps to sell solar systems to commercial businesses because it provides more certainty around the tax treatment of the investment and for calculating the rate of return.

In order for Amendment 4 to take effect, the Florida state legislature needs to pass an "implementing bill" during its 2017 session, and Altier suggested a top priority of FlaSEIA in the coming year would be to support passage of that legislation.

Utilities are moving ahead with their own plans for solar development as well. Regulators in December approved a four-year rate settlement for NextEra Energy Inc. subsidiary Florida Power & Light Co. that allows for the development of up to 1,200 MW of new solar capacity. Duke Florida plans to install 550 MW of solar capacity over the next 10 years, according to a site plan filed with regulators earlier this year.

Looking ahead, Altier said the next issue in Florida will be a push by the solar industry to preserve net metering following media reports that Duke Florida and FPL plan on asking state regulators to change net metering rules to reduce the compensation rate or include a monthly fixed charge for customers with rooftop solar.

Duke Energy Florida spokeswoman Suzanne Grant said the Duke Energy Corp. subsidiary continues to review metering and billing methodology related to renewable generation. "We believe any renewable advancement policy should be transparent to all stakeholders, especially consumers, and recognize different consumers will want different solar and non-solar options. In Florida, these types of changes could be done at the PSC or at the Legislature," Grant wrote in an email.

"Renewable advancement policies may include subsidies, but Duke Energy believes these subsidies need to be defined, measured, and designed to evolve with the technology; therefore, like any subsidy, it should include consumer protections and be defined in scope, amount, and duration," Grant said.