That will probably make Florida the top state marketplace for utility-scale projects during this period, knocking off long-time leader California.
But the two states’ markets are still evolving in very different ways. Florida’s regulated utilities are driving the state’s future capacity additions, but they’re typically opting to build and develop projects in-house.
That is pushed third-party solar developers towards the sidelines at one of the nation’s hottest markets.
Utilities possess the market
Florida may lack a renewable portfolio standard, but these days its utilities are yanking the solar market ahead anyhow.
Tampa Electric has plans for 600 megawatts of solar throughout its territory by 2021, Duke Florida is working towards 700 megawatts of solar by 2022 and Florida Power & Light, a subsidiary of NextEra that functions up of 10 million people in the nation, is operating on over 8 gigawatts by 2030.
In Florida, projects under 75 megawatts do not want the identical regulatory approval as bigger projects. Utilities can also recover prices on solar investments through the nation’s Solar Base Rate Adjustment, approved at 2017, provided that projects come in under a price cap approved by the utility commission.
Natural gas produces more than two-thirds of the nation’s electricity, according to the Energy Information Administration, however utilities state adding solar is now an economic option. (That’s not to say normal gasoline is no longer on the table for power developments ).
Those dynamics provide regulatory and economic incentives for Florida’s utilities to move towards solar, and build it themselves. Utilities also point to environmental benefits and client demand as motorists.
“In Florida, to the utilities’ credit, the growth of solar was directed primarily by the utilities themselves,” said Sean Gallagher, vice president of state affairs at trade group the Solar Energy Industries Association.
Gallagher said the self-ownership trend will rise as more utilities grapple with the energy transition and also look to acquire solar. “We’re going to see an increasing number of utilities looking to have renewable facilities.”
A tougher ride for developers
Florida’s solar surge hasn’t benefitted all in the market equally, though. Advocates say the state remains a catchy environment for third party programmers, even as its economy balloons.
The mixture of utility expertise and economic benefit associated with self-building has led to somewhat of a”closed market” for third party programmers, according to Myles Burnsed, vice president of strategic improvements at EDF Renewables.
While some utilities say they’re open to working with developers — Tampa Electric told Greentech Media it is working with Invenergy and Solar, for example, and Jacksonville Electric Authority recently signed a deal with EDF — Florida’s utilities are not playing solar development catch-up at the way some less-experienced utilities may want to. Florida Power & Light’s parent, NextEra, is one of the largest solar and wind developers in the U.S.
“In Florida, we’re a bit unique because we’ve got NextEra and Duke as two of the huge anchors,” said Burnsed. They’ve been able to just do it in-house.”
That’s helped boost WoodMac’s forecasts, but solar fans state it creates an unhealthy atmosphere for competition, which may hurt ratepayers.
“For our members it’s a little bit of a mixed bag. … The utilities in Florida are developing these solar installations on their own as opposed to going out to the market to get a competitive procurement to return the best price for the utility and their customers,” said SEIA’s Gallagher. “We want to praise the Florida utilities for seeing that solar is the ideal way forward for the customers, but [also] motivate them to look to the marketplace to get a much better deal.”
The most recent data from WoodMac puts utility fixed-tilt system pricing at $0.93 per watt and utility monitoring system pricing at $1.04 per watt, a bit lower compared to Florida’s price caps delegated at $1.50 per watt for Tampa Electric Company and $1.75 per watt for Florida Power & Light,* for instance. If utilities have to sign projects through a request for proposal, Burnsed stated it would likely result in more competitively-priced jobs.
“The [utilities] are very competent and good solar programmers, but it could be a much better way to obtain job competition [and] potentially lower prices for in-use customers since the jobs are being rate-based,” explained Burnsed.
Gallagher also noted the potential for partnerships, together with third-parties starting the evolution process and utilities buying a project at a specific stage.
“Our campaigns in Florida are actually about introducing more competition to that market,” Gallagher said, adding that SEIA is currently determining whether the utility commission or the legislature is the ideal place to lobby for changes.
The most concrete chance may come when the Solar Rate Base Adjustment is up for renewal, which every utility pursues separately for new projects. The general public service commission will think about a proposal from Duke on July 9. Tampa Electric filed a petition in late June to speed base two projects anticipated to come online in January 2020.
*An earlier version of this article misstated the units of pricing. It has been corrected.
