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Is Solar Panel Leasing Illegal in Florida?

Florida, the Sunshine State, should also be called the Land of Make Believe Solar Laws. When it comes to solar misinformation Florida is the Florida Man of distributing #FakeNews about its own solar policy. The utilities are not making you shut off your solar when the power goes out. Net-Metering is not illegal. Home Owners Associations aren’t setting up rules to make solar illegal. And contrary to popular belief, solar panel leasing is not illegal in Florida. No matter how many articles you read that tell you differently, Solar Leasing is NOT illegal.

Why the Confusion?

Florida has a highly politicized and publicized perceived ban on the third-party sale of solar electricity. When applied to solar panel financing this is commonly known as a solar power purchase agreement or solar PPA for short.

The structure of the Solar PPA made choosing solar so easy that (well qualified) homeowners simply had to choose to pay a lower rate for energy and a qualified solar energy company would come install the panels. No money up front and no complicated conversations about tax credits and rebate qualifications. The company installing the panels would own, operate, maintain, warrant, and even guarantee a certain amount of energy would be delivered or your money back. Because the company owns the solar (not the homeowner), it is called Third Party Ownership.

At one point in time, the third party ownership of solar through either a Solar PPA or the Solar Lease was responsible for over 70% of all solar installations in the U.S. This is where the confusion begins. Because Leasing solar is also considered third-party ownership, or third-party leasing it has commonly gotten confused in the Florida style debates we typically have about PPA's.

So Third Party Ownership is Legal – Some Say it’s Not?

They are wrong. While the third-party sale of electricity (also a form of third-party ownership) is perceived to be banned, illegal, prohibited, taboo, or verboten the third-party ownership model using a solar lease is explicitly allowed. Because both solar Lease's and solar PPA’s are a form of third-party ownership they frequently get mixed up. Even Julia Pyper, one the smartest, best, well-informed, knowledgeable, and pretty darn hip solar journalist has gotten it twisted (link). If Julia can make an error -- nobody is safe -- nobody. But that is the allure of Florida - it just draws you into its peninsular web of solar lies. #WebOfSolarLies

Solar Panel Leasing is Legal in Florida, but Solar PPA’s are not? What gives?

Yes and maybe. Solar Panel Leasing in Florida is most-definitely-legal.

Solar PPA’s may or may not be legal. They are certainly excluded from net metering, however, it has yet to be tested if a solar PPA is actually illegal or not.

The perceived ban of the third-party sale of electricity, or in less wonky terms - a solar company installing solar panels on your home and then selling you electricity by the kilowatt-hour (like your utility) comes from a court case a long, long time ago in which a wholly owned subsidiary of an investor-owned utility attempted to build a new co-generation facility through a joint venture and then sell the electricity generated to Pratt & Whitney Corporation on land which the joint venture leased from Pratt & Whitney Corporation -- essentially an onsite power plant with one, very large, customer.

Long story short the Supreme Court of Florida upheld a decision by the Florida Public Service Commission (which regulates utilities) that limiting competition of the sale of electricity was in the best interest of the public and was best suited to be a service provided by government granted monopolies. The caveat to this case is that the company building the power plant was partially owned by the utility which had already been granted by the government a monopoly. So it was kind of in the best interest of the public at the time for the Florida PSC to not allow the utility to go building little-personalized power plants, to sell onsite electricity, all over the state all willy-nilly.

Nobody has bothered to test if the same outcome would prevail using a private company with no direct ties to the utility under the traditional solar PPA structure in Florida, however, it has been tested in North Carolina. In North Carolina, where solar PPA’s are also perceived as banned, but the state also has a very clear anti-monopoly law, Duke Energy, the nation’s largest investor-owned utility, kept it classy and sued a non-profit and a primarily African American Church for going solar and won (being appealed) for using a third-party sale of electricity agreement… so there’s that.

What Happened to that Florida Amendment?

Wasn't there a solar amendment that gave away all of the solar power to the utilities? No. That. Did. Not. Happen.

During the 2016 Presidential election, a pro-solar advocacy group attempted to collect signatures to allow third-party sales of electricity.

The group was met with the full force and protibial fire and fury of ALL the investor-owned utilities in the state of Florida and some very cash flushed outside groups who are known for funding anti-climate, anti-consumer legislation. The utilities and their pals spent over $22 million in highly deceptive advertising even going so far as to bring the Florida Firefighters Union into the mix - who later retracted their support after figuring out they were duped.

At the end of the day, NEITHER amendment was signed into law. And neither amendment would have authorized or banned third-party financing using a solar lease. However, the amount of press Florida’s Amendment 1 received was constant, primarily negative - bigly, and much of it grouped solar leasing with the controversial solar PPA as if they were the same product – which to be clear – they are not.

So is Solar Panel Leasing Legal in Florida?

For the love -- Yes. Solar Leasing is Legal in Florida. It always has been.

In a state where Floridians in almost all utility territories benefit from Grade A net-metering. Solar leasing is legal and customers who lease their solar can participate in Net-Metering (which also exists, is not banned, or illegal).

solar panel leasing florida This is an excerpt from Florida's Net Metering Rule which explicitly states solar leasing combined with net metering is allowed.

 

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Frequently Asked Questions

Can FPL or my HOA prevent me from switching to solar?

The Florida Solar Rights Act is a law that forbids any entity—including homeowner associations—from prohibiting the installation of solar or other renewable energy devices on Florida buildings.

An association may require approval of a system installation and may establish restrictions for installations. However, any such restrictions must be reasonable, not arbitrary, and applied in a uniform manner for all association members. Also, any restrictions must not have the effect of impairing the performance, or increasing the cost, of a solar system.

In particular, a homeowner association may not prevent the installation of solar collectors on the roof of a home. The association may determine where on the roof the collectors may be installed, so long as the collectors face within 45 degrees of due south.

Finally, any requirement(s) that a system be screened from view by trees, fences, ground mounting racks, or a remote roof location that is hidden from the street, will generally violate the statute.

Click here to verify information is provided by the Florida Solar Energy Industry Association

Is solar free for Florida homeowners?
  • The sun is free to everyone.
  • Solar panels and specific back-up battery systems qualify for a number of rebates, tax credits and incentives.
  • There is a cost associated with solar energy because you are paying for your system. 
  • Financing enables homeowners to make the transition with $0 upfront costs
  • Systems often cost the same amount monthly as your current FPL bill
  • Solar puts equity in your home because you own the system and increases the value a minimum of 4.1% - click here for the Zillow case study

Does solar increase my home value?

Not only can adding solar panels to a home save energy costs and help the environment, it also can potentially increase a home’s value. In 2019 Zillow found that homes with solar energy systems sold for 4.1% more on average than comparable homes without solar power. For the median-valued home, that translates to an additional $9,274.

The sale premium varies substantially by market. In Riverside, Calif., for example, homes with solar-energy systems sold for 2.7% more than comparable homes without solar power—a markup of $9,926 for the median-valued home in the metro. In the greater New York City metro, solar-powered homes have a premium that is double that of Riverside. At 5.4%, that’s an extra $23,989 in value for the typical home in New York. In three other coastal metro areas—Los Angeles, San Francisco and Orlando, Fla.—homes with solar power can fetch a premium of around 4%.

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