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SEPA’s 2019 Solar Snapshot Report Finds Florida’s Solar Market is Flourishing

Today, the Smart Electric Power Alliance (SEPA) announced the release of their 2019 Utility Solar Market Snapshot report. Now in its 12th year, the Utility Solar Market Snapshot is the only industry report based on interconnection data and market insights obtained directly from more than 500 utilities across the country. This year’s report finds that cumulative solar deployment demonstrated an overall 2.2% increase in growth rate from 2017, and the solar market continues to expand to new regions beyond the traditional sustained markets (e.g., California and North Carolina)— with Florida, Washington, and Rhode Island seeing year-over-year growth rates of 311.9%, 150.2%, and 344.1% respectively.

The report provides further detail by deployment type, finding that the residential solar market declined by 5.7%, the non-residential solar market declined by 17.9%, and the utility-solar market grew by 15.1% in 2018. Regionally, growth occurred beyond the traditional powerhouse markets of California and North Carolina. Most notably, the utility-supply markets of Florida, Texas, and Minnesota showed robust growth, with a significant portion of each of these state’s cumulative solar capacity added in 2018. Specifically, Florida interconnected 876.2 MW of utility-supply solar – a more than 200% increase in Florida’s total installed utility-supply capacity from 2017.

The 2019 Utility Solar Market Snapshot Report details the utilities behind Florida’s growth in utility-supply solar capacity. The deployments were driven by Florida’s three largest IOUs:

  • Florida Power and Light Company (FPL), which interconnected 597.5 MW of utility-supply capacity in 2018 and has an additional 298 MW planned for interconnection in 2019;
  • Tampa Electric Company (TECO), which interconnected 144.8 MW of utility-supply capacity in 2018; and
  • Duke Energy Florida (DEF), which interconnected 74.9 MW of utility-supply in 2018.

Furthermore, SEPA analysis of the utilities’ 10-Year Site Plans finds that DEF and TECO plan to add an additional 700 MW and 600 MW of utility-supply solar respectively. Remarkably, FPL anticipates interconnecting more than 4 GW of solar by the end of 2027, a significant portion of which will come through their community solar program.

FPL in February officially filed their plans for “Solar Together”, which would be the nation’s largest community solar program with 1,490 MW of solar installed via 20 solar projects throughout the state, each of 74.5 MW capacity. The first 6 farms will be online in 2020, with the remaining 14 online by the end of 2021. FP&L has been working with a number of commercial, industrial, and residential, customers to secure participation in the program, and has seen significant interest across the state. Participation in this program will support the growing number of municipalities in Florida that have committed to reaching 100% clean energy, including the capital of Tallahassee. As the seventh city in the state to announce a 100% clean energy goal, Tallahassee aims to reach this target by 2050.

Something remarkable is clearly underway in Florida. The questions are how and why now? How is so much solar being added in Florida by these large utilities – how are they financing it? Why was 2018 the first year we saw these large utility-supply projects come online? Broadly speaking, the explosion of utility-supply solar in Florida is due to the continued decline in the price of solar photovoltaic (PV) technology, which is driving the expansion of utility-supply solar nationwide. These declines mean large-scale solar is increasingly cost-competitive with new coal and natural-gas generation, with new solar projects coming in lower than the cost of maintaining existing coal-fired plants in some regions of the country. FPL, TECO, and DEF are taking advantage of these economics and Florida’s abundant sunshine as a means to provide large-scale, affordable and long-term power generation to their utility members. Interestingly, SEPA found that several unique factors are enabling this explosion of utility-supply solar in Florida, specifically allowing utilities in the state to finance and own these solar facilities.

First, each of these utilities utilized a Solar Base Rate Adjustment (SoBRA) to incorporate the cost of planned solar additions into utility base rates under approval from the Florida Public Service Commission. This mechanism allows the utility to finance the large up-front costs for these projects through small immediate base rate increases, which consumers will recoup through lower future energy prices.

Additionally, the Florida Department of Environmental Protection only requires the completion of a comprehensive need determination permit for solar facilities larger than 75 MW. Plants below that threshold must simply demonstrate they are cost-effective when operational, resulting in utilities opting to focus on building solar plants just below the 75 MW capacity threshold.

These two regulatory mechanisms drove the dramatic increase in utility-owned solar in Florida in 2018, a trend that each utilities’ Ten Year Site Plan projects to continue. Of Florida’s 876.2 MW of utility-supply solar added in 2018, an astounding 817.2 MW consisted of 100% utility-owned projects. This differs from much of the rest of the country where utilities mostly opt for PPA agreements to eliminate upfront costs and minimize long-term risk. In North Carolina, absent the same SoBRA and sub-75 MW capacity permitting exception available in Florida, Duke Energy has opted to add all of their current and planned utility-supply solar projects as PPAs.

SEPA will continue to track utility-owned, utility-supply solar deployments in Florida. While the 2019 Utility Solar Market Snapshot finds that utility-supply deployments continue to grow nationwide, regulatory changes will likely be necessary for any state to approach Florida’s newly cemented lead interconnecting utility-owned, utility-supply solar.

The 2019 Utility Solar Market Snapshot is the first of three Snapshot reports based on data from SEPA’s 2018 Utility Survey. Upcoming reports will include the 2019 Utility Energy Storage Market Snapshot and the 2019 Utility Demand Response Market Snapshot.

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