NEXTera Maintaining the Electric Grid with Increased Residential Solar Use

Company

Florida Power and Light, a subsidiary of NEXTera Energy a leader in renewable energy, provides power to 5 million Florida homes.

Threat:

1. As part of a method to combat Climate Change many households have turned to installing solar panels on their roofs
2. The U.S. Department of Energy has started the SunShot Initiative with the intended goal of lowering residential solar PV system installation to $1.50/Watt. (SunShot Initiative. Department of Energy, n.d. Web. 30 Oct. 2016.). Cheap PV panels from China has reduced the cost of hardware and now much of the cost is driven by soft costs of installation.
3. Beyond decreases in manufacturing costs, many businesses focus on technological innovation within the residential solar industry to make its use more widely spread. One example, Tesla and SolarCity unveiled on October 28^th new methods for integrating solar cells into the actual building material (roof tiles) and showing the durability of the new panels in relations to existing roof materials. (Fehrenbacher, Katie. “Tesla and SolarCity Finally Unveil Their Solar Roofs and Upgraded Batteries.” Fortune, 28 Oct. 2016. Web. 30 Oct. 2016.)
4. “In 2008, the Florida Public Service Commission ruled that every Florida electric utility is required to provide customers that have installed renewable generation systems the opportunity to sell their excess energy back to the utility through an interconnection agreement and net metering program.” (Klas, Marry Ellen. “Why Are Utilities Spending $22 Million to ‘protect’ Your Right to Solar?” Miami Herald, n.d. Web. 30 Oct. 2016.)

Company/Industry Response:

Utility companies, including FPL, have widely supported an amendment titled “Rights of Electricity Consumers Regarding Solar Energy Choice” which would continue to allow consumers to own or lease solar equipment installed on their residential property, but states customers who do not install solar should “ not [be] required to subsidize the costs of backup power and electric grid access to those who do.” (Klas, Marry Ellen. “Why Are Utilities Spending $22 Million to ‘protect’ Your Right to Solar?” Miami Herald, n.d. Web. 30 Oct. 2016.). The stated concern of the utility companies and FPL is that as more people transition to using residential solar power more of the cost of maintaining the overall electric grid and the excess capacity needed during nights and natural disasters (i.e. hurricanes) will fall onto fewer and fewer consumers.

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The utility company has gained the support of the NAACP of Florida and Central Florida, Jacksonvillel, and Pinellas County Urban league since the belief is the urban poor would not be in a position to make the transition to residential solar and they would have to deal with more of the burden of the grid costs, while subsiding more wealthy families who overtime would make the transition to residential solar.

The amendment driven by the Utility companies will be voted on in this coming election and the word choice of “subsidize” will allow for the utilities companies to put a higher surcharge on home owners with solar panels and/or reduce the reimbursement for energy produced via panels and pushed back into the grid.

Concerns Raised by Opponents

Similar bills are being considered across the United States, including California, and the opponents of FPL and the utility companies have focused on two areas.

• The associated surcharge and fees would no longer make it financially viable and existing home owners with panels would lose on their investment
• This bill will slow the adoption of solar panels use at residencies and reduce the rate of adoption of renewable energy within Florida

My Assessment

Given the growing use of residential solar panels and the requirements of utility companies to have power readily available for customers, I do think it is the best decision for Florida Power and Light to work with the state to modify the Florida constitution. The surcharges and/or reduced reimbursement will ensure that the grid can remain stable during this transition period. I do believe it will result in reduced adoption of renewable energy by home owners, but overall Florida will have a reduced risk of suffering through brown outs and Florida’s poor will not be burdened by exponential increases in electricity costs.

Consideration

Given that NEXTera, the parent company, focuses heavily and markets itself as a renewable energy company if the amendment passes the company should review the impact the bill has on the adoption of renewable energy in Florida. If by supporting this bill there is a decline in the rate in which renewable energy is growing in comparison to fossil fuels, i.e. quick cycle natural gas, the company should take it upon itself to reinvigorate the renewable growth.

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