Rooftop Solar Incentives At Stake In Upcoming Green Cove Springs Council Vote

May 28, 2021

Grayson Jones grew up in Green Cove Springs.

He installed rooftop solar panels on his childhood home back in September to lower his energy costs. He officially closed on the home last week. But after a few months, he noticed his bills were actually higher. So, he gave the city a call to find out what was going on.

“Long story short, I got them to acknowledge that they were not practicing what their contract required them to do with net metering,” said Jones, who’s now 28.

Net metering is what utilities pay solar customers for the excess energy they generate. Green Cove Springs adopted its net metering policies in January of 2012, which stipulates that the city credit its solar customers at the full retail rate (what they charge normal customers for 1 kWh), which ends up being a little over 8¢ per kWh.

But as Jones found out, he and the city’s other 20-or-so rooftop solar customers have all been receiving what’s known as an “avoided cost” rate, which comes out to about 2¢ per kWh.

Jones gets about 75% of all the energy he uses from his 42-panel solar system. He financed that installation for 25 years and his monthly payment is about $175. With the 2¢ buyback he was initially getting from Green Cove Springs, Jones said he was paying more every month than he would have if he were getting all of his energy from the city.

Meanwhile, the city was essentially paying Jones 2¢ per kWh of excess energy he generated from his solar system and then turning around and selling it to his neighbors at the retail rate of 8.3¢ per kWh.

“I'm paying for this huge system that's actually benefiting the city solely and not me,” Jones said.

The city has retroactively paid Grayson what he’s owed under the city’s net metering policy and is in the process of doing the same for the other rooftop solar customers in town. Since then, Jones said he’s “loved” his solar system.

But much to Grayson’s dismay, Green Cove Springs is now just one step away from cutting its net metering rate in half, which could effectively disincentivize rooftop solar in this small Northeast Florida town — a move that some worry could set a dangerous precedent for the state’s larger utilities, which are already angling for a change to Florida’s net metering rules.

Related: Is Rooftop Solar Under Threat In Florida? If So, Jacksonville Could Offer A Glimpse Into The Future

“It only affects a few people, and they're a small town in Florida, but big picture this is definitely a step in the wrong direction for Florida, as a whole,” said Alissa Schafer, a communications and research specialist for the Energy and Policy Institute (EPI), a national watchdog organization. “We have seen utilities throughout the state and different interest groups throughout the state looking at net metering policy very intently or even seeing it pop up at the state level in legislation.”

The city of Green Cove Springs gets its power from the Florida Municipal Power Agency (FMPA), a wholesale power agency that’s owned by the state’s municipal electric utilities. The municipal utilities they serve, including the city of Green Cove Springs, provide electricity to 2.6 million Floridians, or about 12% of the state’s population.

FMPA’s CEO, Jacob Williams, is a former coal executive at the now bankrupt company Peabody Energy. In the past, Williams has advocated for charging electric customers fixed fees, according to the Energy and Policy Institute. The AARP and others have fought against fixed fees, arguing that they harm low-income customers. One of the benefits of a fixed fee is that they will make “net metering customers go away,” Williams said in a 2019 speech to member cities that at the time were reviewing utility rate structures.

FMPA has taken steps to reduce utility bills for low-and fixed-income customers they serve.

“FMPA’s mission is to provide low-cost, reliable and clean energy to all customers,” Ryan Dumas, public relations specialist at FMPA, wrote in an email to WJCT News. “We are committed and focused on doing that. As a result, our power costs are the lowest in 16 years, and we are adding affordable solar energy options that our members and customers are excited about.”

When the Green Cove Springs City Council had its first public hearing on the amended net metering policy during their May 18 meeting, Dan O’Hagan, Assistant General Counsel and Regulatory Compliance counsel at FMPA, was invited to explain FMPA’s role in the net metering process and Green Cove Springs’ current rate structure. 

Jones felt that in that meeting the City Council leaned too heavily on O’Hagan, treating him as a kind of subject matter expert, which left him frustrated. “They definitely don’t have my interests in mind,” Jones said.

He was further frustrated when he heard council members cite an argument that Schafer says is being used more and more often by utilities as they push to scale back net metering policies: non-rooftop solar customers are “subsidizing” people like Jones, one of the few who can afford to install rooftop solar panels.

But new research from Michigan Tech University suggests the opposite may actually be true.

“Customers with solar distributed generation are making it so utility companies don’t have to make as many infrastructure investments, while at the same time solar shaves down peak demands when electricity is the most expensive,” said Joshua Pearce, an engineering professor at Michigan Technological University and the lead author of the study.

During a recent Public Service Commission workshop, the Office of Public Counsel — which provides legal representation for residents in utility related matters — made a similar argument, saying rooftop solar is an “important part” of Florida’s future energy mix.

In the end, the City Council came to a compromise: an “avoided cost plus” rate, which will essentially mean rooftop solar customers are paid 4¢ for each kWh of excess energy their systems generate. On top of that, existing solar customers like Jones will be grandfathered into the new rate over a 20 year period from when their systems were activated, meaning they will continue to receive the higher rate for the time being.

The hybrid rate was proposed as an alternative to the “avoided cost” rate with the hope that it would still incentivize new solar customers while simultaneously paying the city’s existing rooftop solar customers the full retail rate for the time being.

“The City still has to maintain the same amount of infrastructure because we are still selling power to rooftop solar customers. Therefore our ‘fixed costs’ and ‘infrastructure investments’ are the same. Twenty-one customers out of our 4,300-plus customers do not provide enough rooftop generation to effect a notable difference in our peak load,” explained Green Cove Springs Assistant City Manager Mike Null. “However, many more customers could make a difference. The City does not dispute the merits of rooftop solar, and we have made that clear. However, our rates must be established in a manner that is fair to all customers.”

The City Council has also expressed interest in revisiting its net metering rate in the future as more residents install rooftop solar.

While Jones was glad the council appeared to be headed toward settling on a compromise, he and Schafer still worry the new rate would disincentivize others from installing rooftop solar panels on their homes in Green Cove Springs.

“The concern here is that it's setting a really bad precedent for rooftop solar,” Schafer said. “In Florida, as we know, we need every tool in the toolbox to be moving towards a clean energy future, and rooftop solar is part of that.”

The City Council will vote on whether or not to lower its net metering rate during its next meeting at 7 p.m. on Tuesday, June 1. If the change is approved, the amended rate will be forwarded to the Public Service Commission for approval.

Brendan Rivers can be reached at brivers@wjct.org, 904-358-6396 or on Twitter at @BrendanRivers.

Editor’s Note: This story originally stated, incorrectly, that the amended net metering policy was first discussed publicly on May 20.