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 would 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.
“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 Schafer. The AARP and others have fought against fixed fees, arguing that they harm low-income customers. One of the benefits of a fixed fee, Williams said in a 2019 speech, was that they will make “net metering customers go away.”
When the Green Cove Springs City Council first discussed changing its net metering policy during their May 20 meeting, they leaned heavily on Dan O’Hagan, Assistant General Counsel and Regulatory Compliance counsel at FMPA, as a kind of subject matter expert, which left Jones frustrated.
“They definitely don’t have my interests in mind,” he 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.
“I was thankful to hear that,” Jones said. “I know they have good intentions.”
But even with that compromise, Jones and Schafer worry the new rate will 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,” Shcafer 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.