Florida is well-known as the Sunshine State because of its year-round sunny weather that draws millions of tourists each year, but historically, Florida hasn’t actually been a national leader when it comes to solar energy generation. That said, financial incentives like Florida solar tax credit and rebate opportunities have played a huge part in its rise to become one of the top states for solar energy.
Florida Net Metering Programs
Regardless of the state, one of the most critical types of energy policy for solar panels is known as net metering. Through net metering, Florida residents can feed excess electricity produced by their solar panels into the power grid in exchange for utility credits. These credits can be used to pay for the energy a home uses and even lead to profit for those that consume less than they produce.
Net metering tends to be a state-by-state policy, as there is no federal policy regarding net metering. Florida is one of the states where there is, in fact, a statewide net metering program, applicable for homeowners regardless of which utility serves their area.
The specific net metering provision covers up to 2 megawatts (MW) of capacity for any customers who generate electricity with a renewable energy source. Florida Power & Light (FPL), and Duke Energy have the largest net metering programs in the state.
Florida Solar Tax Exemptions
Another financial mechanism that the Florida state government offers to solar system owners is solar tax exemptions. To start, Florida doesn’t want to make the upfront cost to purchase and install solar equipment to be any higher than the open market says it should be, so since 1997, all solar photovoltaic systems have been completely exempt from Florida’s sales and use tax. Once a solar PV system is purchased and installed, there is a statewide property tax abatement that further helps homeowners avoid paying taxes on it.
Federal Solar Investment Tax Credit
Floridians can also benefit from all the tax incentives, rebates and credits that are offered at the federal level. Over the past two decades, the federal solar investment tax credit (ITC) has attributed largely to the rapid growth in solar energy across business sectors, geographies and customer types. For systems installed and operational before the end of 2022, the federal solar tax credit is equal to 26% of the value of the installation, dropping to 22% for systems installed in 2023.