ST. PETERSBURG — Saving energy can be expensive.
That was at least part of the reasoning behind the Public Service Commission’s decision last week to dramatically lower conservation goals for Florida’s four major utility companies.
Programs that offer rebates for installing solar panels or an efficient water heater cost companies such as Duke Energy millions of dollars each year — and drive up rates for everyone — while they help only a few households cut down their bills, commissioners said.
But in a state that already lags behind much of the nation in terms of renewable power generation, environmental groups and energy entrepreneurs say the decision reinforces a growing perception that Florida’s government has stacked the deck in favor of old guard utilities.
A month after the release of a report showing the Sunshine State employs more than 130,000 clean energy workers with the potential to add another 12,000 by next year, clean energy advocates maintain the demand for alternative power is strong in Florida.
That potential mostly is ignored by state lawmakers and regulators, though, who approve new power plants even as they roll back rules that would allow utilities, businesses and individuals to more easily invest in alternatives, says Scott McIntyre, president of the Florida Alliance for Renewable Energy.
“The state of Florida, its current leadership has allowed the utilities to paint us into a corner,” said McIntyre, who runs the Tampa-based solar company Solar Energy Management.
“We were already sinking below water relative to the rest of the county, but now we are starting to drown.”
Florida’s Energy Efficiency and Conservation Act requires state regulators to set energy-saving goals every five years for power companies, with the long-term objective of reducing the state’s electricity consumption.
Based on those goals, the utilities must get approval for a variety of programs aimed at reducing customers’ power usage, including discounts for new air conditioning systems, insulation or even adding solar panels to a home.
Since the last goals were set in 2009, electric companies have watched power demand decline while higher federal efficiency standards for appliances and building materials have caused household power use to steadily fall.
At the same time, the price of natural gas has dropped by 50 percent, making the need for alternative energy resources less urgent, PSC staffers have stated.
Duke Energy, Florida Power & Light, Tampa Electric Co. and Gulf Power Company all have introduced various incentives and rebates to help meet the conservation goals, but commissioners concluded most of these recent efforts haven’t been cost-effective nor have they offered much help to most customers.
Programs such as a rebate for residential solar panel systems have proven popular, but they’re limited to a small number of customers, many of whom probably could have afforded to install them without an incentive.
The average person who takes advantage of solar energy incentives has a household income of more than $100,000 a year and lives in a home valued at about $350,000, PSC Commissioner Ronald Brise said at a Tuesday meeting in Tallahassee.
“There’s a large swath of our community that the way the programs were designed could not benefit from the programs,” Brise said.
The cost of rolling out these programs is passed on to all utility users, meaning the majority of ratepayers effectively subsidize incentives enjoyed by a few, Commissioner Lisa Polak Edgar said. “Sometimes that’s lost in the desire for environmentally sound energy use and energy policy,” she said.
In the past four years, about 2,000 of Duke Energy Florida’s 1.7 million customers received a solar rebate at a cost of more than $2 million each year for both residential and commercial customers, according to the company.
The commission voted to let the incentive program expire by the end of 2015 and plans to hold workshops in the meantime to devise a more efficient way to encourage the use of solar power.
The regulators, who are appointed by the governor, also moved to lower the four utilities’ power conservation goals for the next five years, though wide-ranging rules coming from the federal Environmental Protection Agency aimed at national carbon reduction and energy efficiency may drive them to revisit the issue sooner.
Recent comments by both PSC commissioners and utility officials cast doubt on the promise of solar as a primary solution for Florida’s immediate energy future.
While renewable energy proponents cite studies placing Florida near the top of the nation in solar energy potential, PSC Chairman Art Graham said the state is also a leader in annual rainfall and its ability to capture the power of the sun may be exaggerated.
“I think the whole Sunshine State is just a license plate slogan,” Graham said jokingly at a recent meeting.
Duke is investing in large batteries to store solar energy and other technologies to make it more efficient, but currently solar panels only operate about 20 percent of the time in Florida and they don’t produce sufficient electricity to meet the needs of customers during peak electricity use times, company spokesman Sterling Ivey said.
After the solar rebate program expires, the company has expressed interest in meeting future conservation goals by building a solar energy farm somewhere in Pinellas County that would serve a larger number of local customers.
All these arguments about solar energy in Florida only serve to mask the truth about the state’s wayward energy policies, or lack thereof, according to environmental groups.
The Southern Alliance for Clean Energy and the Sierra Club had been pushing for the PSC to require 1 percent renewable energy standard for the utilities they say has been adopted by 20 other states, but instead regulators allowed them to slash their efficiency goals by about 90 percent or more compared to the 2009 standards.
“When people start to put solar up in big numbers, that will decrease the money that utilities’ shareholders make and they’re doing everything they can do to fight the inevitable,” said Susan Glickman, Florida director for SACE.
At the same time regulators question whether ratepayers should be made to subsidize solar programs the PSC doesn’t deem to be cost effective, they approve expensive natural gas plants that utilities mostly will pay for through increases to customers’ bills, Glickman says.
For clean energy supporters, the main issue isn’t simply the short-term loss of incentives for home efficiency enhancements.
“It’s less about the couple hundred dollars toward insulation. It’s ultimately about avoiding building expensive new power plants,” Glickman said.
While many states have passed comprehensive standards for how much energy utilities must produce from wind and solar, Florida has no such rules and thus encourages electric companies to build large power plants which ultimately will prove more profitable for them in the long run than encouraging consumers to reduce their power bills, she said.
Florida households spend about $1,900 a year on electricity, which is 40 percent more than the national average, according to a report on clean energy jobs published last month by Natural Resources Defense Council affiliate Environmental Entrepreneurs.
As the cost of generating solar energy has dropped by about 80 percent in the past five years, demand for alternative power could be huge in Florida, but inconsistent incentives and a lack of clear policy for renewable investment is keeping much of that potential from being tapped, the report states.
McIntyre, the Tampa solar company CEO, says he is a champion of free market economics when it comes to energy and he would like to see Florida allow individuals and business owners to sell their own power to others rather than having to go through utility companies.
He doesn’t believe that will happen until political winds change in Tallahassee, where most elected officials long have favored policies benefitting big utilities.
When you clear away all the debate, he said, the logic for consumers is simple: “It’s cheaper to save energy than it is to produce energy.”