Florida Solar Energy Laws, Incentives and Protections Impacting Homeowners

Contributed by Daren Goldin

Until recently, Florida has lagged behind other states like California when it comes to solar energy. Unlike California and many other states, Florida lacks a renewable portfolio standard mandating that a certain proportion of the state’s energy supply comes from renewable sources of energy.

In recent years, however, solar has grown tremendously in the state and we actually have some very friendly state policies that incentivize and protect solar.

In addition, there are lien laws that are important for homeowners to understand before taking on any construction project. These laws vary state to state, but you can be sure that your state has a version.

Incentives for solar in Florida

Floridians benefit from the federal investment tax credit (ITC) for solar which allows a solar customer to receive a tax credit of 26% of their contract price in 2020. However, this credit is phasing out and will disappear in a year and a half unless it is extended by Congress.

At the state level, there are 2 incentives for solar in Florida.

1. Solar is exempt from sales tax, which greatly reduces the final cost.
2. Solar is exempt from property tax, meaning that county tax collectors ignore your solar array when assessing your home’s value.

These 2 incentives make solar very attractive when compared to other home improvement investments, which would be subject to both sales and property taxes.

Consumer protections for solar in Florida

The Florida Solar Rights Act is a property rights act that prevents HOAs and other governing bodies from enforcing rules that would prevent homeowners from getting solar panels. Under the Florida Solar Rights Act, HOAs can require approval before solar is installed. However, this approval cannot be dependent upon factors that would prevent the array from functioning.

In other words, they can require approval, but they cannot deny homeowners permission to get solar.

For instance, HOAs cannot mandate that solar panels be out-of-view if locations within view are the best locations for them to produce effectively.

Net metering in Florida

Solar arrays are designed to produce more power than homes require while the sun is shining so that customers can benefit from solar when the sun isn’t out. This is possible due to net metering, which allows solar customers to trade excess solar energy with the utility in exchange for a credit they can use to receive energy back.

Net metering is the key policy that allows residential solar to exist. Without it, solar businesses would struggle to exist. This is because net metering allows solar customers to replace their entire energy bill with solar even though the electricity powering their home is not coming directly from the solar array at all times.

Net metering is generally protected at a state level, although municipal utilities such as JEA have chosen to severely limit or eliminate it for new customers.

Lien laws and lien release

It’s critical that homeowners understand Florida lien law before committing to a solar project. Contractors include details about lien law in their contracts. They are required by law to include this notification about lien law in our contracts. By encouraging homeowners to ask as many questions as they can think of about this section of the contract in advance contractors allow for less confusion down the line.

The contractor will record a notice of commencement (NOC) with the county. This notice must be signed by the homeowner and provides each party with certain protections. The primary protection it offers the contractor is the ability to file a lien if the homeowner does not pay on time. The protection it grants the homeowner is ensuring the homeowner does not double-pay a contractor and a subcontractor if there is one performing the job. This is ensured because the homeowner can require a partial lien release each time they issue payment to the contractor. 

By Florida law, solar contractors may file a lien on a home if payment is not received in accordance with the requirements of the contract. Contractors have 90 days to file a lien after the final work has been performed on the project.

Liens are not required to fulfill a project and are only filed if a customer does not meet their contractual obligations.

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