Florida Photo voltaic Incentives (2023 Tax Credit & Rebates)

Florida is a solar-friendly state and has extra photo voltaic incentives than most states, and it wants them. The common photo voltaic system in Florida is about 2.5 kilowatts (kW) bigger than the nationwide common, which equates to a complete set up price of about $29,095, a lot larger than the nationwide common of $23,940.

Profiting from Florida’s photo voltaic incentives is important for conserving your photo voltaic array inside price range. The desk beneath features a fast breakdown of all the photo voltaic incentives in Florida and estimated financial savings you may count on from each. I’ll clarify these in better depth within the following sections.

My Take: The federal tax credit score is the only most vital photo voltaic incentive in Florida. It’s simple to use for and may prevent hundreds of {dollars}.

The federal authorities gives a 30% federal tax credit score in your whole system’s set up price. The general price contains panels, inverters, wiring, conduit, photo voltaic battery storage and labor. In Florida, the common credit score worth is $8,729, a lot larger than in most states.

It’s essential to notice that this incentive will not be a rebate, so these financial savings aren’t assured. Slightly, this can be a tax credit score. Which means your tax burden for the yr wherein you put in your system will get decreased by 30% of your full set up price. You gained’t see any profit from this credit score in the event you don’t owe cash in your revenue taxes.

Nevertheless, you don’t should take the credit score . You possibly can roll over any unused credit score to future tax years for as much as 5 years. Finally, in the event you count on to owe round $1,750 or extra per yr for the subsequent 5 years in revenue taxes, it’s best to have the ability to take your complete credit score.

The Power Coverage Act, signed in 2005 throughout the Bush administration, established the federal tax credit score. The unique credit score was 30%, however the price scaled again over time and was able to expire in 2024.

The Inflation Discount Act (IRA), handed in 2022, revived the tax credit score, prolonged its expiration date, elevated the speed again to 30%, and set a brand new price schedule. It’s:

• 30% for all programs put in previous to 2032
• 26% for programs put in in 2033
• 22% for programs put in in 2034

With out renewal, the credit score discontinues in 2035.

Restricted Time:

$1,000 Rebates For Army Personnel

The federal photo voltaic tax credit score gives essentially the most profit total, however there are additionally some state photo voltaic incentives in Florida that it’s best to take into account. The statewide incentives aren’t fairly as interesting as in different states, however they’ll nonetheless prevent some huge cash. Extra importantly, they assist you to keep away from some potential downsides of going photo voltaic.

• Gross sales tax exemption
• Property tax exemption
• PACE financing
• SELF financing program

My Take: Gross sales tax exemptions are widespread incentives, however I really like them as a result of they prevent cash up entrance with no additional work required.

Florida’s photo voltaic and CHP gross sales tax exemptions waive all gross sales tax on photo voltaic tools, together with panels, inverters, wiring, racking programs, conduit, and photo voltaic batteries. The financial savings you’ll see from this tax exemption will differ primarily based on the place you reside, however with a mean gross sales tax of seven.02% in Florida, the everyday financial savings will probably be $2,042, given the common photo voltaic array price within the state.

The gross sales tax exemption is very nice for 2 causes. First, in contrast to a rebate or tax exemption, it gives these financial savings up entrance. Second, you don’t should do something to use for it. All photo voltaic tools doesn’t get taxed. Whenever you buy panels, you’ll routinely see these financial savings mirrored in your pricing.

Florida initiated the photo voltaic gross sales tax exemption in 1997 and set an expiration date of 2002. However it prolonged the exemption for 3 years, by way of 2005, when it made the exemption everlasting.

As I discussed above, top-of-the-line components concerning the gross sales tax exemption is that you simply don’t should file for it. Your tools gained’t embody gross sales tax once you purchase it.

My Take: Property tax exemptions for photo voltaic are additionally widespread all through the U.S., however that doesn’t imply they’re not worthwhile. I like to see states providing this as a result of it requires no work to file for it, and it may possibly save hundreds over the lifetime of your panels.

The property tax abatement for photo voltaic tools in Florida prevents your property taxes from rising after photo voltaic set up. Usually, any vital dwelling enchancment that bumps your private home’s worth would additionally trigger your taxes to go up. As a result of a photo voltaic conversion ought to add appreciable worth to your private home, it could usually result in larger property taxes.

Fortunately, the property tax exemption prevents this from occurring, eliminating one of many solely main downsides to changing to scrub vitality.

It’s robust to pin down what this perk will prevent over time as a result of completely different municipalities use various tax charges, and your photo voltaic array will regularly decline in worth. If we take the common system price and tax price and assume it retains its worth for a minimum of 25 years, you’re taking a look at tax financial savings of round $232 per yr. Over 25 years, that equates to financial savings of $5,800.

The property tax abatement in Florida was initially supplied in 2013, a lot later than most different states adopted comparable laws. The exemption expires on the finish of 2037.

Very similar to the gross sales tax exemption, the property tax abatement is computerized and doesn’t require any work in your half to benefit from. When your tax assessor calculates your property taxes, they’ll merely ignore any worth added by your photo voltaic array. The dearth of utility and utility charges for this perk makes it much more precious, in my view.

My Take: The SELF financing program is an effective way for the state to offer accessible financing to photo voltaic clients. It retains rates of interest and mortgage phrases low to assist make funding photo voltaic extra inexpensive.

Florida’s Photo voltaic and Power Mortgage Fund is funded by a small cost on every resident’s electrical invoice. The fund gives inexpensive loans for potential photo voltaic clients. It caps the rate of interest for the loans between 8% and 9.5%, and it mandates that the mortgage time period be between 5 and 10 years.

Photo voltaic is pricey regardless of the place you reside, however going photo voltaic is about 25% costlier in Florida than in most different states. Most Floridians flip to financing. Nonetheless, personal photo voltaic loans have larger rates of interest and longer mortgage phrases, which enhance the price of financing — and the ultimate value you pay to your Florida photo voltaic panel system.

This fund is an effective way for Florida to offer accessible and inexpensive financing for as much as $50,000 per renewable vitality venture, which ought to be greater than sufficient to cowl the price of photo voltaic panels within the space.

Florida created the Photo voltaic and Power Mortgage Fund in 2011 after a federal grant kickstarted this system in St. Lucie County the yr earlier than. It has been out there ever since with no modifications to the phrases. It has no expiration date however may finish if funds run out or if the state discontinues electrical invoice expenses that maintain the fund alive.

My Take: PACE financing makes photo voltaic extra accessible to low-income households. This system has some downsides, although, so I’d suggest securing financing elsewhere except you haven’t any different choices.

Property-assessed clear vitality (PACE) financing is a standard photo voltaic incentive program nationwide. It allows you to set up photo voltaic for no cash down, making the up-front prices universally inexpensive, after which provides the month-to-month fee to your system to your property’s tax invoice.

Normally, your program administrator will arrange the rate of interest and mortgage time period in order that your complete month-to-month fee will probably be decrease, along with your system decreasing or eliminating your vitality invoice.

PACE financing is simply out there for low-income residents, as outlined by particular person municipalities that help this system.

There are a number of downsides to this program. First, your month-to-month funds get added to your tax invoice, which suggests promoting your private home could be troublesome if the customer doesn’t need to assume these funds or if their lender doesn’t need to lend with the lien in your property. Second, in the event you can’t make funds on time, you may lose your private home. A private mortgage could be tougher to safe, however your private home isn’t used as collateral for the mortgage like it’s with PACE financing.

Florida closed its first loans by way of the PACE financing program in 2011. Since then, a number of municipalities have come on board and authorised native PACE applications. There’s presently no scheduled finish date for this system.

There aren’t any tax exemptions or grant applications supplied on the native degree in Florida. However a handful of rebates, allowing legal guidelines and native financing applications make going photo voltaic in sure municipalities barely extra inexpensive and extra accessible. Here’s a breakdown of the extra interesting native photo voltaic incentives in Florida:

• Orlando Utilities Fee (OUC) Photo voltaic Thermal Rebate Program: Gives a rebate of as much as $900 for every photo voltaic array put in inside Orlando. Eligibility depends upon your contractor, location, and system prices.
• Boynton Seaside Power Edge Rebate Program: Gives a photo voltaic rebate of as much as $1,500 per photo voltaic array and photo voltaic storage system for residents of Boynton Seaside.
• Miami-Dade County Photo voltaic System Allowing: This perk gives details about how the photo voltaic allowing course of works within the county. It permits for expedited permits and reduces the allow price.
• Metropolis of Tallahassee Utilities Photo voltaic Loans: It is a low-interest photo voltaic mortgage program with rates of interest capped at a aggressive 5% to cut back ongoing prices of photo voltaic conversion. You possibly can finance as much as $20,000 for as much as 10 years.
• Lakeland Electrical Residential Power Effectivity Mortgage Program: Owners serviced by Lakeland Electrical can finance as much as $5,000 at 0% curiosity. The minimal mortgage quantity is $500.
• Metropolis of Lauderhill Revolving Mortgage Program: Residents in Lauderhill can borrow as much as $2,500 by way of this program to place towards their rooftop photo voltaic system. It’s a short-term mortgage for as much as two years, however the rate of interest is about at 0% to convey down your financing prices.
• Broward County On-line Photo voltaic Allowing: That is one other allowing ordinance that lets you expedite photo voltaic allowing and pay a decrease flat price to your allow for upfront financial savings.

I imagine internet metering is without doubt one of the most helpful photo voltaic incentives in your complete photo voltaic business as a result of it helps offset and even remove utility payments utilizing your photo voltaic array.

Florida internet metering works by monitoring your grid consumption — how a lot electrical energy you pull from the grid — and your vitality exportation — how a lot extra vitality your panels produce and ship to the electrical grid.

With out internet metering, you’d should pay the retail price per kilowatt-hour (kWh) for any vitality you pulled from the grid, like at evening or on cloudy days when your manufacturing drops. With internet metering, you earn credit for every extra kWh you export to the grid and may then use these credit when your manufacturing dips to offset your consumption.

For a normal clarification of how internet metering works, try the video beneath:

Florida has top-of-the-line internet metering applications within the nation. The Public Utilities Fee (PUC) mandates all extra vitality be credited on the full retail price — that means each kWh you export can offset a full kWh of imported vitality — and any unused credit on the finish of the yr will get paid again to you.

The payout price is the avoided-cost price, beneath the retail price, however that is nonetheless helpful. The precise price will rely in your utility firm, however the coverage applies to clients of all investor-owned utilities, together with Duke Power, Florida Energy & Gentle (FPL), Tampa Electrical Firm (TEC), and Gulf Energy. Electrical cooperatives aren’t required to supply this system, however some have eligibility.

Offered you put in an appropriately sized photo voltaic array, Florida’s internet metering coverage means you may typically remove your electrical payments and even flip a revenue in the event you over-produce sufficient.

It’s laborious to estimate how a lot internet metering can prevent over the lifetime of your panels as a result of there are numerous elements to think about, like your native electrical energy costs, the scale of your system, your month-to-month consumption, and extra. Nevertheless, internet metering helps the common photo voltaic buyer in Florida repay their solar energy system in simply 12 years after which save an extra $21,632, on common, after that time. Your system could save considerably extra, even sufficient to cowl different utility payments.

Restricted Time:

$1,000 Rebates For Army Personnel

Given the prevalence of photo voltaic installations in Florida, it’s not shocking to uncover photo voltaic scams. Since incentives are extremely helpful for photo voltaic clients, some much less respected firms use them as a method of bilking Florida residents of their monetary photo voltaic advantages.

First up is a misrepresentation of how the federal tax credit score works. I’ve seen numerous firms in Florida — together with Photo voltaic Power In the present day — both misinterpreting this perk or outrightly deceptive clients by offering false data.

Normally, the photo voltaic consultant will inform clients that this can be a photo voltaic rebate and that the financial savings are assured. Do not forget that this can be a tax credit score, and except you owe greater than the credit score quantity in revenue taxes over the subsequent 5 years, you gained’t have the ability to take the complete incentive.

I’ve additionally heard about scammers mendacity about photo voltaic rebates or incentives that don’t exist. Usually, they are saying there’s a small utility payment, and when you pay it, they cease responding and by no means present any incentive. You possibly can at all times refer again to this text for steering about out there perks. Additionally: conduct your individual analysis earlier than signing something.

Deceptive advertising and high-pressure gross sales ways are different points to look out for. Rip-off firms generally misrepresent your photo voltaic financial savings and set up prices to get you to signal. Some will pitch photo voltaic leases or energy buy agreements (PPAs) as being superior choices to paying in money or with a mortgage, however these fee choices are objectively much less helpful to the big majority of shoppers.

One photo voltaic firm, Vivint, discovered bother and confronted class motion lawsuits for this final level in Florida a number of years in the past, and different firms have achieved comparable issues and confronted authorized motion.

Photovoltaic (PV) tools in Florida is cheaper on a per-watt foundation than in most states. However photo voltaic vitality programs are extra expensive due to the system dimension required to offset vitality consumption in lots of areas. Fortunately, the photo voltaic incentives out there in Florida make going photo voltaic extra accessible and helpful. With federal, state, and native incentives, you may cut back your up-front set up prices, push up your long-term financial savings, and safe inexpensive financing to your renewable vitality system.

Whenever you’re able to benefit from the Florida photo voltaic incentives I’ve talked about, use the instrument beneath to search out licensed installers who can assist you maximize your financial savings from photo voltaic incentives.

I get numerous questions from Floridians about photo voltaic rebate applications and incentives, particularly given the recognition of fresh vitality programs within the space. I’ll reply a few of the questions I see most continuously beneath.