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Time to switch to Home Solar Panels – Florida Electricity Rates expected to rise for the next 4 years

Now is the best time to invest in home solar panels because your electricity bill is about to increase, and you still have the opportunity to use the federal tax credit for solar. On October 26, Florida Power & Light or FPL announced that the Florida Public Service Commission has approved of FPL’s four-year rate settlement agreement. The purpose of this agreement is to increase electricity rates for a short period of time in order to achieve long-term reduction rates. This means starting in 2022, homeowners will see an increase in their electricity bill, and Northwest Florida homeowners, who are under Gulf Power are expected to see a bigger increase. 

Florida Power & Light’s 4 year plan for Electricity

According to FPL, here are the general rates that Northwest Florida homeowners will see if they were given the standard 1,000-kWh monthly residential bill:

FPL Northwest Florida Bill
Source: FPL

While these are the rates for the rest of Florida homeowners under FPL that fall under the standard 1,000-kWh monthly residential bill:

FPL Bill
Source: FPL

These bills do not account for any additional charges or taxes. 

Obviously from these bills, for a Florida homeowner outside the Northwest, this is a steady increase, whereas a Northwest Florida homeowner is an instant increase and then decreases to match the rest of Florida’s rates. Despite the increased rate that Northwest Florida homeowners will have to pay, these rates are still considered below the national average. 

Reasons for increase in electricity rates

FPL states that the reasoning behind increasing electricity rates is to support renewable resources in Florida. Specifically, the “30-by-30” plan supports the installation of solar panels so Florida will have 30 million solar panels by 2030. As well as supporting the development of the latest grid technology. On the surface, FPL’s decision to propose this agreement to the Florida PSC may seem to have an emphasis on a push for homeowners to switch to home solar panels or renewable energy in general, when in reality, there are other factors that might have influenced FPL’s decision to create this agreement.

On October 13, the Energy Information Administration or EIA released an article that details the increased cost of electricity in the winter of 2022. This is due to the increased demand for fuel with very little supply satisfying the demand since the fuel industry is still in economic recovery after the COVID-19 pandemic. With the main source of electricity in the US still being generated through natural gas, it is expected that electricity bills will increase throughout the entire nation. Therefore, even outside of Florida, the switch to home solar panels and more renewable energy sounds dire than ever before, especially in the northern states with the highest electricity cost.

Another reason behind the 4-year agreement is the fact that Florida is the 2nd largest electricity producer in the United States, yet natural gas makes up for 74% of Florida’s electricity in 2019. Being one of the top states for tourism, Florida is also one of the highest states for gasoline and jet fuel consumption. So the impact of the demand for fuel would affect Florida in other industries outside of electricity. The more Florida can rely on renewable energy, like home solar panels, the less Florida will have to worry about consuming more natural gas.

Conclusion

To summarize, FPL will enforce the 4-year rate in 2022, and homeowners in Northwest Florida will have to pay more for their electrical bills. FPL plans to use this 4-year rate as a short term to save more on electricity and support renewable energy long term. The increase in electricity isn’t only affecting Florida, but across the United States. In any event, you are concerned about the upcoming increase rates of your electrical bill and have been considering switching to solar energy, like solar panels. Feel free to contact us or fill out our quote form, if you are interested in home solar panels or solar energy in general. 

Sources:

PSC unanimously approves FPL’s four-year rate settlement agreement, keeping bills low and accelerating U.S.’s largest solar buildout

EIA expects U.S. households to spend more on energy this winter

EIA Florida Energy Facts

Thank you for taking the time to read our article. If you would like more information on obtaining home solar panels, or solar panels for business, or recreational vehicles. Contact us today!

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