Are Solar Panels Worth It in Florida? Understanding Cost and Savings

Are you considering making the switch to solar power and wondering, "Are solar panels worth it in Florida?" With the Sunshine State's abundant sunlight, it might seem like a no-brainer to harness the power of the sun.

But since installing solar panels is a big investment, it's crucial to weigh the costs, incentives, and the potential return on investment (ROI) carefully. Let's take a closer look at the numbers and see if harnessing all that sunshine truly pays off for your Florida home.

Is Florida Good for Solar Energy?

The answer is often a resounding yes. Florida, often called the "Sunshine State," lives up to its name when it comes to solar energy potential. With an average of 237 sunny days per year, it's one of the best states for harnessing solar power. This abundance of sunshine means solar panels in Florida can generate more electricity compared to many other states, making it a highly favorable location for solar energy systems.

Beyond the sheer number of sunny days, Florida's relatively high electricity bills add to the case for solar. On average, a Florida household spends about $154.32 a month on electricity in 2024, according to the U.S. Energy Information Administration (EIA). That's over 4% higher than the national average of $147.53. By investing in a solar panel system, you can significantly cut down or even eliminate your monthly utility bills completely.

That said, a well-sized solar system costs at least $10,000, which can be too expensive for many homeowners. Plus, there are other things to consider, like the amount of rooftop space, the direction your roof faces, and any shading. Let's delve deeper into the prices and factors below!

How Much Do Solar Panels Cost in Florida?

On average, the price for a residential solar panel system in Florida ranges between $2.50 to $3.00 per watt. For a typical 6-kilowatt (kW) system, this means you can expect to pay between $15,000 and $18,000 before any incentives or rebates are applied.

But the actual cost largely depends on how much electricity you use and what your home needs. An average Florida home consumes about 1,111 kWh of electricity each month, according to the EIA. That's about 35 kWh per day.

With Florida averaging between 5 to 6 peak sun hours a day, a 6 to 7kW system is generally enough to offset a significant chunk of your energy bill. However, depending on your specific needs, you may require a smaller or larger system.

With utility bills soaring from running the air conditioner during those scorching summer months, many homeowners opt for a 10kW system or larger. Here's a quick look at solar panel system sizes and their estimated costs you can expect:

What Are the Financial Incentives and Rebates for Solar Panels in Florida?

While these upfront costs may seem high, there's a variety of financial incentives and rebates available in Florida to make it much more affordable. Here's a breakdown of the key programs that can benefit you as a Florida homeowner:

Federal Solar Tax Credit (ITC)

First and foremost, the federal government offers a substantial incentive through the Residential Clean Energy Credit, formerly known as the Solar Investment Tax Credit (ITC). This credit allows you to deduct 30% of the total cost of your solar panel system from your federal taxes.

For example, if your system costs $18,000, the ITC can save you $5,400, bringing the cost down to $12,600. You can apply for this credit by filling out Form 5695 when you file your taxes. If your tax liability isn't high enough to use the full credit in a single year, you can roll over any unused portion to future tax years until 2034, when the credit is scheduled to expire.

Here's the costs of solar panel systems after applying the 30% ITC:

Property Tax Exemption

Installing solar panels adds value to your home, but in Florida, you won't have to worry about higher property taxes.

Thanks to Florida's Property Tax Exclusion for Residential Renewable Energy Property, any increase in your home's value from a solar installation is exempt from property taxes. This means you can increase your home's worth without being penalized on your tax bill.

Sales Tax Exemption

Florida also gives you a break on sales tax for solar energy systems, with a full 100% exemption. Considering Florida's now 6% sales tax, that's a serious savings! Take an $18,000 solar system, for instance. You'd skip out on paying $1,080 in sales tax. Not many states offer both sales and property tax exemptions, so Floridians really hit the jackpot!

Net Metering

The net metering policy is another big reason why solar panels are worth it in Florida. With net metering, any excess electricity your solar system generates is sent back to the grid, and you receive credits on your electricity bill.

Under Florida's state law, utilities must credit customers for any excess energy their solar system produces at full retail value. This means that every kWh of power your system sends back to the grid is credited as exactly 1 kWh off your electricity bill. Not many states offer this 1:1 trade-off.

So, during times when your solar panels aren't producing enough power (like at night or cloudy days), you can use these credits to offset the cost of pulling energy from the grid. Essentially, net metering ensures that none of your solar energy goes to waste.

Solar Loans in Florida

If you need help financing your solar system, Florida offers the PACE loan program, which lets you pay for the installation through your annual property taxes. There are also other loan programs available, including low-interest loans for low-income families.

How Much Can You Save with Solar Panels in Florida?

As we've explored, with Florida's abundant sunshine, high electricity usage, and a range of favorable incentives, installing solar panels can lead to substantial reductions in your monthly energy bills. But just how much can you expect to save?

Depending on the size of your solar panel system and your energy needs, you could offset a large portion — or even all — of your electricity bill. For example, a 6 to 7 kW solar system can generate around 30 to 40 kWh per day, which could cover most of your daily energy use.

According to EIA's report by June 2024, the average electricity rate in Florida is currently about $0.14 per kWh. So, reducing your monthly usage by 900 kWh could save you about $126 each month. Over a year, this adds up to roughly $1,500 in savings — and over the 25-year lifespan of your solar panels, that could total over $37,500 in reduced energy costs.

Here's a simple overview:

But the savings don't stop there. Thanks to Florida's excellent net metering policy, you can also earn credits for any excess energy your system generates and sends back to the grid. These credits can be applied to future bills, meaning you can save even more, especially during months when your system produces more energy than you consume.

Additionally, with utility rates expected to rise in the coming years, the savings from solar are only likely to increase over time. By locking in a fixed cost for your energy with solar, you'll avoid the impact of rising electricity prices, providing even more long-term financial benefits.

Evaluating ROI: Are Solar Panels Really Worth It?

With these costs and potential savings in mind, let's look at the return on investment (ROI) to truly answer the query, "Are solar panels in Florida worth it?"

As we've seen, the initial cost of solar panels in Florida can range anywhere from around $8,750 to $25,200 after the 30% federal tax credit is applied, depending on the size of the system. But the real question is how quickly these costs can be recouped through savings on your electricity bills.

With Florida's high levels of sunshine and average electricity rates of around $0.14 per kWh, you can see substantial savings each month. These savings quickly add up. For example, a 7kW system can generate between $147 and $168 in savings each month, which amounts to around $1,764 to $2,016 per year.

Over 25 years, this totals to around $44,100 to $50,400 in energy savings, far surpassing the initial investment. This means that for most Florida homeowners, the payback period for solar panels is typically between 6 to 12 years, after which the energy savings are essentially pure profit.

Here's a more detailed look:

When you factor in the long-term savings, property value increase, energy independence, and environmental benefits, the ROI of solar panels in Florida is highly favorable. For many homeowners, the initial investment pays off within just 5 years, and the continued savings make solar panels a sound financial and environmental choice. 

Even if you have limited roof space, solar panels can still be a great option for your Florida home. With advancements in solar technology, high-efficiency panels, like the Anker 405W Rigid Solar Panel, are designed to maximize energy production, even in smaller spaces.

These panels have an impressive efficiency rate of around 23%, meaning they can convert more sunlight into electricity compared to standard panels. So, even if you don't have a large roof, you can still generate a significant amount of power. 

Ultimately, are solar panels really worth it in Florida? Absolutely — the numbers, along with Florida's solar-friendly policies, make a compelling case for going solar.

Conclusion

So, are solar panels worth it in Florida? With the state's abundant sunshine and favorable net metering policies, the answer is often a resounding "yes." While the upfront cost may seem steep, the combination of tax credits and energy savings over time makes solar a sound investment for most Florida homeowners. A well-chosen solar system can start paying off in just 5 years and keep saving you money for decades. Plus, over 195,000 Florida homes are already using solar, so, it's clear that this is a smart move.

FAQs

Do you need a permit for solar panels in Florida?

Yes, you generally need a solar permit to install a PV system in Florida. The permitting process ensures that your solar installation meets local building and electrical codes, safety standards, and zoning regulations.

How much does it cost to install solar panels in Florida?

In Florida, installing solar panels typically costs between $10,500 to $17,500, after applying the 30% federal solar tax credit (ITC). On average, the cost per watt ranges from $2.50 to $3.00, which is slightly lower than the national average. The final cost depends on the size of the system, the type of panels you choose, and your energy needs.

Do solar panels increase home value in Florida?

Yes, solar panels can increase home value in Florida. Homes with solar panels are often more attractive to buyers because they can lower energy costs and offer long-term savings. Plus, in Florida, the added value from solar panels doesn't increase your property taxes thanks to the state's property tax exemption for renewable energy systems. So, installing solar panels not only helps you save on electricity bills but can also make your home more valuable.