The time has come for Florida to take action
to establish a reliable, long-term funding program
for Renewable Energy and Energy Efficiency!

As the past three years have demonstrated, Florida's current method of funding a renewable energy stimulus program has been severely insufficient. Each year, crucial incentives and pilot projects for an evolving industry must compete with standard government services such as education and law enforcement. A budding industry requires secure, long-term commitments to spur investment and achieve the growth that is urgently needed in renewable energy today. Yet, the funds allocated for this year's solar rebate program were depleted by the previous year's unpaid requests before the fiscal year had even begun. And the coming budget year only promises to be more severe. Therefore, we propose the implementation of a tried-and-true funding method with broad public appeal that would be independent of the state's general fund and capable of the amounts and terms required to meet the imperative of our energy and environmental crises.

What is the Florida Clean Energy Trust Fund proposal?

A charge of one-half mil would be assessed to the kilowatt-hour consumption for each electric utility customer in Florida. This would be approximately 60 cents per month on the average residential electric bill. Larger consumers would pay proportionally more and smaller consumers would pay less. Based on Florida's 2006 total electricity consumption, this would generate $114 million per year. This amount would allow Florida to go well beyond its pilot program of an uncertain $5 million and establish a long-term comprehensive clean energy development program. The initial term of the program would be for 10 years to create stability in market stimulus and allow a greater impact for educational programs.

A remarkable aspect of this plan is that by replacing only one 100-watt light bulb with a CFL, the average residential consumer would save enough money to pay for the new bulb and offset the proposed fee. So basically, Floridians are being asked to conserve energy and then use just a small portion of the savings to fund an important economic stimulus program that will help combat our foreign energy dependence and global climate change.

Read more...

Has this type of program been used before?

Yes. Eighteen other states currently have successful renewable energy and energy efficiency programs funded in this way with total fund amounts ranging from $2 million to $300 million depending on the size of the state. Studies done by the U.S. Environmental Protection Agency, Union of Concerned Scientists, and the Clean Energy States Alliance have all concluded that this public benefit fund method is a preferred tool for states to advance clean energy and energy efficiency. It has received strong public support in the states where it has been established. Furthermore, in a 2008 public opinion poll, 81% of Floridians said they were willing to pay up to a dollar a month to support this type of program.

Read more...

What are the objectives that the Clean Energy Fund would seek to achieve?

There are four principal goals the fund would be directed toward:

- To educate Floridians on the importance of energy efficiency and renewable energy with information on readily available and cost-saving solutions

- To provide financial assistance to Floridians for the purchase and long-term financing of renewable energy systems and energy efficiency improvements

- To establish secure, long-term market conditions for investors, manufacturers, and installation contractors for creating Florida jobs, achieving lower installation costs, and raising industry standards

- To provide incentive packages for solar manufacturing companies who establish factories in Florida thereby employing Floridians and eliminating high shipping costs

Read more...

Exactly how would the funds be spent?

Evaluations would be done each year to determine the most effective distribution of the funds. However, a proposal for an initial allocation is as follows:

50% - Financial incentives for residential and commercial installations of qualifying clean, renewable energy
generation systems such as photovoltaic and solar thermal
25% - Low-interest loan program for residential solar installations and energy efficiency improvements
10% - Incentive program for in-state photovoltaic manufacturing
8% - High-profile public awareness and clean energy education program
5% - Administration
2% - Monitoring and evaluation

Under no circumstance would the allocation for financial incentives be allowed to drop below 50% of the total fund, so as to assure market stability and encourage investment. The educational component would be designed to assist current utility demand-side management programs. All program components would be designed to prevent duplication of any existing utility program or redundancy in program billing.

Who would administer the fund?

A department within the Florida Office of Energy and Climate Change would be tasked to administer the fund. An advisory board appointed to represent public interests and industry concerns would oversee the administration. The advisory board appointments would be made to insure broad representation of the public interest.

Read more...

Will there be allowances for low-income residents or large industrial consumers?

Anyone currently receiving low-income government assistance or unemployment benefits would qualify for an exemption from the fee. The educational component would provide assistance to large residential and commercial consumers on how energy efficiency improvements can easily offset the fee amount.

Does this plan conflict with other current proposals to develop renewable energy and energy efficiency?

No. With careful design of the fund's components and parameters, it can actually enhance utility demand-side programs with a state-wide public awareness program and complement utility-scale RPS incentives with support for a stronger residential and small-commercial market. The fund administration would also have the ability to transition to performance-based incentives and assist municipalities with innovative low-cost financing programs.

How can I support this proposal?

Call or write your state representatives today. Urge your organization or company to endorse this campaign. Become a member of FREA and volunteer to help. Be sure you are signed up to receive our monthly news digest, SunState News, and action alerts.

Additional Resources

To learn more about clean energy funds in other states, visit the website for the Clean Energy States Alliance or download this pamphlet from the U.S. Environmental Protection Agency.

The Fund’s Source

The most recent statistics available on Florida’s electricity consumption is from the Energy Information Administration’s 2006 report. That year, total consumption for Florida was 228,219,544 megawatt-hours. The Florida Energy Office reported that same year that the average residential consumer uses about 1,150 kilowatt-hours per month. One-half mil applied to each of these amounts results in $114,109,772 and $0.58 respectfully.

(Note of Interest: If Floridians were to become only 5% more efficient with electricity use, this would create an annual savings of $1.4 billion per year and $7 per month on the average residential bill.)

(return to top)

Other State Clean Energy Funds

For a list of other state clean energy funds and links to their websites, click here.

The Clean Energy States Alliance (CESA) is a nonprofit organization comprised of eighteen member states that maintain clean energy funds. Its mission is to promote clean energy projects and markets through the joint efforts of its member states. Click here to visit the website for CESA and learn more.

The U.S. Environmental Protection Agency has published a manual that identifies best practices for state clean energy fund administration. A downloadable copy can be found here: Advancing State Clean Energy Funds.

The Union of Concerned Scientist list public benefit funds as one of the most powerful ways to enable our transition to renewable energy. Click here to learn more.

(return to top)

Important Objectives

There have been several lessons learned over the course of the current Florida solar rebate program. This proposal is designed to build upon that knowledge and incorporate basic principles missing in the current incentive program:

Public Education - Despite overwhelming support for renewable energy such as solar power, the average consumer remains uninformed regarding details of the cost savings, reliability, and ease of installation. The same is largely true for energy efficiency. A well-funded, public education campaign must be part of any transition to a clean energy economy.

Effective Financial Incentives – Study after study shows that a well-designed financial stimulus program is necessary to create the demand that will build an industry bringing jobs, manufacturing, and lower costs for clean, domestically-produced energy. The cornerstone of the program is growing demand that will spur investment and create additional clean energy production capacity.

Long-term Stability – The funding mechanism for the current Florida Solar Rebate Program is a model of how not to incentivize the growth of an industry. The uncertainty of funding amounts each year has prevented consumers and entrepreneurs from acting on installation and investment plans. A long-term commitment of a significant minimum funding is imperative to achieve the creation of jobs, economy-of-scale production, and lower costs. 

Florida Manufacturing – It goes without saying that Florida should also manufacture the equipment that will convert our natural recourses into energy. Not only does it create jobs and bolster our economy, it eliminates high freight charges and ancillary energy use, ultimately lowering costs. A program to assist Florida-made renewable energy products is therefore vital to jump starting Florida’s green economy.

(return to top)

Fund Administration

A review of other states that maintain clean energy funds yields several different models for an administrative structure. One already exists here in Florida. The Florida Office of Energy and Climate Change has been administering programs that incentivize renewable energy and energy efficiency for several years. The Clean Energy Fund administration would just be a limited expansion of its current duties. To learn more about clean energy fund administrative models, click here.

Upon enacting legislation to establish a clean energy fund, Florida would immediately become a member of CESA. This coalition of states with clean energy funds provides its member states with invaluable assistance in developing the most successful administrative structure and policies based on a vast body of experience. Thanks to the many other states that have enacted similar legislation, and the efforts of CESA, there is a well-paved road to the implementation of a Florida Clean Energy Fund.

(return to top)