April 2006

Message from the Director

Dr. James Fenton
Dr. James Fenton

It’s time to start leveraging the federal tax credits with Florida incentives!

In January, I gave a presentation in Tallahassee to the Florida Senate Committee on Communications and Public Utilities – the state’s “energy committee”  -- in which I suggested ways that Florida could leverage the new federal tax credits for renewable energy and energy efficiency to dramatically change our electric energy use.

At the Florida Solar Energy Center, we have been thinking about energy independence for Florida for the past 30 years.  We must stop the loss of our money we now spend on fuels imported from outside the state and bring about significant economic development in Florida.  At a time when we have new federal tax credits, our state must take action now if we are going to be able to keep the citizens of Florida’s dollars at home.

Today, more than 98 percent of the fuel used in the state for transportation and electricity generation comes from outside our borders, resulting in exports of an estimated $20 billion to support our fuel needs.  If we could produce more fuel in the state or generate electricity with free Florida sunshine, much of that money could stay right here in Florida, where economists tell us that every dollar we keep will actually be worth two to three dollars in economic activity.

There’s really only one way to accomplish this, and that’s for the state to set strong policies to reduce our energy use and to promote renewable energy generation.  An FSEC study earlier this year using typical homes in various parts of the state and then projecting the results to statewide savings showed that state rebates, combined with the existing federal tax credits, could give consumers electrical energy savings exceeding 40 percent of total home energy use in all three of our climate zones.  Over a ten-year period, we’re talking about consumer cost savings of nearly $2.5 billion, 126,000 new jobs in Florida, more than $1.2 billion in fuel not purchased from outside of the state, and a savings of more than 26 million tons of CO2.

The time to start leveraging the federal tax credits with Florida incentives is now, because the longer we wait, the more money we ship out of the state markets.  Right now, 32 other states have financial incentives in place that make renewable energy systems lower in cost than they are in our state.  In many of these states, the cost to the consumer for a more efficient home, solar water heating and some photovoltaic electricity generation is less than what they’d pay for electricity out of the wall.  There’s no doubt that the markets and the jobs for renewable energy and energy efficiency will end up in those states if we don’t do something here and do it now.

I urge Florida’s Legislature to enact financial incentives – incentives that will be performance-based to ensure that we get the most cost-effective systems – to work in conjunction with federal incentives to keep our money and our jobs in Florida.  We suggest rebates of $0.60 per kWh for new homes for building energy efficiency and appliance energy use as compared to current federal minimum standards, and the same size rebates for annual savings from solar hot water systems as compared with electric water heating.  We also recommend a rebate of $3.50 per peak watt for electricity produced from photovoltaic systems.

Visit our website at http://www.fsec.ucf.edu/en/news/press/enews/2006/2006-02_Energy-use-2014.htm for more information on my presentation and a copy of the slides used, as well as the report “Potential of Energy Efficiency and Renewable Energy Savings To Impact Florida’s Projected Energy Use in 2014” prepared by Philip Fairey earlier this year.

We can keep talking about this problem and watch our money, the markets and jobs go elsewhere, or our state can enact consumer incentives to keep our money in Florida.  This “no-brainer” is a win-win for Florida.

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