Gainesville residents who want to take advantage of the Sunshine State with home solar arrays may encounter stormy weather, according to local solar companies.  

The Gainesville Regional Utilities (GRU) Authority voted Wednesday to change its net metering policy. In a 3-0 vote, the Authority decided to lower the rate GRU pays for electricity entering the grid from home solar arrays. 

GRU said the change keeps net metering, just changing the rate. But Barry Jacobson, co-owner of Solar Impact, said the utility’s new policy is no longer net metering. He said Florida Statutes require net metering to be at the full retail rate—otherwise it’s not net metering but dual billing, he said. 

Jacobson and GRU also disagree on the impact the change will have on the home solar sector in Gainesville. Jacobson, and other solar employees at Wednesday’s meeting, said the rate change could put businesses out of business—pointing to impacts in the Jacksonville market that implemented the change in 2018.  

The actual resolution passed on Wednesday only impacts new solar arrays. So, anyone who sent their letter of intent to build solar prior to April 18 will still get full residential net metering.  

Full residential net metering means GRU charges the same rate for energy provided to a home that it pays for the energy pushed from the home solar array and to the grid. So, if a home buys 10 kilowatt-hours of electricity and also pushes 10 kilowatt-hours of excess energy to the grid, the cost cancels out.  

The cost to the homeowner or GRU is charged based on the net of the energy flowing back and forth from the grid to the home and from the home to the grid.  

But, GRU said the energy it provides to homes has more value than the energy provided by home solar. Plus, GRU can often buy wholesale electricity throughout the year cheaper than it must pay home solar owners through full retail net metering.  

Because of that difference in value, GRU proposed paying for excess energy from home solar at the fuel adjustment rate. That rate can fluctuate throughout the year, largely based on natural gas prices, and currently sits at $0.035. The tier 1 residential rate of $0.0846 started on Oct. 1, 2023, and doesn’t include the customer charge or fuel adjustment included in bills. 

Jacobson estimates that the rate change will cause new solar to get 30% less benefit than under the old rate. With a lower rate, future solar owners will pay more in their electricity bills than currently, and Jacobson said that will discourage people from purchasing solar arrays.  

He said Thursday was a tough day after the GRU Authority voted on the change, with employees wondering about impacts to jobs. 

“We’re figuring all this out, and honestly, we’ve already seen the sales market slowing down because rumors were out that GRU was considering [the change]. So, we’ve seen sales leads nosedive already,” Jacobson said. 

Jacobson served as chair of GRU’s Utility Advisory Board, made up of citizens with utility expertise, for years before a state law gave management of the utility to the Authority. He’s used to knowing what GRU is planning and hearing multiple discussions on topics.  

But, the net metering discussion and decision came rapidly, he said. Jacobson found out about the item on Friday by checking the meeting agenda. Five days later, the vote was taken, and citizen comment was limited to one minute per person instead of the usual three minutes.  

Jacobson said he was a little offended that no one at GRU discussed the matter with the solar community beforehand. 

“There were things I thought that [GRU] really missed, and so, by not having the discussion, it was just sprung on us,” Jacobson said. 

Tony Cunningham, general manager of GRU, said the utility is trying to solve a problem before it gets large. He said the rapid increase in solar uptake caused the utility to act, though GRU has looked at the net metering policy for years. 

“If you look back at the history from the early 2000s, there’s been different iterations of how we’ve approached this,” Cunningham said. “For the last 20 years, we’ve been looking at different ways and the most effective way to do net metering or to look at solar generation as folk’s homes.” 

Cunningham said the fuel adjustment rate more closely reflects the value of the energy being provided by solar arrays, closer to the wholesale price.  

“This policy is still encouraging it,” Cunningham said in an interview. “So if a homeowner builds it, any power they generate, it’ll offset directly what they’re using.”  

GRU has many costs to produce and deliver power for around 100,000 customers, using the retail rate to cover the expenses. Home solar arrays lack those same costs to produce its power. Home solar customers can use the electrical grid as a battery without paying for the use, dumping excess energy when needed and then drawing the same amount of energy later for no cost.     

GRU Authority Chair Craig Carter said the utility isn’t against solar. 

“The utility has an expense with [net metering]. I am all for solar. I’m just not for the way we’re paying it,” Carter said at the meeting. 

Jamie Verschage, GRU’s interim director of planning, said new solar applications have jumped, from 165 in 2022 to 424 in 2023. Already in 2024, he said the utility has seen an estimated 30% increase.   

Verschage said that customers without solar must subsidize solar owners at around $500,000 per year. He said the savings from the rate change, which only impact new solar, will be around $130,000 in the first year. Those savings will increase as more homes install solar under the new contract.  

Jacobson noted that when a home with solar is sold, GRU will likely require the new contracts and rates as well.  

He said GRU’s position makes sense from just a financial perspective, discounting environmental impacts. But he said Gainesville’s solar market is too small at the moment to disrupt GRU and make a large fiscal impact. He said the $130,000 in annual savings amounts to a rounding error compared with GRU’s budget. 

“If you get up to 10% penetration, then we can have an intelligent discussion about the need to do this, but we’re, I believe, at 1% or 2%—something quite small,” Jacobson said. 

Jacobson said GRU could face the same legal issues as Jacksonville Electric Authority (JEA). While early lawsuits were dismissed, a recent lawsuit over JEA’s net metering change is scheduled for oral arguments this summer.  

GRU said that investor-owned utilities are required to pay net metering at the full retail price but municipally-owned utilities don’t have the same restrictions.  

Again, Jacobson and solar companies disagree. He said state statures don’t distinguish between the types of utilities. The difference is that investor-owned utilities can’t change their rate without approval by the governor-appointed Public Services Commission.  

“The Public Service Commission for over the last 15 years has said, ‘No, this is exactly what net metering is, and we won’t let you redefine it,’” Jacobson said. 

Jacobson said GRU and JEA are redefining the term, claiming that a new billing system is still net metering. Jacobson said lawsuits coming from the GRU decision could take a while, just like in Jacksonville, coming years after the change.