Stu Dalheim: A cloud over solar investments

For years, Florida's electric power utilities have operated as regulated monopolies, giving power consumers little choice over where they get their electricity. When it comes to electric power, the state's utilities are the only game in town. That is one of the key reasons why Florida is one of the sunniest states in the nation, but fails to rank among the top 10 states for installed solar power capacity.

As an investor, I see solar energy as a wide-open business, investment and job-creation opportunity, and it's time for Florida to take advantage. Residents are clamoring for a chance to take advantage of this abundant resource and save on their energy costs.

However, the state is currently taking a pass on the opportunity. A case in point: Recently, the state's utility regulator approved a voluntary program under which individuals can support small solar projects built by Florida Power and Light through a $9 donation on their monthly bill. Equating solar investment with charity is missing the boat by a mile. There's much more that Florida's energy regulators could do to address the actual problems preventing greater solar adoption in the state.

In many states, a company or homeowner who wants to install solar panels can enter into a third-party power purchase agreement (PPA) with a solar energy company. These agreements allow companies that specialize in solar energy to finance the solar array and then sell the electricity directly back to the customer. PPAs enable homeowners and businesses to get the power they want at a lower or long-term fixed cost. Such private power arrangements, however, are competition for utilities.

Under Florida law, there is no competition for electricity. Only state-regulated utilities can sell power to electricity consumers and, as a result, PPAs are currently not permitted in the state. Legislators and regulators should work to remove this barrier to free enterprise for a number of reasons. One of the most compelling reasons is that American companies are already demanding more renewable energy and backing their demands with significant investment.

America's largest businesses realize that using solar is a smart business decision and not mere charity. Tech companies such as Google and Facebook are already choosing new sites for data centers in part based on access to clean energy. Meanwhile, many more companies have set clean energy goals, including firms such as Office Depot and American Express. A new report by Calvert Investments and our partners showed that 60 percent of Fortune 100 companies have a clean energy goal. These companies are saving over $1 billion in energy costs annually and are realizing pollution reductions equivalent to shutting down 15 coal plants.

To realize the benefits of clean energy, these companies need a competitive electricity market. In our research, we have discovered that the presence of up-to-date competitive energy policies — like the ability to enter into PPAs — is key to determining where corporate renewable energy projects are being developed. As a result, companies such as Costco, Kohls and WalMart are putting solar on their roofs around the country, and bypassing states like Florida.

While Florida's energy policy may be standing still, American companies and the solar industry aren't. In just the past five years, solar panel costs have come down over 50 percent.

As costs continue to fall, Florida's missed opportunity will only grow.

This is a loss for the state, which already has more than 360 registered solar companies and about 4,000 residents employed by the industry. Luckily for these employees and the state's electricity consumers, the opportunity hasn't passed yet.

Stu Dalheim is vice president, shareholder advocacy at Calvert Investments Inc. in Bethesda, Md. Calvert Investments is a member of the Investor Network on Climate Risk. Contact him at Stu.Dalheim@Calvert.com.

Note: Accounts managed by Calvert Investment Management, Inc. may hold securities issued by companies mentioned above. Calvert is not providing investment advice and is not recommending any action with respect to such companies.