Florida Power & Light, the largest electric utility in Florida, announced in a press release that they had saved about $375 million in fuel costs in 2022 by investing in solar. In the same March press release, they explained that they were filing a plan to reduce customer charges by $379 million. In June, the Public Service Commission approved another FPL request to decrease charges by another $256 million, reflecting continued decreases in natural gas costs.
These reductions do not nearly make up for the historic rate increases FPL asked for at the beginning of this year and in 2022. In January 2023, the electricity giant submitted a plan to increase customer bills to recover $1.3 billion in costs related to Hurricanes Ian and Nicole, and $2.1 billion to make up for higher-than-projected natural gas costs in 2022.
So, while some of the rate reductions come from natural gas price volatility, most of these reductions come from FPL moving away from natural gas toward solar. In May of 2023, FPL launched two new solar energy centers in Northwest Florida, capable of generating enough energy to power approximately 60,000 homes. This comes on the heels of launching 10 solar centers in February and another three in March. The utility now has more than 60 solar energy centers in operation around the state of Florida.
This rapid expansion of solar could pay dividends to customers in the coming years. In the meantime, the majority of FPL’s energy source is natural gas, as it has been for at least two decades. According to documents the utility filed with state regulators, natural gas as a fuel source grew from 34.8% in 2003 to 72.6% in 2021.
In 2022, FPL announced plans to install 30 million solar panels by 2030 and to eliminate all its indirect and direct carbon emissions by 2045, partly by growing FPL’s solar fleet to 90,000 MW (Megawatts) and its energy storage capacity to 50,000 MW.
What will this mean for customer costs? Assuming savings are passed on to customers, it could mean significant savings. According to a presentation to investors, NextEra, the parent company of FPL, estimates:
- Solar energy with storage could cost $30 to $37 per unit (MWh or “Megawatt Hour”) by the late 2020s.
- Electricity from existing natural gas plants could cost $35 to $47 per unit by the late 2020s.
- New natural gas plants would be even more expensive, costing $56 to $69 per unit by the late 2020s.
In other words, FPL’s parent company estimates that natural gas will be anywhere from 16% to 86% more expensive than solar by the late 2020s. It will be up to decision-makers at the company and regulators at the Florida Public Service Commission to determine how much of that savings get passed along to customers.