With summer upon us, those already-high electricity bills may increase even more. As Southwest Floridians use more energy to cool their homes in the summer months, the price of electricity is likely to increase, purely due to supply and demand.

Appliances such as air conditioners and freezers use a lot more energy, especially in the summer, said Amir Neto, director of the Regional Economic Research Institute at Florida Gulf Coast University. Floridians are used to that summer electricity increase, but due to some global factors, including inflation, that increase will likely be much higher than in previous years.

Comparing February 2021 to February 2022, Florida had about a 15% increase in the average price of electricity to ultimate customers, going from 10.81 to 12.45 cents per kilowatt hour, according to the U.S. Energy Information Administration.

Florida Power and Light customers saw about an 18% increase in their monthly bills from 2021 to 2022. “A typical 1,000 kilowatt-hour residential customer has a monthly bill of $120.67 in 2022; in 2021, that same customer’s bill was $101.70,” FPL Senior Communication Specialist George Bennett says.

Neto said some reasons for the increase in electricity prices isn’t due to a local cause, but a global one that trickles down to the local level. When COVID-19 emerged, it disrupted the production of natural gas, which is used to produce the majority of electricity. That alone increased prices since the supply of natural gas decreased.

With already having a lower supply of natural gas, the Russian invasion of Ukraine only exasperated the situation. Even though the U.S. is mainly supplied with natural gas from within the country and Canada, Russia is still one of the largest producers of natural gas and the crisis in Ukraine created a lot of uncertainty in the energy market on a global scale, Neto said.

Demand also played a large role in increasing prices, Neto said. During lock downs caused by COVID-19, consumers spent a lot of money on big-ticket items, such as appliance upgrades and new cars. And those new gadgets at home use more energy, increasing the demand. That coupled with people still working from home and wanting to spend more time at home in general, is causing an uptick in consumer usage at home.

The Legislature also approved utility companies, including FPL, passing the increased costs of energy to consumers, which is a big reason why Floridians are seeing a bigger difference in their electric bills.

When will we see these high electricity prices start to come down and stabilize? “With time we will see recovery of production of natural gas along with demand,” Neto says. And once we start to see more resolution in Ukraine, the energy market will become less uncertain, he said.

Another way to alleviate the increased prices is to move toward energy suppliers other than natural gas, like solar energy. If the demand for natural gas goes down, prices should decrease as well.

“I can see Southwest Florida being a driver to a more environmentally friendly energy production. The community here really cares about the environment,” Neto says, pointing to having plenty of sunlight to use as power.

Southwest Florida has seen more of a move toward solar power and energy efficient homes. Companies such as Kaye Lifestyle Homes and Kitson & Partners, which owns Babcock Ranch are implementing these environmentally friendly ways to be more energy efficient. 

Kaye Lifestyle Homes, a Naples based family-owned homebuilder company, is expanding with a new high-performance solar home division due to an increase of requests from home buyers for energy efficient, sustainable and durable homes. High-performance building is one of the top energy trends in the residential construction industry today, according to Kaye Lifestyle Homes Operations Manager Ben Kaye.

These homes use less power, and in many cases, their power consumption has decreased 50%.

Joe Maiocco, of Golden Gate Estates, chose to have Kaye Lifestyle Homes construct a high-performance solar home for him and his family. “Living in Florida, the Sunshine State, it’s a no brainer,” Maiocco said.

Within the first two weeks, the Maicoccos noticed a difference in the temperature of their home. They can now keep their home set to a higher temperature with it still feeling cool inside.

Maiocco, a reverend for St. John’s Episcopal Church, has been thinking about solar for a while. With supply-chain issues happening around the country, he not only wanted his home to be more self-sufficient, but he would also like to grow and raise his own food.

There are two facets working together to make these homes as energy efficient as possible. One is the high-performance aspect, and the other is the use of solar panels.

High-performance is what makes the home resilient and last longer, reducing the power needed and improving air quality. Its ventilation systems also help reduce germs, which has become very important in the COVID-19 age, said Stuart Kaye, Kaye Lifestyle Homes president.

Compared to building a traditional home, a high-performance home costs approximately 5% more to build, but the homes qualify for the 45L tax credit, which offers a one-time $2,000 tax credit per dwelling unit.

When solar panels are installed, it costs approximately 4% more to build compared to a traditional home. The solar panels are what reduce electric bills to nearly net-zero, which is the balance between the power a home needs and the renewable energy a homeowner can generate to match the need, and it comes with a 26% tax incentive. The tax credits and incentives that Kaye Lifestyle Homes receive while building these homes are substantial and passed down to the home buyer, Stuart Kaye said.

Babcock Ranch, the first solar-powered town in America, is another example of how Southwest Florida is becoming more energy and environmentally conscious.

In partnership with FPL, Babcock Ranch is home to the FPL Babcock Ranch Solar Energy Center and FPL Babcock Preserve Solar Energy Center. Together the centers can generate 150 megawatts of clean energy with 650,000 solar panels. They also have the largest solar-plus-storage system operating in the U.S., which was created by FPL and ensures a steady supply of power on partly cloudy days and at night.

FPL has 50 solar energy sites around the state and plans to install 30 million solar panels by 2025.

“FPL leads all utilities in the nation with the most universal solar capacity and is currently Florida’s largest generator of solar power,” Bennett says.