Note: Lakeland has begun searching for private investment partnerships in order to expand the program.

Lakeland Electric, a municipal utility in Florida, is the nation's first utility to offer solar-heated domestic hot water on a "pay-for-energy" basis. The utility owns and maintains the solar water heaters they install on participating customers' homes and bills them only for hot water delivered to the faucet. The utility installs revenue-grade energy meters to measure the thermal output of the solar water heating systems. These meters internally convert the thermal energy (Btus) to an electricity equivalent (kWh) for billing purposes. Whereas hundreds of utilities across the U.S. offer their customers a green power option for a premium, the Lakeland program offers a customer-sited solar energy option that reduces the program participant's overall energy costs.

The program serves as an incentive to residential customers to utilize solar energy by:

• eliminating up-front equipment expenditures and maintenance costs;
  
• locking in a portion of the customer's energy costs at ~ 8¢/kWh (the solar energy rate) as compared to Lakeland's current electric rate of ~ 13¢/kWh; that is, a portion of their energy costs are exempt from fuel charge increases;
  
• reducing standby losses when the water heater is not in use (typically ~ 15% of the energy consumption of a conventional hot water heater), thereby further reducing energy costs;
  
• reducing the environmental impact of energy usage; and
  
• providing for hot water during power outages.

The program benefits the utility by:

• reducing electricity demand by approximately 0.4 kW on the summer system peak and by 0.7 kW on the winter system peak;
  
• decreasing transmission and distribution losses because the solar energy is generated at the point of use;
  
• creating a positive return on investment of about ~ 10% on an annual basis;
  
• diversifying its resource base;
  
• reducing environmental impact from its operations;
  
• improving public relations by offering a renewable energy program; and
  
• selling the renewable energy credits* generated by the solar water heating systems.

There are currently about 60 residential participants in the program. Lakeland Electric maintains a waiting list for future subscribers to the program. Plans call for the resumption of solar hot water installations in 2008.

Click here for a 2002 case study on the Lakeland program.

*Lakeland Electric retains ownership of the "green tags", or renewable energy certificates (RECs) associated with the solar thermal energy produced by the systems. In 2004, Lakeland Electric became the first utility to sell RECs derived from solar water heating systems through an arrangement with Sterling Planet, national green tag marketer.

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