The following article, written by Thomas Polich, appeared Tuesday, May 6, 2014 on the Solar Industry Magazine website. Read below, or view the contents on solarindustrymag.com
A confluence of factors make the Empire State one of the best new solar growth markets in the U.S. Lucrative incentive programs, along with recent legislative, regulatory and economic changes; sound citizen and political support; and good market fundamentals make solar energy in New York both a near-term opportunity and a long growth industry with a sustained future.
Significant changes, including on-bill financing, remote net metering, fractional ownership, block grant installation incentives, private-public financing and green jobs incentives suggest strong economic viability for solar projects for companies and investors.
This year, Gov. Andrew M. Cuomo authorized $1 billion in funding for the NY-Sun Initiative through 2023 to provide longer program certainty to photovoltaic system developers, attract significant private investment in PV systems, enable the sustainable development of a robust PV industry in New York, create skilled jobs, improve the reliability of the electric grid and reduce air pollution.
In furtherance of the NY-Sun Initiative, the New York State Energy Research and Development Authority (NYSERDA) requested that the Public Service Commission (PSC) issue an Order identifying the source of funding for the renewable portfolio standard (RPS), customer-sited tier (CST) Standard Offer PV and Competitive PV programs, by granting NYSERDA the flexibility to reorganize the NY-Sun Initiative into a cohesive program framework across sectors and system sizes, and employ a transparent regional MW block approach to contribute to a more robust, efficient, coordinated and successful program.
Specifically, NYSERDA’s order seeks to do the following:
- Identify the source of funding for the NY-Sun 2014-2015 program years;
- Allow NYSERDA the flexibility to establish, and periodically adjust, the allocation of funds between the Standard Offer PV and Competitive PV programs;
- Allow NYSERDA the flexibility to lower the Standard Offer PV incentive level on a regional basis in response to achieving a designated threshold amount of MW under contract – the MW Block program;
- Eliminate the “40% of installed cost rule” for the Standard Offer PV program; and
- Allow NYSERDA the flexibility to transition the Competitive PV program to a MW Block performance-based incentive program.
NYSERDA also asked the PSC to consider whether there would be greater efficiencies and success if a better-coordinated statewide PV incentive program, including Long Island, were implemented.
The Standard Offer PV incentive program, as authorized by the PSC, currently provides for incentives for systems installed on residential or non-residential properties based on two tiers, 50 kW system size, and a Second Tier with a lower incentive for capacity greater than 50 kW up to 200 kW.
The incentives are the same throughout the state for eligible customers, and NYSERDA may adjust the incentive level every two months to allow a reasonable period for installers and customers to enter into contractual agreements. If applications in the prior two months exceed available funds, NYSERDA reduces the incentive level for the subsequent two months; and if applications in the prior two months did not fully use the available funds, NYSERDA may increase the incentive for the subsequent two months.
Through this program, the solar installations have increased each year, and demand continues to grow, with systems greater than 50 kW up to 200 kW now eligible for incentives. However, the current triggers and process for lowering incentives are not predictable or transparent enough to provide installers with confidence that the contracts they are negotiating with their customers will reference the correct incentive.
Regional MW block
NYSERDA is transitioning to MW Block programs for both the Standard Offer PV program and the Competitive PV program by establishing a “declining MW block” program. Based on California’s program, the New York block grant program will result in steady, measured and predictable incentive level reductions.
NYSERDA has proposed a MW block approach on a regional basis, potentially providing different incentive levels and different MW blocks in different regions.
NYSERDA will implement the MW Block program in the context of monthly budgets according to the current practice to avoid having to prematurely terminate the program if demand substantially exceeds available funds through 2015. As a result, incentives will change regionally and across systems size and configuration. NYSERDA believes that through this mechanism, RPS incentives can steadily be reduced, and likely eliminated by 2020 – sooner in some regions of the state.