Currently, solar energy makes up less than 1 percent of the power produced in New York, but Gov. Andrew Cuomo wants that to change.
In April Cuomo announced that his administration would be putting $1 billion into the NY-Sun Initiative, an effort to expand solar power throughout the state and refine existing programs that deal with the renewable method of energy generation.
The plan creates a timeline of declining incentives—the Megawatt Block Program—which is designed to lower the upfront cost of photovoltaic systems (PV), so that the state can eliminate solar subsidies in the long-term. It also decentralizes the program, establishing distinct regions with the goal of allowing certain areas to better adapt to the local economy, landscape and existing solar industry.
In 2013 the Public Service Commission (PSC) invited the New York State Energy Research and Development Authority (NYSERDA) to submit a petition recommending ways to strengthen the state’s renewable energy program, which supports solar projects. As an outgrowth of those recommendations, the NY-Sun program will distribute $1 billion through 2023, including $851 million in planned incentives, $13 million for increasing the participation of low-income households, $3.5 million in consumer education, and some funding for quality assurance programs.
Despite the large investment, some advocates for solar power say the program is still relatively modest, predicting that it will account for only 10 percent of the state’s energy production by 2023.
Currently there are roughly 400 companies involved in the solar industry in New York, and about 5,000 jobs associated with them. There have been over 300 megawatts of solar power installed the last few years. If everything goes according to plan with NY-Sun, 3,000 megawatts of PV will be installed over the next 10 years. NYSERDA would not provide its own projections for the percentage of the state’s energy it expects solar power to yield at the end of the 10-year time frame covered by the NY-Sun plan.
In addition to the billion dollar investment, the state is taking steps to educate local officials involved in solar planning, create more workforce development initiatives to train PV installers and designers, and instruct first responders how to deal with PV systems if there is a fire.
The incentives program, which will be administered by NYSERDA will be divided into three geographical regions: Long Island, where PSEG will help manage it locally; New York City and southern Westchester County; and the rest of the state. Officials say the regions behave very differently when it comes to solar energy and PV installation. For example, Long Island’s incentives are currently—and will continue to be—lower than those in Con Ed territory and the rest of the state, because Long Island has already demonstrated a higher demand for solar power.
Conor Bambrick, air and energy director for Environmental Advocates of New York, approves of the division. “[T]hat will accurately reflect a number of other factors that come into the price of solar …. Downstate you have to deal with high real estate costs, high labor costs … and high electricity costs, as well … versus upstate New York, where the electricity costs are lower.”
The actual incentives that will be made available to each region have not been finalized, but the categories have. Tax breaks will be given to residential PV projects up to 25 kilowatts (kW), small-scale nonresidential PV projects up to 200kW and large-scale nonresidential projects larger than 200kW.
The state is betting that the Megawatt Block Program will build the market for solar, and eventually eliminate financial incentives for solar projects. Each “block” will have different wattage goals, which will be slowly filled up as more and more PV systems are installed. (A typical home usually uses a 3–7kW system.)
Once the goal of the first block is completed, the state will move on to filling up the second block, which will have a lower incentive level for solar customers. In other words, the first PV customers will get the largest incentives, and the latecomers will get the smallest. NYSERDA is still in the process of laying out those blocks and incentive levels, with the goal of eventually eliminating the need for incentives altogether.
For residential projects, incentives will be fixed, meaning that all units in a residential block would receive the same incentive amount until that block is completely used up. For nonresidential PV projects up to 200kW, however, incentives may decrease within the same block for systems larger than 50kW. The incentive design for nonresidential systems larger than 200kW has not yet been determined. Residential and small-scale megawatt blocks will be available starting later this summer, and the megawatt blocks for above–200kW systems will be available in 2015.
NYSERDA expects financial incentives will phase out statewide by 2023, with different regions becoming incentive-free at different times, depending on how quickly their megawatt blocks are completed. The progress of the program will be tracked on a website so that the industry and the public can see when a block is close to being filled.
“It’s a 10-year plan that’s going to give the solar industry the assurance that New York is committed to investing in solar,” said Bambrick, “and that allows them to make long-term business decisions.”
But will it work?
New York has consciously looked toward the California Solar Initiative as a template for the Megawatt Block Program, which has already experienced some level of success. As California’s solar market grew, and installation costs decreased, incentive levels dropped from $2.50 per watt to $0.20 as of June 2013.
NYSERDA is also working on a project with the City University of New York to get communities across the state to adopt a standardized permitting process for solar. Such a process would make the industry easier to navigate for installers, and enable them to spend less time on paperwork. There are currently about 60 different communities using the standardized permitting process and application.
Solar advocates are generally happy with the program, and everyone interviewed for this article said that NYSERDA had labored in good faith for years to build consensus around the program.
“Our industry has been working on something like this for 10-plus years,” said Shaun Chapman, president of the New York Solar Energy Industries Association. “And in one stroke of the pen, the governor has taken leadership …. It’s very clear he wants to lead on this, and were really excited about it.