Enhanced credits & greater certainty to encourage development of renewable energy projects, reduce cost, hasten progress to meet state’s clean energy & carbon goals to combat climate change
By the New York State Public Service Commission
The New York State Public Service Commission acted Friday to improve the overall value, predictability and certainty for community solar project development. Specifically, the improvements to the PSC’s nationally recognized renewable energy policy known as the value of distributed energy resources (VDER) will create the potential for more than 1,000 megawatts of additional community-distributed generation (CDG) projects beyond the 500 MW of projects already in the pipeline. By accurately compensating distributed energy to maximize grid benefit and reduce costs for distributed energy providers and consumers, this policy will advance the state’s renewable energy industry, including the bourgeoning CDG market.
VDER compensates owners of solar and other distributed and renewable energy projects for the values they provide to society and the grid, including carbon-free power, thereby reducing cost shifting while still providing good returns to solar and other renewable projects.
“Distributed clean energy resources are critical to building an energy system that will provide 70 percent clean and renewable energy in New York by 2030, as put forward by Gov. Cuomo’s ‘Green New Deal,’ ” PSC Chairman John B. Rhodes said. “Smarter, clearer compensation for these projects will assure that these markets are developed in a robust, cost-effective and sustainable way. In anticipation of Earth Day, today’s order recognizes the necessity to refine and advance compensation for distributed energy to encourage investment in New York’s clean energy economy.”
VDER is an innovative successor policy to net metering and was implemented because net metering was a blunt compensation method that did not encourage projects to maximize grid benefits and, over time, will cause unfair impacts on ratepayers. Instead, under this new structure, VDER manages the potential costs of each solar project to the state and to utility customers maximizing the overall opportunity for distributed solar in New York state without imposing unreasonable costs on nonparticipating ratepayers.
In December, Department of Public Service staff issued two white papers that were the result of vigorous public input and stakeholder engagement. Today’s order reflects feedback received on these white papers from active parties to the VDER proceeding and other stakeholders.
Specifically, the order implements several recommendations, which will serve as important next steps in the evolution of the state’s VDER policy. The order:
•Establishes expanded opportunities for electric customers to benefit from CDG projects in their utility territories;
•Provides for alternative incentive mechanisms for community solar in the Central Hudson Gas & Electric and Orange and Rockland utility regions, where CDG development has already been robust;
•Improves the process for calculating and compensating for the distribution value of clean and renewable generation through more predictability and financeability; and
•Expands net energy metering to systems up to 750 kW in size in cases where onsite energy generation is primarily used to satisfy a customer’s demand. Because the rate designs are applicable only to these customers, expanding net metering to them will not shift significant costs to other customers.
The order will provide additional opportunity for customers to participate in CDG projects within utility territories where previously authorized MTCs have been fully subscribed. This includes Orange & Rockland and Central Hudson, where more than 190 MW of CDG are already in service or in advanced stages of development. Existing funds will be used to provide upfront incentives to about 100 MW of new projects split between Orange & Rockland and Central Hudson, to nurture continued market growth while managing overall costs.
Additionally, new projects outside of O&R and Central Hudson receive “community credits in place of an MTC.” These new credits are enhanced and standardized to both provide a greater opportunity for clean energy projects to lower financing costs and enable additional electric customers in upstate utility territories to meet their energy needs by participating in a CDG project. These community credits will be available to more than 700 MW of new projects, thereby creating robust CDG opportunity for New Yorkers across the state. Furthermore, 400 MW of community credits will be available in Con Edison for new CDG projects.
The installation of distributed energy resources in New York has already resulted in lower carbon emissions, economic activity, ratepayer savings, and increased grid resiliency. Currently, there are nearly 4,200 solar projects in development across New York contributing to New York’s statewide solar growth of nearly 1,500 percent since 2011. This includes about 880 MW DC of CDG in the pipeline, more community solar than was installed in all states in 2018. 2018 was New York’s most successful year ever for PV deployment in New York, with over 281 MW of state-supported solar installed. The VDER revisions approved today will help stimulate an additional 1,000 MW of new CDG, thereby helping to fulfill the intent of this policy to expand access to clean energy for all New Yorkers.
Today’s decision may be obtained by going to the PSC documents section of the commission’s website at www.dps.ny.gov and entering case number 15-E-0751 in the input box labeled "Search for Case/Matter Number.” PSC documents may also be obtained from the commission’s files office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500).
To learn more about the “Green New Deal” and “Reforming the Energy Vision,” visit rev.ny.gov.