NYSERDA will reinvest 36% of the surplus ($150 million) back into the NY-Sun program on the condition that the funds be used for solar projects that directly benefit low-income customers.
New York’s goal for 10 GW to build out distributed solar projects by 2030 is not only expected to be achieved ahead of schedule, but also under budget. Distributed solar projects are typically installed on rooftops, carports or other built-environment locations for homes and businesses.
Through NY-Sun, the New York State Energy Research and Development Authority (NYSERDA) provides financial incentives for the installation of approved, grid-connected solar installations. Part of New York State’s climate agenda directs a minimum of 35% of the benefits to disadvantaged communities.
PSC’s order estimated that the $150 million allocated to New York’s Solar for All program will support the deployment of about 500 MW of additional solar capacity beyond the 10 GW goal. It estimated that New York will be able to achieve its 10 GW goal with an approximately $421 million surplus out of the original total budget of $3.27 billion.
The PSC authorized NYSERDA to reinvest 36% of the surplus ($150 million) back into the NY-Sun program on the condition that the funds be used for solar projects that directly benefit low-income customers. The PSC directed the remaining surplus to be reallocated to other statewide clean energy fund balances, which it said are to be used to reduce future collections related to other pending clean energy programs.
The program was re-launched in 2014 with a goal of supporting 3.17 GW of installed capacity by 2023, which was expanded in 2020 to 6 GW of installed capacity by 2025. Ultimately, New York adjusted its goal for distributed generation projects in 2021 from 6 GW by 2025 to 10 GW by 2030.
In assessing how the estimated NY-Sun budget surplus could be used, NYSERDA noted that when the goal was expanded to 6 GW by 2025, it had a budget of $573 million, which, according to court documents by PSC, was “not fully funded through incremental ratepayer collections, but instead relied on the use of uncommitted funds from legacy NYSERDA portfolios, which are no longer active.”
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New York Solar Energy Industries Association (NYSEIA) wanted to reinvest the surplus funds to continue bolstering rooftop solar on homes, businesses, schools and affordable housing, and for opt-in community solar and remote crediting projects that serve large energy consumers. NYSEIA noted that the funding awarded to New York’s Solar for All was intended to support distributed solar projects benefitting low-income and disadvantaged communities, which, according to NYSEIA, could support an estimated 240 GW of distributed solar.
NYSERDA will be administering these funds for New York State, NYSEIA said, “although much of the funding will be re-granted to housing agencies and the City of New York and programmatic details are not yet known.”
(Read: New York adds $52.5 million in community solar incentives for low-income residents)
NYSEIA said the primary rational the PSC gave for reallocating the funds toward other programs “was affordability, although it is not clear what specific programs the funds will support,” NYSEIA said in a statement. “It is also deeply concerning that the Commission is failing to connect the dots between the utility bill savings that solar provides to New York families and businesses and the Governor’s affordability agenda.”
Commission Chair Rory M. Christian said the changes will enable them to expand their capacity to other policy matters, including, critically, energy affordability. The changes, he said, “will provide continuity for this very important program during this incentive phase-out period.” The PSC said it will continue to support distributed solar industry through the value stack compensation mechanism and the Statewide Solar for All program, in addition to the up-front incentives provided by NY-Sun.
“This is not an end of incentives,” Christian said after the meeting, as Politico reported, “This is an adjustment reflecting where we are in respect to our goals. What we do next will be determined based on where things go, and the commission will remain flexible in our approach to ensure we achieve our goals.”
NYSEIA, which was “deeply disappointed” by the decision, said it is carefully considering how to respond.
“We do not want to antagonize the Governor’s Office and the Commission if we can avoid it,”NYSEIA said. “At the same time, the lack of state-level support for solar at a time we face unprecedented [sic] federal threats is alarming and we can’t let it stand unchallenged,” it said.
More than anything, NYSEIA said, the PSC decision “highlights the urgent need for the New York legislature to step up and advance pro solar policies this session.”
With the changes, the NY-Sun program includes a total investment of $3 billion in ratepayer-funded incentives that have supported the successful program over the last ten years, according to the PSC. “The public investment is expected to spur approximately $4.4 billion in private investment to bring awarded projects to fruition, for a total of $5.9 billion in expected investment over the mid- to late-2020s,” it said.
NYSEIA also said it is redoubling its legislative efforts, including a final push to increase the maximum state income tax credit for residential solar installations, and make energy storage and more people eligible for the tax credit. NYSEIA, nonprofits and other interest groups have been in overtime, making the final negotiations with New York Gov. Hochul and state lawmakers to get the tax credits into the state’s budget.
According to the PSC, NY-Sun has led to an additional 6,000 jobs in New York, including with the state’s first application of prevailing wage requirements for solar projects between one and five MW.
