NYPSC Passes Stop-Gap Measure for Community Solar as Customer Demand Outpaces Regulatory Process

January 18th, 2018

Joint Release by CCSA, SEIA and Vote Solar:

 

NYPSC Passes Stop-Gap Measure for Community Solar as Customer Demand Outpaces Regulatory Process.

Washington, D.C. (January 18, 2018) – Today the New York Public Service Commission (NYPSC) passed a stop-gap measure to enable continued community solar development in three utility service territories in the face of high customer demand. The decision provides short term clarity to the market which will provide consumers and businesses continued access to community solar and maintain the momentum of new projects being built in New York.

Community solar providers estimate today’s decision provides another month to several months of development opportunity for community solar projects, and will bring community solar to approximately 2,000 additional customers in the Orange & Rockland utility territory, and 2,600 additional customers in Central Hudson Gas & Electric territory.  Today’s decision also directs Commission staff to develop an interim approach to compensating community solar customers until the new Phase Two Value of Distributed Energy Resources (VDER) tariff is established in early 2019.

“We appreciate NYPSC addressing near term uncertainty in the market by passing this stop-gap measure, and we urge the Commission to move quickly in establishing a more permanent solution until the new system [VDER Phase Two] is set,” said Brandon Smithwood, Policy Director for the Coalition for Community Solar Access. “We also appreciate and agree with the Commission’s recognition that the Market Transition Credit is an important tool for compensating customers for their investment in community solar projects and the many benefits these projects provide.”

The NYPSC is transitioning away from net metering and replacing it with a VDER tariff, which is intended to better reflect the time- and location- based value of distributed energy resources, such as solar. In order to encourage expanded consumer access through community solar while the Commission works to finalize VDER, it developed a “Market Transition Credit” which is intended as a proxy to compensate customers for values associated with local clean energy generation that have not yet been precisely quantified by the PSC. The MTC has been a success in that it has enabled over 300MW of community solar projects to move toward construction across the state, making community solar available to over 40,000 customers. Notably, neither the solar industry nor the utilities favored using an auction mechanism to address the unquantified values that community solar provides; a joint filing by the Solar Progress Partnership suggested that the MTC was a simpler approach that would maintain market stability.

“As the Commission works to develop another interim solution until the Phase Two VDER tariff is officially set, it will be important to ensure policies are simple and straightforward for consumers and solar providers to do business in New York,” said Smithwood. “That means maintaining a set MTC level and ensuring continued development opportunities so the market does not face a cliff and New Yorkers do not lose the opportunity to participate in community solar.”

Earlier this week the national Solar Energy Industries Association released a white paper which outlined principles for how locational values, like those being developed in New York, should be used to compensate distributed energy resources [https://www.seia.org/sites/default/files/2018-01/SEIA-GridMod-Series-4_2018-Jan-Final_0.pdf]. The paper emphasizes that any tariff, like VDER, must include the full set of values that distributed energy resources, like community solar, provide and that customers must be compensated for this credit in a way that supports viable projects. The Commission recognized that it is working towards this end in its Order, noting that “completely eliminating the MTC, at this time, and compensating new projects based on the Value Stack alone, would be unreasonable given that the MTC was partially intended to compensate for the incompleteness of Value Stack. Moreover, this would result in levels of compensation expected to be too low to maintain momentum in the market.”

“New York is making a transition toward a new way of compensating distributed energy resources,” said Dave Gahl, Director of State Affairs, Northeast, for the Solar Energy Industries Association. “The solar market, including community solar, needs a stable transition in order to continue to grow. With the Commission creating a stop-gap for community solar today, we will keep working to ensure a fair, long-term tariff is established that is in line with our newly released principles.”

“Community solar is critical to giving everyone access to the savings, local investment and jobs, and environmental benefits of solar. This Public Service Commission order provides much needed stability in the near term for community solar customers and developers, at a time when a lot of clean energy regulation and policy in New York is in flux,” said Sean Garren, Northeast Senior Director for Vote Solar. “The Public Service Commission must now look to provide long term policy certainty, so that solar customers and developers can continue to invest in clean and local solar.”

 

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About CCSA: Founded in February 2016, CCSA is a business-led trade organization that works to expand access to clean, local, affordable energy nationwide through community solar. Community solar refers to local solar facilities shared by individual community members, who receive credits on their electricity bills for their portion of the power produced. Community solar projects provide American homeowners, renters and businesses access to the benefits of solar energy generation unconstrained by the physical attributes of their home or business, like roof space, shading, or whether or not they own their residence or building. These programs can also expand access to solar energy to low-income households. For more information, visit the website at www.communitysolaraccess.org, follow the Coalition on Twitter at @solaraccess and like the Coalition on Facebook at www.facebook.com/communitysolaraccess.

About SEIA®: Celebrating its 44th anniversary in 2018, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry, which now employs more than 260,000 Americans. Through advocacy and education, SEIA® is building a strong solar industry to power America.  SEIA works with its 1,000 member companies to build jobs and diversity, champion the use of cost-competitive solar in America, remove market barriers and educate the public on the benefits of solar energy. Visit SEIA online at www.seia.org.

About Vote Solar: Since 2002, Vote Solar has been working to lower solar costs and expand solar access. A 501(c)3 non-profit organization, Vote Solar advocates for state policies and programs needed to repower our electric grid with clean energy. Learn more at www.votesolar.org.