New York State could build on its strong community solar track record and expand solar access to hundreds of thousands more New Yorkers by lowering regulatory barriers and improving compensation for distributed solar generation, according to a new report by the New York Solar Energy Industries Association (NYSEIA).
The NYSEIA report, “Realizing the Potential for Community Solar in New York State: Benefits, Barriers, and Solutions,” documents impressive growth in New York community solar since its inception in 2015 and provides policymakers with detailed recommendations for expanding this market segment, which is key to reaching low- and moderate-income customers and meeting the state’s climate change goals.
“Community solar has the potential to dramatically expand affordable clean energy access for millions of New Yorkers, and its rapid growth across the state over the last five years is testament to its benefits as well as the vision and support provided by the Public Service Commission and NYSERDA,” said Shyam Mehta, executive director of NYSEIA. “It is critical that regulatory, legislative and programmatic policymakers take note of the barriers identified in this report and the recommendations advanced to overcome them in order to ensure the continued success of community solar in New York going forward.”
The NYSEIA report underscores the success of community solar thus far in New York. As of December 2020, 371 community solar projects were operational in the state, comprising 497 MW of capacity. Nearly 90% of that capacity was installed in 2019 and 2020, reflecting the successful launch and scaling up of the industry. Roughly 63% of all solar capacity installed in New York in 2020 was part of the community solar program, and at the national level New York was the largest state community solar market in terms of 2020 installations and second with regard to cumulative deployments.
Yet despite these benefits and successes, the NYSEIA research report underscores the barriers to future growth in this important market segment. Interconnection hosting capacity constraints, costs to upgrade the electric distribution system, utility interconnection delays, customer awareness and incentive pullbacks each pose significant challenges to community solar’s ability to bring the benefits of renewable energy to more New Yorkers. Community opposition to ground-mounted solar and inconsistent local property tax regimes further cloud the industry’s growth.
One of the largest barriers to community solar — which is particularly relevant for downstate and low-income customers — is the regulatory restriction that community solar projects must be located in the same utility territory as the subscriber. This has led to an extreme disparity in geographical access to community solar projects: Only 1% of Con Edison’s 3.4 million customers would be served by operational and planned projects, compared to 33% in National Grid and 17% in NYSEG-RGE.
The NYSEIA report provides detailed recommendations to address these barriers and unlock New York’s community solar growth, including:
Implementation of cross-utility crediting to enable transfer of bill credits across utility lines to expand solar access to more than 500,000 New York City households, dramatically expand community solar penetration in LMI communities, accelerate the state’s ability to meet its climate goals under the CLCPA and stimulate development of almost four additional gigawatts of operating capacity.
Accelerated investment in distribution-level infrastructure that enables hosting capacity expansion for distributed energy resources;
Updating the Value of Distributed Energy Resource (VDER) tariff under which community solar projects are compensated, specifically the Environmental Value (E-Value) and Demand Reduction Value (DRV), and introducing an additional component to reflect the avoided long-run transmission infrastructure costs associated with deployment of distributed energy resources;
Replenishing the Con Edison Community Credit for allocations previously made to natural gas fuel cells, and introducing a successor Community Credit on a phase-down basis;
Implementing a multi-year extension for the Long Island Community Credit and Community Adder;
State-convened discussion forums in Upstate and Western New York to address local opposition to project siting and dedicated incentives for agricultural dual-use projects (agrivoltaics);
Programmatic initiatives to increase awareness of community solar benefits for local communities and address commonly held misconceptions surrounding environmental risks associated with solar energy;
State- and utility-sponsored marketing initiatives to improve customer awareness; and
The adoption of “no-touch” permitting practices for rooftop projects to reduce permitting timelines and soft costs.