Despite a long stakeholder process and initial support for the state’s Value of Distributed Energy Resources (VDER) proceeding, solar advocacy groups have raised some concerns about the New York Public Service Commission’s (PSC) recent approval of utility implementation plans. As the groups explain, these critical plans set the compensation for solar customers in each utility service territory and established a successor program to net energy metering (NEM) in New York.
In a press release, the PSC says that although NEM has served as an instrumental component of the emergence of renewable and distributed energy systems over the past decade, the new VDER mechanism will be more accurate in determining the values that these systems bring to the grid and society – including, for the first time, locational and environmental benefits.
“Expanding access to cost-effective, clean energy is a primary goal of New York’s clean energy standard, which will create enough renewable energy to meet half of the state’s electricity needs by 2030,” says PSC Chair John Rhodes in the release. “The new compensation mechanism will spur the development of solar power, energy storage and other localized forms of electric generation.”
The PSC notes that the Thursday order is the result of a year-long collaboration with more than 20 meetings and dozens of exhibits filed between state agencies, environmental advocates, utility representatives, consumer advocates and the providers of solar and other forms of DER technology. It establishes the first phase of a multiyear effort to create a more market-driven approach to optimizing the use of clean, distributed energy systems. Over the coming months, these same parties will participate in a second phase to further refine the values that DER provide to the energy system.
To ensure a smooth transition to the new value-based compensation model, solar and other distributed energy systems installed before March 9, 2017, will continue to remain on NEM compensations and receive the NEM credits that they have received in the past for the life of their system, according to the PSC. Homeowners and small commercial customers that install solar or other small, distributed systems between March 9, 2017, and January 1, 2020, will be compensated through NEM for a period of 20 years. All other systems installed after March 9 will be placed onto the new VDER compensation system after the utilities file final calculations and tariffs, which will take effect Nov. 1.
In Thursday’s order, the PSC adds, the commission also took the next steps toward expanding the size of solar projects (from a maximum of 2 MW to 5 MW) in order to help lower development costs and increase the competitiveness of the emerging community solar market. Following the further analysis by utilities, stakeholders and Department of Public Service Staff, the commission anticipates considering final action early next year.
Nonetheless, the Solar Energy Industries Association (SEIA), the New York Solar Energy Industries Association (NYSEIA) and the Coalition for Community Solar Access (CCSA) have issued the following joint statement:
“Although the industry supports the commission’s goal to properly quantify the full value of clean energy, the recently approved utility implementation plans use incomplete and inadequately refined methodologies that fail to accurately calculate the economic and environmental benefits of solar.
“New York has ambitious goals for deployment of clean, distributed energy, and those goals cannot be met without a stable regulatory environment. We are concerned about the signal this sends to clean energy businesses evaluating investment decisions throughout the region, and the impact on the nascent community solar industry.
“During the case, the solar industry explained the flaws in the utility VDER implementation plans and proposed several alternatives for compensating solar customers for the values their projects provide. While we recognize these initial implementation plans are a first step toward more precise valuation, we are discouraged that the commission approved the assumptions behind the utilities’ plans.
“Our organizations remain committed to ensuring that the VDER framework captures all the value that solar provides to customers and the grid. As the second phase of the VDER case begins, the solar industry seeks a more robust, deliberative process that will allow for a thorough examination of utility data, consideration of independent analysis by outside experts, and sufficient opportunity for discovery and debate over the complex questions involved in this case.”
In a separate statement, Sean Garren, Vote Solar’s senior director of the Northeast, says, the PSC’s Thursday ruling “largely approved a set of utility proposals that undervalue solar, storage, and other clean energy technologies, after these proposals faced fierce criticism from solar and clean energy industry, environmental advocates and other stakeholders.”
Garren continues, “The quick approval of controversial utility proposals with little time for critical examination from other stakeholders could become a pattern as the [Reforming the Energy Vision (REV)] process continues. As the second phase of the VDER process unfolds, concerns have been raised about the process for thorough review of proposals and developments. We remain committed to working with the PSC and Governor Cuomo to deliver on their bright vision for the future, but we need a level playing field with the utilities.”
The full PSC order is available here.