“The NY-Sun Initiative coupled with our determination to modernize the utility industry moves New York to a market-based, decentralized approach in advancing energy policy,” said Richard Kauffman, chairman of energy and finance for New York. “By developing innovative market solutions, Governor Cuomo is transforming our energy industry into a more resilient, healthy, affordable, and dynamic system.”

To accompany the NY-Sun initiative, the Public Service Commission (PSC) also approved an order to change the New York State Energy Research and Development Authority’s (NYSERDA’s) current incentive-based solar programs by creating a long-term roadmap to transition from government-sponsored energy programs to market-based sustainable solutions for the solar industry.

“The commission recognizes the substantial opportunities that solar power offers residential and commercial customers to reduce electricity bills and improve the environment,” said PSC Chair Audrey Zibelman. “I applaud Governor Cuomo for his tremendous vision and support to strengthen the development of our solar energy resources and our solar energy industry. NY-Sun is a key building block in the state’s efforts to build a vibrant, clean energy economy in New York state.”

To drive market penetration, the PSC order provides long-term, stable funding over a 10-year period to support solar photovoltaic (PV) projects throughout the state. In doing so, the PSC approved a transition to a “Megawatt Block incentive structure” that allocates MWs to specific regions of the state; breaks those regional MW targets into blocks to which incentives are assigned; and awards incentives based upon the block in effect at the time. This new structure will provide allocations on a regional basis in three categories: residential PV projects up to 25 kilowatts (kW); nonresidential PV projects up to 200 kW; and systems greater than 200 kW. The allocations will be based on historic demand, market potential, installed cost per watt, and equity.

The key to the MW Block model is to enable the market to grow at its own pace, enabling a self-sustaining industry in the long run. As the blocks are filled, incentives will decline at the rate the market will bear.

The state said the MW Block approach provides certainty and transparency regarding incentive levels to the industry, accounts for regional market differences, provides a clear signal to industry that New York intends to eliminate cash incentives in a reasonable timeframe, and allows for the elimination of those incentives sooner in regions where market conditions can support it, based on market penetration, demand, and payback.

The new funding commitment also provides $3.5 million for a consumer education effort on the benefits of PV systems; to improve the public’s understanding about the various PV contract types, such as direct ownership, leases, and power purchase agreements; and other opportunities, such as community solar and energy storage.

For more information on the NY-Sun initiative, visit http://ny-sun.ny.gov/.

Publication date: 5/19/2014

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