As New York agencies ramp solar incentives for underserved communities, critical legislation awaits Governor’s signature

Edison Energy’s Visionary Voices: Perspectives in Energy Series features conversations with leading experts from across the industry. These thought leaders are driving innovation in energy markets and available solutions for commercial, industrial and institutional energy buyers. Their diverse perspectives and experience offer a real-time view into the transformation happening in the market today.

Shyam Mehta joined NYSEIA after almost a decade as a market research manager and analyst at Greentech Media (GTM), an integrated research, media, and events firm covering the global renewable energy industry that was acquired by Wood Mackenzie in 2016. As an industry expert covering global solar markets, he led and managed GTM’s efforts in tracking, forecasting and analyzing solar PV and battery storage industry trends and metrics, regulatory developments, policy incentives and technologies across a range of products and services to a client base including GE, Con Edison, NYSERDA and NREL. Read the first part of our conversation with Shyam.

In this second of a two-part series, Edison Energy sat down with Shyam Mehta, Executive Director of the New York Solar Energy Industries Association (NYSEIA), to discuss New York’s push to expand community solar access to disadvantaged communities.

In June, the New York State Legislature passed cross-utility crediting legislation, which allows customers in any utility territory to join a community solar project located anywhere in the state. The bill aims to increase access to community distributed generation projects, particularly for the city’s underserved communities.

Under current rules, community solar subscribers can only enroll in projects that are located in their utility service territory. This has proved to be one of the primary barriers to community solar, with a critical discrepancy between penetration in Upstate and Western New York territories versus Long Island and New York City, where most of the state’s population—and specifically most of its low-to middle-income (LMI) population–is based.

The majority of both operational and pipeline community solar project capacity in New York is concentrated in Upstate and Western New York, which constituted 78 percent and 90 percent of operational and pipeline capacity, respectively, at the end of 2020.

In contrast, the equivalent figures in Downstate territories stood at four percent and five percent, respectively. This is primarily due to the lack of siting potential for ground-mounted projects in the downstate region.

“There is very little siting potential,” Mehta said. “There is little to none on the ground and even roof space is significantly constrained for multiple reasons. Unless you actually allow New York City residents to subscribe to community solar projects outside of Con Ed territory, you will never come close to providing community solar for any meaningful fraction of New York City residents. If there was an easier way, we wouldn’t be talking about cross-utility crediting.”

While NYSEIA continues to advocate for the bill, uncertainty around the state’s community solar future remains until the legislation is signed by Gov. Kathy Hochul.

“The hang-up there is that the PSC and the DEP are opposed because they are concerned about the complexity and cost of implementing the kind of backend IT systems necessary to actually implement cross-utility crediting,” Mehta said. “New York needs to get the different IT systems to talk to each other to transfer credits from one territory to another. That is why Gov. Cuomo did not sign it, and that is where we still stand as of today. We’ve been in meetings with the Governor’s office to continue to lobby for the passage of the bill. Yes, it will not be a trivial task to implement the IT systems, but that is not a good enough reason not to do this.”

Expanding solar access

The state has been ramping up efforts to expand solar access for disadvantaged communities, most recently with the launch of the Inclusive Community Solar Adder (ICSA) program, which allocates $52.5 million for community solar projects that support underserved neighborhoods.

The incentive program, administered by NYSERDA, provides an additional incentive for NY-Sun community solar projects that dedicate at least 20 percent of their project to eligible low-to-moderate (LMI) income households. Bonus incentives will also be awarded for projects sited in environmental justice communities burdened by conventional power generating facilities.

In a recent update, NYSERDA reported that the NY-Sun program had an oversubscription of the ICSA for Upstate Community Distributed Generation (CDG) projects that received the Community Adder, as well as Upstate CDG projects with no Phase One Net Energy Metering (NEM), Market Transition Credit (MTC), Community Credit (CC), or Community Adder.

“There is definitely a big effort underway by NYSERDA to improve community solar’s penetration amongst disadvantaged communities at large, and LMI communities and individuals specifically,” Mehta said. “I think that one of the worst kept secrets of community solar in New York is that for all its success, it has made precious little headway in terms of low-income subscription offtake, as well as with communities affected by environmental justice issues.”

Earlier this year, NYSERDA and National Grid filed a joint petition to streamline customer eligibility and enrollment for the proposed Expanded Solar for All. The solar program would also connect customers from National Grid’s existing Energy Assistance Program directly to community solar projects in its service territory.

“There’s been quite a lot of interest, discussion and debate, because on one hand you can argue that this is a natural extension of what utilities do to serve low-income customers,” Mehta said. “They have energy affordability programs, they have data on low-income customers, and if we’re talking about lowering the costs of customer acquisition of community solar, this seems to be an obvious way to do that because the utilities already have access to low-income customers. This could shave off a significant chunk of total acquisition costs. You can see the justification both in terms of efficiency and lowering costs and this being a natural extension of utility services for low-income customers and filling a void that so far the private sector has not fulfilled.”

But there are concerns that this will create an unbalanced playing field between utilities and the private sector. Companies currently involved in the customer acquisition and management aspects of community solar have expressed concern that the scenario will constrain the market, ultimately driving out private sector participation.

“We are cautiously accepting of this program,” Mehta said. “We’ve basically said, ‘Proceed, but with a high degree of caution.’ At the very least, there should be some kind of cap on the program to make sure that it doesn’t end up constraining the private sector.”

Several New York towns have aggressively opposed the solar program, arguing that it presents a threat to Community Choice Aggregation opportunities.

“There’s been a battle going on in terms of this particular program and discussion about what the best option is to accelerate community solar for disadvantaged communities,” Mehta said. “This has been a really transitional year for community solar in New York. In the next six months, these matters will have to be ruled on by the Commission, so we may be in a very different place next year when it comes to community solar in New York. I hope we end up landing in the right place.”

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